Recent Elections Produce Trade-Friendly Congress: U.S. Exporters Stand to Gain

Apart from the Republican takeover of the Senate, the most noteworthy result of the recent U.S. midterm elections may well be the fact that both Houses have received a substantial infusion of pro-trade members. What’s more is that many of these new members of Congress won tight races by running on openly pro-trade platforms and even attacking their opponents for their general lack of enthusiasm or outright opposition to the passage of Free Trade Agreements (“FTAs”) in the recent past (for some details on these races check out The Hill.  In recent years, members of Congress have generally been hesitant to back any major pro-trade initiatives for fear that their constituencies would view a vote for free trade as one against creating jobs at home.

But the fact that the issue of free trade was a prominent one in such key elections and that the voters overwhelmingly opted for the pro-trade candidate may signal that both the politicians and their constituents are beginning to recognize that the two are not mutually exclusive, and that in fact, American industries from agriculture to aerospace need to remain competitive abroad in order to expand and create more jobs at home. This realization just might give these new faces in Washington the courage to throw their support behind the large FTAs currently in the works, namely the Trans-Pacific Partnership (“TPP”), that is currently being negotiated between the United States and more than 10 other Asia-Pacific countries, and the Transatlantic Trade and Investment Partnership (“TTIP”), an agreement in the works between the United States and the European Union.

Of course, for these agreements to be finalized and incorporated into U.S. law there must be some cooperation between the Republican dominated Congress and their Democratic counterparts in the Obama Administration – an alliance many say is quite unlikely. Ideally, the new Congress will eventually grant President Obama trade promotion authority (“TPA”), also known as Fast Track – a power granted to the President to negotiate trade agreements that may then be passed by Congress as they are, rejected altogether, but not amended or filibustered. This authority would ensure an up or down vote in Congress once a given FTA has been negotiated and signed and prevent amendments that would force the United States to dishonor certain of its obligation to partner nations, which would effectively invalidate the agreement as a whole.

TPA has been granted to presidents in the past and used to pass FTAs, most notably the North Atlantic Free Trade Agreement (“NAFTA”), but the authority expired in 2007. Since 2012, the Obama Administration has been quietly trying to get Congress to renew TPA. But these new pro-trade members entering the fray coupled with the President’s own recent emphasis on trade may be enough to finally create bipartisan support for TPA and lead to the ultimate completion and passage of these big trade agreements and others. And more FTAs would undoubtedly open up more markets to U.S. exporters and ensure that they remain competitive globally – so let’s keep our fingers crossed.