Congress and trade policy: Time to refresh the trade advisory system?

 Image source:  USTR

Image source: USTR

By Ryan Dukeman

From Ross Perot’s “giant sucking sound,” to Pat Buchanan’s promise to “make America first again,” to the 2016 presidential election, international trade has long been a lightning rod issue in American politics.  During the 2016 campaign, then-candidates Bernie Sanders and Donald Trump made surprisingly forceful challenges to bipartisan orthodoxies on the merits of foreign trade, upending a Washington consensus that had dominated from World War II to the “end of history.”

Since his election, President Trump has largely made good on the protectionist promises he made during the campaign – pulling the U.S. out of the Trans-Pacific Partnership, attacking Canada and threatening to pull out of NAFTA re-negotiations, sanctioning allied countries over steel and aluminum production, and promising to bilateralize future trade agreements such as with the post-Brexit UK.

As the administration works to upend decades of US and international trade policy, it’s useful to examine the structure and history of the Congressional Trade Advisory System created under the Trade Act of 1974. The system  mandates the participation of bipartisan,  expert congressional advisory groups in the United States Trade Representative’s (USTR) trade policy formation and execution processes.  In an era of rapidly changing American trade policy, this system provides a blueprint or avenue for congressionally-driven policy priorities in a bipartisan perspective. If properly modernized and utilized by members of Congress (of both parties), it could provide a worthwhile and fruitful counterweight to the unorthodox policies of the administration’s trade leadership.

The Trade Act of 1974 and the Congressional Advisory System

At roughly the same time Congress was moving to reclaim its traditional influence over foreign policy through vehicles like the War Powers Resolution, it also created new vehicles to extend that influence into policy processes previously dominated by the executive. These innovations, exemplified by the Trade Act of 1974, collectively formed the congressional advisory system. This system codified for the first time members and institutions of Congress as participants in the internal deliberations by which the executive branch made  policy on issues such as European collective security and multilateral trade. Under the trade advisory system, for example, the USTR is statutorily required to consult before, during, and after the negotiation of all trade agreements with specific members of Congress appointed to the advisory committee.

Before the Trade Act, trade policy had largely been made by the executive branch, in an extremely complex, multi-agency  process of bureaucratic bargaining and consensus seeking. The lion’s share of congressional consultation occurred post facto during the ratification process.

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Literature on the effect of the trade advisory system, while limited, strongly supports the notion that it has markedly shifted U.S. trade policy preferences in favor of the outside groups represented.

The  system, for example, has better aligned presidents’ trade agreements with the preferences of Congress with respect to labor protections and intellectual property. Congressional advisors have been a vehicle for those preferences to be incorporated before and during the negotiation of an agreement, rather than after the fact or during the ratification debate. In NAFTA, for example, Republican congressional advisors sought to limit proposed trilateral Commissions for Labor Cooperation to only monitor the degree of enforcement of labor laws in each country, rather than recommend or authorize sanctions for their violation. This provision split the Democratic caucus along free-trade and labor lines. Charlene Barshefsky, President Clinton’s USTR, told University of Virginia’s Oral History project that NAFTA was “very costly, most particularly to the President’s relationship with the Democratic Party and its leaders,” making him more reliant on Republican members and preferences to secure passage of a deal.

Also in the 1990s, liberal Democratic congressional advisors led by Rep. Sander Levin (D-MI) pushed the centrist Clinton to allow for the creation of the Congressional-Executive Commission on China in exchange for passage of Permanent Normal Trade Relations with the People’s Republic. This shifted the median executive position on human rights in China and allowed for direct congressional advisory input of its own, by creating a new hybrid legislative-executive institution  whereby members of Congress could directly advise during the executive’s policymaking process, rather than simply grandstand publicly from the other side of Pennsylvania Avenue. This commission yielded a “much more detailed level of scrutiny” on human rights than that faced by any other U.S. trading partner in the world to date.

These and other agreements, including the Tokyo Round of GATT in 1979, the U.S.-Canada Free Trade Agreement in 1987, and the now-defunct Trans-Pacific Partnership in 2016, reflected a new kind of congressional reform for foreign affairs governance. The congressional advisory system typified by the Trade Act of 1974 was more outwardly engaged, aimed at inserting Congress into executive policy deliberations rather than merely changing the Hill’s internal mechanisms. It inserted select legislators directly into the executive processes by which trade policy was formulated, allowing for a much greater voice in the content of trade agreements ex ante. By leveraging Congress’s constitutional power over trade policy , the advisory system has allowed Congress to have a sustained impact on the formation and conduct of foreign policy in trade issues over the last 30+ years.

A weakened advisory system

While the trade advisory system  offers Congress the potential to reclaim some of its constitutional influence over US trade policy, the legislative branch’s current position reflects the further ceding of trade power to the executive branch . Part of the present reluctance stems from  current political environment where members of one party are reluctant  to criticize or challenge a president of the same party. In today’s GOP, the consequences of  doing so can be fierce – just ask Rep. Martha Roby (R-AL). While some members, notably retiring Sen. Bob Corker (R-TN), have attempted to push back at the president’s unorthodox trade moves (e.g. starting a trade war with the European Union while working to save a sanctioned Chinese telecom company), thus far none of these efforts have succeeded in achieving actual policy change -- even in the case of ZTE, where veto-proof bipartisan majorities in both houses reportedly support overturning the administration’s rescue package.

The failure of Congress to successfully overturn the administration’s trade policy cannot be explained by leadership’s deference to the president alone. One additional institutional factor at play is that the current trade advisory system is not reactive enough, focusing primarily on the content or passage of new trade agreements rather than stopping the unraveling or enforcement of existing ones. The framers of the 1974 Trade Act  would not likely have predicted there would one day be a president eagerly making (trade) war with Canada and the EU, allies with whom every prior president since the end of World War II has sought closer ties and integration.

Faced now, though, with an administration seeking to tear up existing or proposed agreements like NAFTA and the TPP, and significantly rewrite or pull out of bilateral agreements with South Korea and Japan, Congress is operating under an institutional advisory model that gives it nothing on which to advise. The present model, whether a conscious facet of its design 40 years ago or not, assumes that once a trade agreement is signed, it will not be repealed, reflecting an “ever closer union” or “end of history” thinking that the present populist wave has put sorely to rest. Given this reality, perhaps it is time for Congress to consider a reformed congressional advisory system. An updated system should offer similar opportunities for congressional input – perhaps even “veto-player” status – into the executive’s deliberation process for the repeal or enforcement of existing trade agreements, similar to what the present system does for the formation of new agreements.

Ryan Dukeman is a 2017 graduate of Princeton’s Woodrow Wilson School of Public & International Affairs. His previous work has focused on congressional reform, foreign policy governance, and comparative democratic institutions.