The House Committee on Ways and Means and the Senate Finance Committee have reached agreement on a very important building block to make progress on the free trade front. It is known as "Trade Promotion Authority," and Americans for Tax Reform urges all Members and Senators to support the initiative.
What is Trade Promotion Authority (TPA)? Put simply, TPA is an act of delegation from the Congress to the Executive. It is the Congress telling the Executive "go and negotiate free trade agreements for our country. We're going to give you limitations and rules that respect the rights and prerogatives of the Congress, but otherwise go negotiate. When you have a deal, Congress will vote it up or down."
Why is TPA needed? TPA is extremely important to have if any further progress is going to be made on free trade. The executive branch must have the ability to tell negotiators from other countries that what is hammered out at the table is not going to be endangered by legislative shenanigans back home. Without TPA, other countries will be hesitant to concede anything since the executive is really only speaking for itself.
Why is free trade a good thing? Tariffs are taxes on imported goods. We pay these taxes when we buy something made abroad (increasing the cost of what we buy here), and we suffer the impact of those taxes when we sell something to another country (decreasing the profitability of our exports). There's a basic principle that if you want more of something, tax it less. If we want more trade among nations (which results in markets opening up abroad and better value for goods and services here at home), we have to lower tariffs. The way we lower tariffs (taxes on trade) is by enacting free trade agreements. The way to enact free trade agreements is to enact TPA.
Why should conservatives trust President Obama to negotiate? TPA is not about President Obama. If enacted, this TPA deal would last for three years, with an option for the Congress to continue it another three years.
That's 72 months of TPA. President Obama will be out of office in 20 months. This TPA bill is about moving on from the disastrous free trade desert that the Obama administration has been.
For these reasons and others, ATR is a supporter of TPA and urges all free market conservatives on and off Capitol Hill to be as well.