United States: President Bush Signs Trade Promotion Authority ("Fast Track") Bill

Today President George W. Bush signed into law the Trade Act of 2002, an omnibus trade bill that grants the President the authority to negotiate international trade agreements subject to a single "yes" or "no" vote by Congress without amendments. The Trade Act of 2002 also provides trade adjustment assistance for U.S. workers displaced by foreign trade, renews and expands the Andean Trade Preference Act, and renews the U.S. Generalized System of Preferences.

Shortly after the passage of the Trade Act of 2002, the Bush administration indicated that it intends to move quickly to conclude free-trade agreements with Chile and Singapore, and enter into negotiations on free-trade agreements with a number of other countries and territories, including Australia, Morocco, Central America, and southern Africa.

Trade Promotion Authority. Trade promotion authority, formerly known as "fast track" authority, authorizes the President to negotiate international trade agreements that Congress can accept or reject, but not amend. Trade promotion authority had been granted to five former presidents until it expired in 1994. Title XXI of the Trade Act of 2002, the Bipartisan Trade Promotion Authority Act of 2002, reinstates trade promotion authority, subject to a number of conditions.

Pursuant to the Bipartisan Trade Promotion Authority Act of 2002, the President is required to consult regularly with Congress and solicit advice from advisory committees and the public as international trade agreements are being negotiated. The President is also required to notify Congress of proposed changes to U.S. trade laws in advance of completing negotiations on an international trade agreement. This will give Congress the opportunity to comment on proposed changes before an international trade agreement is final, when there is still time to modify the agreement.

The Bipartisan Trade Promotion Authority Act of 2002 lists a number of "trade negotiating objectives" set forth by Congress that the President must take into account when negotiating an international trade agreement. These objectives include:

• Reducing or eliminating tariff and non tariff barriers to trade in sectors such as goods, services, foreign investment and electronic commerce.
  
• Reducing barriers to agricultural trade, including reducing tariffs and foreign subsidies, eliminating unjustified sanitary and phyto-sanitary restrictions, and reducing or eliminating practices that adversely affect trade in perishable or cyclical products.
  
• Promoting adequate and effective protection of intellectual property rights by all U.S. trading partners.
  
• Improving adherence to international labor standards, including promoting respect for workers' rights and the rights of children, ensuring that countries do not weaken or reduce labor laws to increase trade, ensuring that counties adequately enforce their domestic labor standards, and conducting labor rights reviews of all U.S. trading partners.
  
• Promoting adherence to international environmental standards, including ensuring that countries do not weaken or reduce environmental laws to increase trade, promoting consideration of multilateral environmental agreements, and seeking market access for U.S. environmental technologies.
  
• Strengthening international dispute settlement, including seeking adherence by dispute settlement panels to the standard of review applicable under the Uruguay Round Agreement and seeking greater deference by dispute settlement panels to the fact-finding and technical expertise of national investigating authorities.

The trade promotion authority will expire on June 1, 2005, but will be automatically extended until June 1, 2007 if neither House of Congress adopts a resolution in opposition to the extension.

Trade Adjustment Assistance. Title I of the Trade Act of 2002, the Trade Adjustment Assistance Reform Act of 2002, establishes and expands a number of trade adjustment assistance programs designed to aid U.S. workers displaced by foreign trade. These programs include providing assistance to displaced workers with health insurance coverage, providing the option of wage insurance (including health benefits) to some displaced workers, providing health care benefits to some retired steel workers, and doubling the budget for retraining displaced workers.

Renewal of the Andean Trade Preference Act. Title XXXI of the Trade Act of 2002, the Andean Trade Promotion and Drug Eradication Act, renews the Andean Trade Preference Act. The renewal is retroactive to December 4, 2001, the date the Andean Trade Preference Act expired. The Andean Trade Preference Act extends preferential duty-free treatment to a large number of products exported to the U.S. from Bolivia, Colombia, Ecuador and Peru, including a number of products previously excluded from the preference program, such as textiles and apparel products. The Andean Trade Promotion and Drug Eradication Act sets forth a number of factors that the President must take into account when deciding whether to extend preferential treatment to any country under the Andean Trade Preference Act, including steps taken by the country to comply with World Trade Organization obligations, to protect workers' rights, and to combat corruption.

Renewal of the Generalized System of Preferences. The Trade Act of 2002 renews the U.S. Generalized System of Preferences, which provides preferential duty-free treatment to more than 4,650 products from approximately 140 countries and territories. The U.S. Generalized System of Preferences has been extended until December 31, 2006, with the extension being retroactive to September 30, 2001, when the program last expired.