TPA Should not be a Political Pawn
Christopher Gillis

August 28, 2007

TPA should not be a political pawn. The Democratic-controlled Congress wanted to inflict some political pain on the White House when it failed to reauthorize President Bush’s Trade Promotion Authority before the June 30 expiration.

TPA allows the president to “fast track” free trade initiatives with other countries. Only President Clinton lost this authority since it was established in 1975.

The real pain, however, will ultimately be felt by American shippers, who have become increasingly reliant on the benefits and opportunities of bilateral free trade agreements negotiated between the United States and other countries.

The upside to a weakened U.S. dollar has been that more American-made goods are becoming attractive on the world market. The problem is that tariffs, as well as non-tariff barriers, still exist in many countries, which diminish the returns to be gained from this international trade.

Multilateral trade objectives, such as the World Trade Organization’s Doha Agreement and the Free Trade Area of the Americas, have proven unattainable at this point in our world’s history. It’s currently more effective for countries to take smaller bites at the free trade apple through bilateral agreements.

It’s estimated that at least 100 regional trade agreements globally have entered into force since 2002, and more than 100 are under negotiation. The Bush administration has ushered the implementation of 10 free trade agreements during this period. Clearly, more could be done.

The benefits of the 10 free trade agreements, so far, will pay off for American shippers, especially those engaged in the agricultural sector. According to the U.S. Department of Agriculture, these agreements will generate $27 billion in agricultural exports, the equivalent of one-third of the United States’ total agricultural export value in 2006.

Democratic lawmakers argue that the Bush administration has not done enough with its TPA powers to protect American workers from unfair overseas trade practices. It’s questionable how much the White House or Congress for that matter can do to protect certain industries from the detriment of foreign competition.

American business has its ways of pulling through, despite the twists and turns along the way. But by actively engaging in bilateral trade negotiations today, companies will have a better chance at carving out profitable niches within the global market place tomorrow.

No doubt, shippers and their trade association representatives in Washington could have done a better job explaining this fact and at holding lawmakers’ feet to the fire to keep TPA alive. Although the unions have their allies with the reinvigorated Democratic leadership on Capitol Hill, the stronger voice often wins the day.

At the end of the day, no matter whether the Republicans or Democrats are in charge of the White House, it’s important that TPA remains a viable tool for future trade negotiations.

U.S. Trade Representative Susan C. Schwab said it best in her reaction to the TPA’s expiration: “The United States must be in the game and not on the sidelines as other nations negotiate deals that disadvantage our businesses, farmers, ranchers and service providers.”

Chris Gillis currently serves as Editor of American Shipper, the Journal of International Logistics (www.americanshipper.com), and he can be contacted at (202) 347-1678 or cgillis@shippers.com.

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