97016: Trade Agreements: Renewing the Negotiating and Fast-Track Implementing Authority

Vladimir N. Pregelj
Economics Division
Congressional Research Service

Updated June 30, 1998

CONTENTS

SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS

Trade Agreement Negotiating Authority

Fast-Track Implementing Authority

Negotiation of Trade Agreements and Their Implementation under Fast-Track Procedure

Conditions for and Limitations on Fast-Track Implementation of Trade Agreements

Fast-Track Implementing Procedure

Past Use of Fast-Track Procedure

Other Options for Action

Legislative Action in the 105th Congress

LEGISLATION
CHRONOLOGY
CONGRESSIONAL HEARINGS, REPORTS AND DOCUMENTS

CRS Reports

FOR ADDITIONAL READING

SUMMARY

Legislation authorizing the negotiation and, where required, fast-track implementation of trade agreements expired in early 1994. Action in the 104th Congress to renew the authority, prompted in part by the near-term prospect of the negotiation of a free-trade agreement with Chile, which might later be followed by other agreements, reached an impasse in late 1995 because of a disagreement between Congress and the Administration as to the inclusion of labor and environmental issues in agreements approved by fast-track procedure.

The expired legislation authorized the President to enter into such agreements, and their enactment by fast-track procedure (no-amendment rule, deadlines for legislative steps, limits on debate, and mandatory executive notices to and consultation with Congress). Fast-track procedure helps to assure, on the one hand, that a trade agreement will be implemented without changes as negotiated and, on the other, that the Congress will be closely involved in its formulation.

In the past, fast-track procedure has been used to implement 3 free-trade agreements and 2 comprehensive trade agreement packages.

In the 105th Congress, measures have been introduced and reported in both Houses to authorize, under conditions generally similar to those of the expired authority, conclusion oftariff and nontariff agreements and the implementation of the latter by fast-track procedure, provided the legislation contains only provisions necessary for their implementation and directly related to trade. Further consideration of the legislation has been postponed at the President's request because of apparent lack of sufficient support.

Measures of narrower scope would authorize agreements specifically for Chile's accession to NAFTA and for the creation of a Western Hemisphere free-trade area; they would, however, permit their fast-track consideration only if their provisions are limited to those strictly necessary for the implementation of the agreement and excluding any provisions dealing with worker-rights and environmental issues.

On the other hand, a bill would require the inclusion of labor and environmental provisions in trade agreements.

A draft bill transmitted by the President, but not considered, would have continued to apply fast-track to "necessary or appropriate" provisions provided that are "directly related to trade."

An amendment was proposed to House rules to require a two-thirds vote on nonamendable measures for fast-track implementation of trade agreements.

MOST RECENT DEVELOPMENTS

In the 105th Congress, several bills have been introduced (and two of them reported favorably) to provide general authority for the conclusion and fast-track implementation of trade agreements, as well as narrower authority for trade agreements providing specifically for Chile's accession to the NAFTA and for the establishment of a Western Hemisphere free-trade area. The bills specifically exclude labor and environmental standards provisions from agreements to be implemented by fast-track On the other hand, one measure, limited only to the specific issue, would require the inclusion of such standards. Further consideration has been postponed at the President's request because of apparent lack of congressional support and, in the House, temporarily blocked by tabling the already reported rule recommending the consideration of the House measure.

A draft bill for the renewal of fast-track authority, containing the Administration's proposal, also has been transmitted to the Congress by the President, but not further acted upon.

An amendment was proposed to House rules to require a two-thirds vote on nonamendable bills and joint resolutions for fast-track implementation of trade agreements.

BACKGROUND AND ANALYSIS

Trade Agreement Negotiating Authority

In 1934, the Congress, which under the U.S. Constitution has the power "To lay and collect ... Duties" and "To regulate Commerce with foreign Nations," by law authorized the President, for a specified time period and within specified limits, "to enter into foreign trade agreements with foreign governments ... and to proclaim such modifications of existing duties and other import restrictions ... as are required or appropriate to carry out any [such] trade agreement." This authority was subsequently extended and reenacted several times with some basic changes.

In a major change, the Trade Act of 1974, in force as of January 3, 1975, gave to the President, in addition to the earlier tariff-concession authority, specific authority to enter into agreements to reduce nontariff barriers. In contrast with the tariff concessions, which could be implemented by presidential proclamation alone, reductions of nontariff barriers required implementation through the enactment of a bill (for the consideration of which a fast-track procedure was devised). Since the 1974 law, the scope of the trade agreement negotiating authority has been gradually expanded. This authority, which in its most recent version (Omnibus Trade and Competitiveness Act of 1988 (OTCA)) empowered the President to negotiate and enter into trade agreements to reduce or eliminate tariff and nontariff barriers and to establish free-trade areas, expired on April 1, 1993, but was extended through April 15, 1994, solely for the purpose of permitting the completion of the Uruguay Round.

(The Trade Act of 1974 also provided permanent authority for the negotiation of bilateral most-favored-nation agreements with nonmarket economy countries. These agreements, which are subject to a much simpler implementation procedure, are not dealt with in this issue brief.)

As pointed out by some legal experts, the President, by virtue of his constitutional power to conduct foreign affairs, does not need specific statutory authority to negotiate various trade agreements, but congressional action is required since many of their provisions can be implemented only by legislation (see next section).

Fast-Track Implementing Authority

Initially (in 1934) and for many following years, the President's statutory authority to enter into trade agreements applied only to agreements containing reciprocal tariff concessions, which then could be implemented under advance statutory authority by presidential proclamation without congressional involvement. Such implementation method has continued to apply to tariff-concession agreements. Beginning with the Trade Act of 1974, however, specific authority was provided also for the negotiation of agreements on nontariff barriers, which were expected to be for the first time the major subject of multilateral negotiations under the GATT auspices in their then forthcoming Tokyo Round. The authorizing statutes also required that the approval and implementation of such agreements take place through the enactment of implementing legislation and provided a special legislative procedure for it.

The enactment requirement, which has been retained in subsequent grants of the authority for nontariff agreements, reflects and affirms the constitutional role and legislative responsibility of the Congress in making trade policy. Agreements regarding nontariff barriers and/or the establishment of free-trade areas generally deal with matters that require implementation by legislation. In order, however, that the effectiveness of negotiations and a satisfactory conclusion of an agreement not be jeopardized by the possibility that its implementation might be overly delayed or denied, or that its provisions might have to be renegotiated because of amendments made to the implementing bill, a fast-track procedure has been established for the enactment of such bills. Over the years, the procedure has gradually grown in complexity.

The fast-track legislation functionally consists of two, complementary sets of provisions: (1) those establishing the expedited ("fast-track") legislative mechanism for the enactment of an implementing bill; and (2) those setting the conditions under which the fast-track procedure may be used to enact an implementing bill. Jointly, these provisions aim at insuring, on the one hand, that the achievements of the negotiations are not jeopardized by congressional procedures and, on the other hand, that the interests of the Congress in the matters contained in the agreements are safeguarded.

The statutory mechanics of the fast-track legislative procedure for the consideration and enactment of bills implementing nontariff trade agreements already entered into (signed) provide for mandatory introduction of a bill to implement the agreement and an expedited legislative schedule with deadlines for its several steps and for limits on debate. More importantly, they prohibit any amendments to the implementing bill (the bill must be either approved or disapproved in its entirety as introduced).

The rationale for fast-track legislative consideration of nontariff agreements as enacted by the Trade Act of 1974 was given in the Senate Finance Committee's report on what was initially titled the Trade Reform Act of 1974 (S.Rept. 93-1298, 93rd Congress, 2d session, p. 107) as follows:

"The Committee recognizes ... that such agreements negotiated by the Executive should be given an up-or-down vote by the Congress. Our negotiators cannot be expected to accomplish the negotiating goals ... if there are no reasonable assurances that the negotiated agreements would be voted up-or-down on their merits. Our trading partners have expressed an unwillingness to negotiate without some assurances that the Congress will consider the agreements within a definite time-frame."

By requiring expedited legislative action on the implementing bill within set deadlines for its various stages, by limiting debate, and by prohibiting any amendments, the procedure assures that, once the agreement is entered into by the Executive, the consideration of its implementing bill by the Congress would be carried through its completion without delay and without amendments. Thus, likely delays in its enactment or even its legislative demise for lack of action are avoided; more importantly, the bill (and the agreement) does not run the chance of being exposed to changes mandated by the Congress, which would frustrate agreements already entered into or, at the least, require their partial renegotiation.

The fast-track procedural provisions have no expiration date, but they are specifically defined as being an "exercise of the rulemaking power" of either House and, hence, subject to the constitutional right of either House to change its own rules with respect to its own procedure.

The authority for the negotiation of trade agreements and the use of the fast- track procedure for their legislative implementation is not part of the permanent rulemaking power of Congress but has had functional cut-off dates and has been renewed several times. Although by now expired, the most recent such provisions -- those of the OTCA, as amended -- however, have not been specifically repealed and are still on the books.

They contain several conditions and limiting provisions, all designed to assure congressional awareness of and participation in the negotiating process and formulation of the agreement, so as to safeguard the Congress' interests in the action. These provisions consist primarily of various requirements for presidential notification to and consultation with Congress before and during the course of various stages of the negotiations of the agreement. Failure to meet these requirements may result in the denial of the fast-track enactment procedure for the bill implementing the agreement involved, or may even prevent the agreement from being entered into.

Congressional participation in the negotiation process is enhanced by the statutory requirement that 10 Members of each Congress be designated at the beginning of each session of Congress as bipartisan "congressional advisers on trade policy and negotiations" and accredited as "official advisers to the United States delegations to ... negotiation sessions relating to trade agreements." Five members of the advisory body are selected from the House Ways and Means Committee and five from the Senate Finance Committee (in either case, not more than 3 from the same political party). Additional advisers can be designated and accredited from other committees in matters within the jurisdiction of those committees.

Negotiation of Trade Agreements and Their Implementation under Fast-Track Procedure

In all successive grants of authority to the President for the negotiation of tariff- concession agreements since 1934, the President was also authorized in advance to implement such agreements by presidential proclamation, provided that the agreed to concessions were within the limits of the authority. The President was not required to notify or consult with Congress before or during the negotiation process, and no specific legislation was needed for the implementation of such agreements. While the basic authority with respect to the executive implementation of tariff-concession agreements has not been changed since 1934, the procedure for entering into and implementing agreements on nontariff barriers has since its inception in 1975 required that they be approved and implemented by Congress, and a fast-track procedure was provided for this purpose. The authority for negotiating such agreements also initially contained limited requirements for executive notification of and consultation with Congress. With the expansion of the President's negotiation authority in 1984 and 1988 to include also "bilateral agreements regarding tariff and nontariff barriers" (in effect, free-trade area agreements, such as the North American Free Trade Agreement), and broader multilateral agreements (namely, those of the GATT Uruguay Round), the negotiation and fast-track implementation authority was made subject to additional requirements and even possible denial.

The brief discussion of relevant fast-track provisions that follows focuses on free- trade area and multilateral trade agreements. This is so because of their complexity but also because of the present need for their extension or reenactment in view of the Administration's intention of actively pursuing, in the near term, negotiations of a free- trade agreement with Chile and, later, as well with other Western Hemisphere countries.

Conditions for and Limitations on Fast-Track Implementation of Trade Agreements

Because of the likelihood that the by now expired provisions of the OTCA 1988 relating to the President's general authority to enter into free-trade area agreements and providing for their implementation by fast-track enactment will be substantially reenacted, a brief resume of the provisions is presented below. (In fact, they have mostly been retained with only minor changes, but with additional restrictions, in the newly introduced legislation as well as in the President's proposal.) These provisions contain certain consultation and notification requirements and deadlines that must be met if the agreements to be entered into (signed) are to be implemented by fast-track procedure. They also provide for mechanisms whereby the Congress can, under certain circumstances, deny fast-track enactment of individual agreements.

The provisions require the President to notify the Congress, at least 90 calendar days before the agreement is entered into, of his intention to enter into the agreement. Even earlier -- at least 60 congressional session days before the just mentioned notice -- he must notify the Ways and Means, and Finance committees, of the negotiation of the agreement and consult with them thereon. His failure to provide either notice would not only disqualify the agreement for being approved by fast track, but prevent it from entering into force or even from being entered into at all. There is also a general requirement that the President consult with all committees having jurisdiction over matters affected by the agreement before he enters into it, and his failure to do so may result in the denial of the fast-track enactment to the implementing bill by the adoption, by both Houses of Congress, of a "procedural disapproval resolution." (For a more detailed presentation, consult CRS Report 97-41 E, Fast-track implementation of trade agreements: history, status, and other options.)

Fast-Track Implementing Procedure

First enacted by the Trade Act of 1974 and since then amended several times in minor detail, the statutory procedure for the fast-track legislative consideration of trade-agreement implementing bills is permanent law and does not need periodic renewals. It is, however, declared an "exercise of the rulemaking power of the House of Representatives and the Senate, respectively," and the relevant statute recognizes "the constitutional right of either House to change the rules (so far as relating to the procedure of that House) at any time, in the same manner and to the same extent as in the case of any other rule of that House."

The procedure requires the President to submit, after the agreement has been entered into, to both Houses of Congress a draft of its implementing bill, a statement of administrative action proposed to implement the agreement, and sundry supporting information. The law, however, sets no deadline for such submission.

The legislation provides for two types of legislation to implement a trade agreement: (1) an "implementing bill," defined as "only a bill of either House of Congress which is introduced as provided in subsection (c) [providing for the introduction and referral of implementing bills] with respect to one or more trade agreements submitted to the House of Representatives and the Senate ..." or (2) an "implementing revenue bill," defined as "an implementing bill ... which contains one or more revenue measures by reason of which it must originate in the House of Representatives." The House-origination requirement does not mean that an implementing revenue bill may not be introduced simultaneously in both chambers (which, indeed, is a requirement of the fast-track procedure); it means only that the measure as finally enacted must be the House bill.

In either case, the bill must contain:

• a provision approving the agreement or agreements in question;

• a provision approving the statement of administrative action; and changes in existing laws, or new statutory authority, that are "necessary or appropriate" for the implementation of the agreement or agreements.

Because of the likelihood that they contain tariff (hence, revenue) provisions, bills implementing trade agreements would usually be in the nature of implementing revenue bills and would, hence, be considered under the fast-track procedure as applied to such bills. What follows is a brief survey of the key elements of the fast-track procedure for the consideration and passage of an implementing bill or implementing revenue bill; a more detailed summary is presented in CRS Report 97-41 E.

An implementing bill must be introduced in both Houses on the day it is submitted by the President and is referred to the House Ways and Means and Senate Finance committees, or jointly to additional committees if it contains matters within their jurisdictions. The bill may not be amended at any legislative step, and must eventually be voted up or down in its entirety as introduced.

A committee must report the bill within 45 session days after its introduction, or else it is automatically discharged from its further consideration. If need be, the reporting deadline in the Senate for an implementing revenue bill already approved by the House may be extended to 15 session days after its receipt from the House.

In either House, the debate on an implementing bill is limited to 20 hours, but may be reduced further on a motion. The implementing bill may not be recommitted.

The bill must be voted on in either House within 15 session days from the day of its report or committee discharge. If either House receives an implementing bill from the other House before it has passed its own bill, it completes the consideration of its own bill, but the final vote is on the other House's bill, except that in the case of an implementing revenue bill, the final vote is always on the House bill.

The maximum total time for the fast-track enactment of an implementing bill (from its introduction to the final vote) is 60 session days, running concurrently but counted separately for either House: 45 days in the committee(s), and 15 days in the floor debate. Implementing revenue bills may take at most an additional 30 days for a maximum of 90: 15 additional days in the Senate committee(s) (assuming that the House has not sent its approved bill to the Senate before the 60th day after its introduction) followed by the 15 days for the Senate floor debate and final vote. In past practice, Congress has enacted implementing bills well ahead of the statutory deadlines.

(A change in the House procedure for passing nonamendable bills or joint resolutions implementing trade agreements has been proposed in H.Res. 488, which would require approval of the measure by a vote of at least two-thirds of the Members voting.)

After an implementing bill is enacted, the agreement enters into force for the United States, upon the deposit or exchange of instruments of ratification, by presidential proclamation.

Past Use of Fast-Track Procedure

The fast-track authority has thus far been used in the enactment of bills implementing the following trade agreements (excluding nondiscriminatory trade agreements with nonmarket economy countries, which, in any event, are approved by a less complex fast-track procedure) entered into under the applicable negotiating authorities:

1. A package of 14 agreements resulting from the Tokyo Round of multilateral trade negotiations within the framework of the General Agreement on Tariffs and Trade (GATT); signed June 30, 1979; enacted by the Trade Agreements Act of 1979 (P.L. 96-39, July 26, 1979).

2. U.S.-Israel Free-Trade Area Agreement of April 22, 1985; enacted by the United States-Israel Free Trade Area Implementation Act of 1985 (P.L. 99-47, June 11, 1985).

3. U.S.-Canada Free-Trade Agreement of January 2, 1988; enacted by the United States-Canada Free-Trade Agreement Implementation Act of 1988 (P.L. 100-449, September 28, 1988).

4. North American Free Trade Agreement of December 17, 1992; enacted by the North American Free Trade Agreement Implementation Act (P.L. 103-182, December 8, 1993).

5. A package of 54 multilateral and plurilateral agreements, understandings, and ministerial decisions and declarations resulting from the Uruguay Round of multilateral GATT negotiations; signed April 15, 1994; enacted by the Uruguay Round Agreements Act (P.L. 103-465, December 8, 1994).

Other Options for Action

The fast-track regime for the implementation of nontariff trade agreements involves two distinct, if interconnected, authorities: the President's specific authority to negotiate and enter into such agreements; and the fast-track procedural authority for their enactment.

As pointed out by some legal experts, lack of specific negotiating authority would not, of itself, prevent the President from negotiating and entering into trade agreements, since he is empowered by the Constitution to conduct foreign affairs of the United States, which encompasses negotiations with foreign countries, including those of trade agreements.

From the practical standpoint, however, such negotiations would be, if not futile, at least highly unsatisfactory if their legislative implementation, whenever required, could not take place under the fast-track procedure, as mentioned earlier. The Constitution confers upon the Congress express power to set tariffs and regulate foreign commerce, powers generally implicated in the entry into tariff and trade agreements. Since 1934, Congress has granted by law to the President the power to enter into tariff agreements and implement them directly by proclamation. For other types of agreements needing legislative implementation, however, Congress reserved the implementing authority. As a result, the negotiation of agreements would be made more difficult and complicated by the prospect that their already agreed to provisions might have to be renegotiated to conform them to amendments that may be made to the implementing legislation if considered under the regular rather than fast-track procedure. Consequently, the lack of the fast-track implementing authority, on whatever grounds, more crucially affects successful negotiation and, particularly, implementation of trade agreements than does the lack of the President's specific negotiating authority.

Absent the fast-track authority, other options, some less likely or useful than others, are nevertheless open for the legislative implementation of a trade agreement.

1. The agreement and its implementing legislation could be considered under regular procedure. This could result in the enactment process not being carried through to its completion or being severely delayed (e.g., by a filibuster in the Senate), and in amendments to the measure. The latter would be likely to require a renegotiation of the affected provisions of the agreement, a course of action less onerous with regard to bilateral agreements or those involving only a few parties, but quite impracticable in comprehensive multilateral agreements.

2. The Congress could informally decide to refrain from amendments and enact the measure as introduced. Such was, for instance, the case with the Automotive Products Trade Act of 1965, implementing the U.S.-Canada Automotive Products Agreement almost a decade before the fast-track procedure for implementing trade agreements was devised.

3. Since the fast-track procedure is "an exercise of the rulemaking power" of either House, a rule for fast-track consideration of an individual implementing bill could be formally adopted on an ad hoc basis by either House for its own implementing procedure.

The rule aspect of the fast-track procedure, however, also can have another, adverse consequence. In the event that the authority to use the fast-track procedure is formally extended, its applicability to the legislative implementation of an agreement can be nullified or modified in any way in which either House can repeal or change its rules.

Legislative Action in the 105th Congress

In the 105th Congress, legislative action has focused on resolving the controversy which had led to an impasse in the 104th Congress: whether to reenact the legislation renewing the President's authority to negotiate and enter into trade agreements and providing for their fast-track legislative implementation .

The broader issue in controversy is whether the Congress ought to reauthorize the fast-track procedure at all and thereby -- as seen by some -- voluntarily abrogate or at least limit its own constitutional power to make foreign-trade and tariff policy. This particularly in view of the claims by fast-track opponents of the injurious consequences of the fast track-approved NAFTA. More specifically, the controversy focuses on whether agreements implemented by fast-track procedure ought to include provisions dealing with worker rights and environmental protection issues, with the view toward inducing other nations to improve their standards in both of these areas. Foreign standards that are lower than those of the United States (and therefrom resulting lower production costs) are perceived as giving unfair competitive advantages to foreign products to the disadvantage of American producers, particularly labor. Congressional views on this issue are sharply divided, with the Administration favoring the limiting of trade agreements to trade-related issues and dealing with worker rights and environmental protection as such through other mechanisms.

A comprehensive approach to trade agreement legislation is contained in several measures, renewing the negotiating and fast-track implementing authority for specified, if different, terms, but otherwise generally retaining most of the relevant provisions of the OTCA. The earliest of them, S. 253 (Trade Agreement Implementation Reform Act), introduced January 31, 1997, would authorize the negotiation and fast-track implementation of trade agreements entered into through June 1, 2003, with a possible 2-year extension of this deadline, subject to a one-House resolution of disapproval, and retains the notification and/or consultation requirements of the OTCA with only minor changes. The bill sets four overall negotiating objectives but, unlike the OTCA, no detailed principal negotiating objectives.

Reductions in duty rates, to be implemented by proclamation, are limited to 50%, except those not exceeding 5% ad valorem, which may be eliminated; their staging may not exceed 10 years. Duty rates may not be increased above the level existing at the time of enactment.

A significant new provision of S. 253 is the restriction that the implementing bill contain only provisions necessary (rather than necessary or appropriate) to implement the agreement. A necessary provision is one that meets that is required to put into effect a substantive provision of the agreement, or is a "revenue provision." The latter is one that is not required for the implementation of the agreement, is not inconsistent with the U.S. obligations under it, and either decreases budget outlays or increases budget revenue to comply with the pay-as-you-go requirement. A revenue provisions may be amended by a specific procedure.

On September 16, 1997,the President transmitted to Congress his long-delayed proposal for legislation to renew the trade agreements negotiating and fast-track implementing authority (Export Expansion and Reciprocal Trade Agreements Act of 1997) (H.Doc. 105-130), to remain in effect for agreements signed before October 1, 2001, which could be extended to October 1, 2005, subject to one-House disapproval. The proposal differs from the OTCA by containing, in addition to overall negotiating objectives, only 7 principal negotiating objectives, among them one addressing worker rights and environmental protection (to be pursued through the WTO), an objective stated in the OTCA with considerably smaller emphasis.

In the context of negotiating objectives, the proposal retains in the authorizing clause the reference to "necessary or appropriate" provisions as part of the implementing legislation, but limits its applicability to those "directly related to trade."

The proposal omits the provision allowing committee disapproval of the negotiation (and, thereby, denial of fast-track implementation) of an agreement, subsequent to the President's initial notice of negotiations, but requires the inclusion of a pay-as-you-go provision in the implementing bill.

H.R. 2621 (Reciprocal Trade Agreement Authorities Act of 1997), an original Ways and Means Committee bill, was introduced October 7, 1997, and reported favorably October 23, 1997(H.Rept. 105-341, pt. 1); the rule providing for its consideration (H.Res. 309) was reported November 6, 1997 (H.Rept. 105-386) and placed on the calendar. Consideration of the measure, however, was postponed on November 10, 1997, at the President's request because of apparent lack of congressional support at the time, and blocked on April 1, 1998, by tabling the rule for its consideration.(H.Res. 309).

The bill contains several substantive changes from the OTCA. Principally, it limits fast-track procedure to provisions linked to the 8 principal negotiating objectives (including foreign labor and environmental protection practices) directly related to trade (as defined in the bill) and necessary (rather than also appropriate) for the implementation of the agreement, and to those providing for adjustment assistance to workers and firms, or pertinent to the operation of the agreement, or in compliance with the pay-as-you-go requirement. Agreements on matters not directly related to trade ("side agreements") may be negotiated but their legislative implementation must be by regular procedure.

Negotiating and fast-track implementing authority would be provided for agreements signed before October 1, 2001, with an extension to October 1, 2005, unless disapproved by a one-House resolution. Tariff changes, implemented by proclamation, may not decrease duty rates below 50% of their existing levels, except for those of 5% or lower; nor increase them above their January 1, 1996 levels. If staged in, tariff reductions must be fully completed within 10 years. Nontariff-barrier agreements must be implemented by enactment under the fast-track procedure, if the requirements for it have been complied with.

S. 1269 (Reciprocal Trade Agreements Act of 1997), an original Finance Committee bill, reported favorably on October 8, 1997 (S.Rept. 105-102), would provide negotiating authority for agreements entered into before October 1, 2001, extendable to October 1, 2005, unless disapproved by a one-House resolution. Tariff agreements would be implemented by proclamation, whereas nontariff and free-trade agreements would be subject to fast-track procedure. The bill restates most of the 15 OTCA negotiating objectives (which can be implemented by fast track); one exception is the promotion of worker rights, here included among the several international economic policy objectives (to which fast-track is denied).

Tariffs may not be cut below 50% of the duty rate existing on the day of enactment (except for those at the 5% or lower level), and must be staged in within 10 years; duty rates may not be increased above the existing level.

The requirements for notices and consultations, and provisions for various disapprovals generally replicate those of the OTCA, but the notice of initiation of negotiations must be given to Congress at least 90 days in advance, and fast-track procedure is denied if both (under OTCA either one) the Senate Finance and House Ways and Means committee as to disapprove of the negotiations.

A bill identical with S. 1269, H.R. 2629, was introduced on October 7, 1997.

Hearings on the topic of renewing the negotiating and fast-track implementing authority for trade agreements were held on June 3, 1997, and September 17, 1997, by the Senate Finance Committee; on September 16 and 24, 1997, by the Subcommittee on International Economic Policy and Trade of the House International Relations Committee; on September 17, 1997; on September 23, 1997, by the Subcommittee on General Farm Commodities of the House Agriculture Committee; and on September 30, 1997, by the House Ways and Means Trade Subcommittee, and by the Senate Commerce Committee.

The opposite position in the fast-track controversy is taken by H.R. 1079 (Fast-Track Fairness and Accountability Act), which would require the inclusion of labor and environmental standards provisions in trade agreements negotiated under the authority of the OTCA 88 [which has already expired]. Systematic denial or practical nullification of the agreed to standards as a means of gaining competitive advantage would be treated as an unfair trade practice, actionable under Section 301 of the Trade Act of 1974.

Fast-track legislation of limited geographical scope is contained in S. 84 (Americas Free Trade Act) and S. 85 (NAFTA Accession Act). They provide for the negotiation of and entry into, respectively, (1) bilateral or multilateral agreements with Western Hemisphere countries, leading to the establishment of the Western Hemisphere Free Trade Area, and (2) an agreement for the accession of Chile to the North American Free Trade Agreement (NAFTA), and authorize their implementation by fast-track procedure. The authority for fast-track implementation of agreements concluded under S. 84 would be open-ended, whereas in the case of Chile's accession to NAFTA, it would apply only to an agreement entered into by December 31, 1998. Both bills restrict the provisions in their implementing bills to those necessary (rather than necessary or appropriate) to implement the agreement and prohibit provisions setting or amending any statutory environmental or labor protection standards. Both establish a procedure for points of order in the Senate against provisions violating these restrictions, which requires a three-fifths majority for waiving a point of order or sustaining an appeal against a ruling on a point of order.

An amendment to clause 5 of House of Representatives Rule XXI has been proposed in H.Res. 488, which would require a two-thirds vote on any (nonamendable) bill or joint resolution to implement a trade agreement under the fast-track procedure.

LEGISLATION

H.R. 1079 (Sanders)
Fast-Track Fairness and Accountability Act. Requires the inclusion of worker- rights and environmental protection standards in trade agreements concluded under the authority of the Omnibus Trade and Competitiveness Act of 1988; treats their systematic denial or practical nullification as a means of gaining competitive advantage as an unfair trade practice actionable under Section 301 of the Trade Act if 1974. Introduced March 13, 1997; referred to Committee on Ways and Means.

H.R. 2621 (Archer)
Reciprocal Trade Agreement Authorities Act of 1997. Introduced October 7, 1997; referred to Committee on Ways and Means; reported favorably October 23, 1997 (H.Rept. 105-341, pt. 1). Rule providing for its consideration (H.Res. 309; H.Rept. 105-386) was reported November 6, 1997. Further consideration of the bill was postponed November 10, 1997, at the President's request because of apparent lack of congressional support at the time and blocked April 1, 1998, by tabling H.Res. 309.

H.R. 2629 (Matsui) (Identical with S. 1269) Introduced October 7, 1997; referred to Committees on Ways and Means, and on Rules.

H.Res. 488 (Traficant)
Amends clause 5 of the House of Representatives Rule XXI to require a two-thirds vote on any nonamendable bill or joint resolution to approve any trade agreement pursuant to fast-track procedure. Introduced June 23, 1998; referred to Committee on Rules.

S. 84 (Gramm)
Americas Free Trade Act. Directs the President to initiate bilateral or multilateral negotiation of agreements leading to the eventual establishment of a Western Hemisphere free-trade area. An agreement with Cuba is given priority, but may be entered into only after the President determines that Cuba has complied with certain freedom requirements. Fast-track implementation of such agreements is authorized without a cut-off date, but the implementing bills may contain only provisions "necessary" to implement the agreement and may not contain any provisions setting or amending statutory environmental or labor standards. A procedure is established for points of order in the Senate against provisions violating these restrictions; the procedure requires a three-fifths majority for waiving a point of order, or sustaining an appeal against a ruling on a point of order. Introduced January 21, 1997; referred to Committee on Finance.

S. 85 (Gramm)
NAFTA Accession Act. Authorizes the President to enter into an agreement for the accession of Chile to the North American Free Trade Agreement. Fast-track implementation of such agreement is authorized if it is entered into by December 31, 1998. The bill contains identical provisions as S. 84 with respect to "necessary provisions" and points of order. Introduced January 21, 1997; referred to Committee on Finance.

S. 253 (Lugar)
Trade Agreement Implementation Reform Act. Authorizes the President to enter into tariff, and tariff-and-nontariff barrier agreements through June 1, 2003 (with a possible extension for the latter through June 1, 2005, unless disapproved by an "extension disapproval resolution") and to implement tariff agreements by presidential proclamation. Other agreements are to be implemented by bills enacted under a fast- track procedure, the conditions and circumstances for the use of which (notification and consultation requirements; procedural provisions) remain mostly the same as those under the OTCA 88, except that an implementing bill must contain only "necessary provisions" for implementing an agreement, among them a "revenue provision" (a provision that is not an integral part of the trade agreement, is not inconsistent with the U.S. obligations under the agreement, and either decreases budget outlays or increases budget revenues). The no-amendment rule does not apply to points of order made against provisions that are not necessary, and upheld by a majority vote of the Senate, or to amendments to revenue provisions (for the adoption of which a detailed procedure is provided). Introduced January 30, 1997; referred to Committee on Finance.

S. 1269 (Roth)
Reciprocal Trade Agreements Act of 1997. (See p. 9.) Original committee bill; reported favorably with additional views October 8, 1997 (S.Rept. 105-102).

CHRONOLOGY

06/23/98 --H.Res. 488 introduced, amending clause 5 of the House of Representatives Rule XXI to require a two-thirds vote on any nonamendable bill or joint resolution to implement any trade agreement under the fast-track procedure. 04/01/98 --H.Res. 309, the rule providing for the consideration of H.R. 2621, was laid on the table by unanimous consent, thereby blocking further consideration of H.R. 2621. A new rule is needed for resumption of consideration. 11/10/97 --Consideration of fast-track legislation postponed at the President's request because of apparent lack of sufficient support at the time.

11/06/97 --Rule providing for the consideration of H.R. 2621 (H.Res. 309; H.Rept. 105-386) granted and placed on the calendar.

--House International Relations Subcommittee on International Economic Policy and Trade held a hearing on fast track.

10/23/97 --H.R. 2621 reported favorably by the Ways and Means Committee (H.Rept. 105-341, pt. 1).

10/08/97 --S. 1269 (Reciprocal Trade Agreements Act of 1997), an original Finance Committee bill to renew the President's trade agreement negotiating, and fast-track implementing authority, reported favorably with additional views (S.Rept. 105-102).

10/07/97 --H.R. 2621 (Reciprocal Trade Agreement Authorities Act of 1997), an original Ways and Means Committee bill to renew the President's trade agreement negotiating, and fast-track implementing authority, introduced and ordered reported favorably.

-- H.R. 2629 (Reciprocal Trade Agreements Act of 1997) introduced to renew the President's trade-agreement negotiating, and fast-track implementing authority. Identical with S. 1269 (see 10/08/97). 09/30/97 --House Trade Subcommittee and Senate Commerce Committee held separate hearings on renewal of fast-track negotiation authority.

09/24/97 --International Economic Policy and Trade Subcommittee of the House International Relations Committee concluded its hearings on the fast track.

09/23/97 --Subcommittee on General Farm Commodities of the House Agriculture Committee held a hearing on the fast-track authority.

09/17/97 --Senate Committee on Finance held a hearing on proposed legislation to renew fast-track authority.

09/16/97 --President Clinton transmitted to Congress the Administration's draft- proposal for legislation to renew his authority to negotiate trade agreements and their fast-track implementation (Export Expansion and Reciprocal Trade Agreements Act of 1997) (H.Doc. 105-130).

International Economic Policy and Trade Subcommittee of the House International Relations Committee held a hearing on fast track.

06/03/97 --Senate Finance Committee held a hearing on extending the President's fast-track negotiating authority.

03/13/97 --H.R. 1079 (Fast-Track Fairness and Accountability Act) introduced to require the inclusion of worker-rights and environmental protection standards in trade agreements concluded under the authority of the Omnibus Trade and Competitiveness Act of 1988, and provide for treating their systematic denial or practical nullification as a means for gaining competitive advantage as an unfair trade practice actionable under Section 301 of the Trade Act if 1974.

01/30/97 --S. 253 (Trade Agreement Implementation Reform Act) introduced to authorize the entry into tariff- and nontariff-barrier trade agreements, and their implementation. (For greater detail, see Legislative Action in the 105th Congress).

01/21/97 --S. 84 (Americas Free Trade Act) and S. 85 (NAFTA Accession Act) introduced to provide for the entry into, respectively, (1) bilateral or multilateral agreements with Western Hemisphere countries, leading to the establishment of the Western Hemisphere Free Trade Area, and (2) an agreement for the accession of Chile to the North American Free Trade Agreement (NAFTA), and authorize their implementation by fast-track procedure. (For greater detail, see Legislative Action in the 105th Congress).

No legislative action in 1996.

10/20/95 --Trade Agreements Authority Act of 1995 (H.R. 2371) reported favorably with amendments (H.Rept. 104-285, Part 1).

09/21/95 --Trade Agreements Authority Act of 1995 (H.R. 2371) to provide trade agreements authority to the President introduced and ordered reported with an amendment in the nature of a substitute.

08/10/95 --Economic Revitalization Act (S. 1148) introduced, providing in section 502 for repeal of all fast-track procedures and provisions.

05/17/95 --House Ways and Means Subcommittee on Trade and Rules Subcommittee on Organization of the House held a joint hearing on the extension of fast-track negotiation authority.

05/11/95 --House Ways and Means Subcommittee on Trade and House Rules Subcommittee on Organization of the House held a joint hearing on extending fast- track negotiation authority.

03/17/95 --Trade Agreement Implementation Reform Act (S. 577) introduced to reenact and amend the President's authority to negotiate trade agreements and the fast-track procedure for their legislative implementation.

CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS

U.S. Congress. House. Committee on Agriculture. Fast track trade negotiating authority; hearing before the Subcommittee on General Farm Commodities, September 23, 1997. Serial No. 105-26. Washington, U.S. Govt. Print. Off., 1997. 133 p.

U.S. Congress. House. Committee on Rules. Providing for the consideration of H.R. 2621, The Reciprocal Trade Agreement Authorities Act of 1997; report (to accompany H.Res. 309). Washington, U.S. Govt. Print. Off., November 6, 1997. 6 p. At head of title: 105th Congress, 1st session. H.Rept. 105-386. U.S. Congress. House. Committee on Ways and Means. Fast track issues; joint hearing before the Subcommittee on Trade of the Committee on Ways and Means and the Subcommittee on Rules and Organization of the House of the Committee on Rules. May 11 and 17, 1995. Committee on Ways and Means Serial 104-22. Washington, U.S. Govt, Print. Off., 1995. 289 p.

---- Trade agreements authority act of 1995; report together with dissenting views (to accompany H.R. 2371). Washington, U.S. Govt. Print. Off., October 20, 1995. 31 p. At head of title: 104th Congress, 1st session. H.Rept. 104-285, Part 1.

U.S. Congress. Senate. Committee on Finance. Reciprocal Trade Agreements Act of 1997; report together with additional views (to accompany S. 1269). Washington, U.S. Govt. Print. Off., October 8, 1997. 34 p. At head of title: 105th Congress, 1st session. H.Rept. 105-102.

U.S. President, 1991- (Clinton). Proposed legislation: "Export Expansion and Reciprocal Trade Agreements Act of 1997," message from the President of the United States ... Washington, U.S. Govt. Print. Off., 1997. 41 p. (105th Congress, 1st session. H.Doc. 105-130). Message dated September 16, 1997.

FOR ADDITIONAL READING

Bergsten, Fred. American politics, global trade. Economist, v. 344, no. 8036, September 27, 1997:23-25.

Bhagwati, Jagdish. Fast track to nowhere. Economist, v. 345, no. 8039, October 18, 1997: 21-22.

Destler, I.M. Renewing fast-track legislation. Washington, Institute for International Economics, 1997. 50 p.

Kaempfer, William H., and Stephen V. Marks. The expected effects of trade liberalisation: evidence from US congressional action on fast-track authority. World economy, v. 16, November 1993: 725-740.

Lawrence, Robert Z. and Robert E. Litan. Globaphobia: the wrong debate over trade policy. Brookings policy brief, no. 24, September 1997. 8 p.

Taylor, Andrew. White House's fast-track bid takes hits from both sides. Congressional quarterly weekly report, v. 55, Sept. 20, 1997: 2207-2208.

Taylor, C. O'Neal. Fast track, trade policy, and free trade agreements: why the NAFTA turned into a battle. George Washington journal of international law and economics, v. 28, no. 1, 1994: 1-132.

CRS Reports

CRS Report 97-817 ENR. Agriculture and "fast track" legislation, by Geoffrey S. Becker and Charles E. Hanrahan. 6 p.

CRS Report 97-879 ENR. Environment in fast track trade authority: summary of the Clinton Administration proposal, by Susan R. Fletcher. 3 p.

CRS Report 97-876 E. Fast-track authority: debate over the President's proposal, by George Holliday. 6 p.

CRS Report 97-886 E. Fast-track authority: which environmental issues are "directly related to trade," by Arlene Wilson. 6 p.

CRS Report 97-986 GOV. Fast track for trade agreements: procedural controls and proposed alternatives, by Richard S. Beth. 32 p.

.CRS Report 97-41 E. Fast-track implementation of trade agreements: history, status, and other options, by Vladimir N. Pregelj. 16 p.

CRS Report 97-885 E. Fast-track legislative procedures for trade agreements: the great debate of 1991, by Lenore Sek. 6 p.

CRS Report 97-957 A. Fast-track trade negotiating proposals: a comparison of H.R. 2621 and S. 1269, by Jeanne J. Grimmett. 29 p.

CRS Report 97-861 E. NAFTA labor side agreement: lessons for the worker rights and fast-track debate, by Mary Jane Bolle. 18 p.

CRS Report 97-896 A. Why certain trade agreements are approved as congressional-executive agreements rather than as treaties, by Jeanne J. Grimmett. 6 p.