Introduction
The U.S. Constitution creates "checks and balances" designed to ensure that no one branch of government has undue power over the others. Regarding trade policy, the legislative branch – Congress – has exclusive authority "to regulate commerce with foreign nations" and to "lay and collect taxes [and] duties."1 The executive branch – the president and his administration – has the authority to negotiate international agreements with foreign sovereigns. In other words, under the Constitution, the president may negotiate international trade agreements at will, but the United States can only be bound to a trade agreement through a vote of Congress. Throughout the years, Congress has created various means to coordinate the trade-agreement roles of the legislative and executive branches.
Congress maintained tight control over trade agreements' contents during most of the nation's history. However, during the last century, Congress has utilized a variety of mechanisms to delegate to the president ever-expanding aspects of the legislature's constitutional trade authority, primarily through authorizing the president to proclaim tariff modifications within certain limits. In some cases – most recently from 1967-75, 1995-2002 and 2007-present – Congress made no delegation of its authority whatsoever. Yet trade has expanded and trade agreements have proliferated under each regime.
The trade delegation mechanism known by most people today and the focus of much of this paper is Fast Track, which was established in the 1973-75 period. The most critical difference between this and all previous delegation regimes is that Fast Track authorized executive-branch officials to set U.S. policy on non-tariff, and indeed non-trade, issues in the context of "trade" negotiations. The other significant difference between Fast Track and other past trade-agreement negotiating and approval processes is the extraordinary shift in the relative power between the branches that it effected. Under Fast Track, Congress authorized the president to choose partners for international agreements that go beyond trade, determine the contents of such agreements, and sign the United States up to the terms of the deal... all before Congress had a vote. The mechanism also preset special rules for congressional consideration of such pacts, allowing the executive to write implementing legislation, while circumventing normal congressional-committee processes. Specifically, the president could submit the executive-branch written bill for a mandatory vote within a set number of days, with all amendments forbidden, normal Senate rules waived, and debate limited in both chambers of Congress.
Since Congress first approved it in 1974 (it was signed into law the following year), Fast Track has been passed on five additional occasions. It has been employed 13 times among the hundreds of U.S. commercial agreements completed since the mid 1970s. Fast Track enabled passage of the most controversial commercial pacts, such as the Uruguay Round General Agreement on Tariffs and Trade (GATT) negotiations that established the World Trade Organization (WTO), and also the North American Free Trade Agreement (NAFTA) and the Central America Free Trade Agreement (CAFTA).2
Many analysts have presented views about the economic impacts of Fast Track-enabled trade pacts, which have become a subject of heated debate in the past two election cycles.3 Yet the domestic non-trade regulatory implications of Fast Track – which provides expansive new authority for the executive branch – are less discussed, but extremely important.
When the Nixon administration first lobbied Congress for Fast Track authority, it maintained that the executive branch would pursue very limited non-tariff issues closely related to trade. Instead, over the last 36 years, the scope and content of "trade" agreements have been quietly but dramatically transformed. They are now wide-ranging international commercial pacts containing hundreds of pages of provisions that set non-trade policy in many areas traditionally reserved for Congress and state legislatures. Indeed, in practical terms, Fast Track has become a means for the president to "diplomatically legislate" on an array of non-trade matters. The mechanism has allowed successive presidents since Nixon to establish rules related to domestic environmental, health, safety and essential-service regulations, including deregulation of financial services; establishment of immigration policies; creation of limits on local development and land-use policy; extension of domestic patent terms; establishment of new rights and greater protections for foreign investors operating within the United States that extend beyond U.S. law; and even limitation of how domestic procurement dollars may be spent. Indeed, today's "trade" agreements have systematically shifted decision-making on numerous non-trade policies away from the control of local, state and national legislatures to the executive branch, and then onto global venues impervious to meaningful participation by those who will live with the results.
Fast Track might be considered a very elegant modern Trojan-horse device. With the outward (welcome) appearance of delivering trade expansion, Fast Track has been used to insert a legion of policies previously repelled by Congress. And, because of the prominent U.S. international role, the shift in the domestic balance of power has had global implications. Trade agreements established under this regime have established a global governance system – which the WTO's first director-general described as "the constitution of a single global economy."4 Yet, when Congress debated the WTO, only one senator was willing to state that he had read the WTO text and to answer simple questions about it.5 Advocates seeking to warn Congress about the WTO's non-trade policy incursions were rebuffed – with claims that they were misinformed, or that they were, in fact, protectionists against trade expansion. The Trojan analogy only goes so far in this instance, however, because Congress was complicit in constructing the very horse used to attack the inner sanctum of Congress' authority over non-trade domestic policy.
We tell the story of how the trade-agreement negotiation and approval process evolved in five acts – each representing a distinct regime of how Congress and the executive coordinated their trade-policy roles. Each "act" had its milestone achievements, followed by moments of crisis that resulted in establishment of a new coordination system. The first regime, dating from 1789 to 1890, was the longest lasting, and consisted of exclusive congressional control over trade policy. This was the time when America went from being an agricultural outpost to a developed nation on par with Europe. There were practically no trade agreements during this period, but rather tariff legislation establishing trade terms with various countries. The second regime, dating from 1890 to 1934, was a period of congressional experimentation with forms of delegated trade negotiating authority, primarily to allow the executive to penalize imperial European nations who sought to keep U.S. exports out of developing-nation markets. This period ended in the Great Depression, at a time when heads of state around the world were centralizing power. The third regime, dating from 1934 to 1967, was a period of nearly exclusive executive control over trade agreements under delegated tariff-proclamation authority. During this period, trade agreements were limited almost exclusively to tariff rates. The period ended as the post-war economic order began to break down, and various nations and blocs were challenging U.S. economic dominance. This led to the fourth regime from 1967 to the mid 1970s, when there was no delegated authority.
The fifth regime, dating from the mid 1970s to 2008, is the Fast Track period. What on paper entailed greater congressional involvement (relative to the 1934-67 system of unilateral executive-branch tariff-proclamation authority), in practice provided the executive greater control over U.S. trade and non-trade policies than the country had ever seen. Fast Track, originally justified as a way to enhance U.S. competitiveness in the face of European and Japanese competition, instead coincided with a period of record-breaking U.S. trade deficits and deindustrialization. As noted, the mechanism also facilitated passage of pacts that delved deeply into domestic non-trade congressional and subfederal jurisdiction. In the late 1980s, progressive reformers sought to substantially amend the Fast Track mechanism, but were subsequently disappointed when congressional negotiating objectives – which were non-binding, a key feature and problem with Fast Track – produced the controversial NAFTA and WTO. By the mid 1990s, wide bipartisan support for Fast Track had evaporated. The delegation authority was rejected on the House floor in 1998, only passed by a one-vote margin in the middle of the night in 2002 for the Bush II administration, and was finally allowed to die in 2007. Congress rebuffed President George W. Bush's attempts to obtain additional Fast Track authority in 2008.
The United States has refined its approach to global integration many times over. Similarly, as circumstances have changed, Congress has often modified the processes for coordinating with the executive branch regarding trade-agreement negotiations. Therefore, in our epilogue, we discuss some current proposals to reform the U.S. trade policymaking regime, including President Obama's commitments in this area. We believe it is possible to formulate a new mechanism to harvest the benefits of trade expansion without undermining the key precepts of U.S. democracy (such as checks and balances and federalism) and the policy space that Congress and state legislatures need to meet the climate, health and other crises now facing the nation.
Finally, a methodological note. Since late 2005, we have conducted in-depth research on the history of Congress' delegation of its trade authority and the origins of Fast Track. But we have been surprised at the dearth of scholarly material on the topic. Historians and presidential biographers tended to overlook the battles over Fast Track and other previous trade-authority delegation procedures, or to downplay their divisiveness. Trade lawyers often ignored the politics and economics of trade-agreement policy. Political scientists, economists and sociologists looked at the history of trade-agreement authority delegation as but a stand-in for debates about "protectionism." Yet this perspective obscures crucial questions about the mechanism's concentration of power within the executive branch, and the related expansion of "trade" negotiations into newly setting wide swaths of non-trade policy – features that make the Fast Track mechanism and era unique. Moreover, to the extent that the preexisting scholarly work touched on the trade-authority issue, it relied almost entirely on secondary sources. When we began checking original sources, we found important aspects of the existing scholarly work to be incomplete, inaccurate or inadequately referenced – particularly in regard to how past delegation systems operated and the views of opponents of these procedures.
In order to compensate for this gaping hole, we spent months in the stacks of the Library of Congress piecing together the facts from the pre-electronic record era. We reviewed hundreds of volumes of 18th, 19th and early 20th Century U.S. statutes and the Congressional Record, dozens of committee reports, and decades of newspaper prints. The result is hopefully a more complete, accurate and interdisciplinary account of a timeless constitutional issue, and a jumping-off point for further theoretical work.
This paper has two companion pieces, one that reviews the major economic outcomes of the international commercial agreements established under Fast Track; another that compares the treatment of subfederal governments and their policy space under the U.S. trade-agreement policymaking process to that of other federal systems internationally, including in Canada.6 Public Citizen recognizes the generous support of the Alfred P. Sloan Foundation in making possible the research and publication of this material.