Building Political Will for Accountable, Equitable Trade Policy Making.

Author:Lee, Theodore T.
 
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INTRODUCTION

Trade policy is at an inflection point. Even in the best of times, trade policy suffers from systemic dysfunction. International trade policy purports to offer broad benefits: economists find that trade increases economic output--or, in layman's terms, "grows the pie." (1) Domestic economic policy is then supposed to redistribute those gains equitably. However, American trade policy consistently fails at this second step. Foreign competition has disrupted local labor markets, leading to greater job churn and lower lifetime income for lower-wage workers. (2) The presumptive solution to this problem is Trade Adjustment Assistance (TAA), a program to help workers who lose their jobs due to import competition. Yet Congress persistently underfunds TAA. (3) The unsurprising result is a trade system unpopular among American workers. (4)

Although President Donald Trump's trade policy did not create this dysfunction, events since his election have thrown the problems with our policy-making system into sharp relief. The President and relevant agencies, led by the Office of the U.S. Trade Representative (USTR), have long asserted unitary authority over trade policy. This purported authority includes negotiating and exiting trade agreements, imposing tariffs, and bringing actions against other countries for violations of trade agreements. Enabled by this concentration of power and facing little oversight, President Trump has engaged in aggressive trade actions, such as imposing tariffs on imported goods and threatening trade wars with rivals and allies alike. (5) Experts generally believe these efforts are not only harmful but irrational: they threaten to imperil the American economy for little gain (6) and hurt the workers and consumers that President Trump claims they will help. (7)

In a well-functioning system, the public would pressure Congress to constrain the executive; however, traditional mechanisms of democratic accountability have failed. A dearth of objective information about trade has disenfranchised the public and disarmed Congress. Without accurate information from trusted sources, the public cannot determine whether the federal government is redistributing gains from trade or compensating for trade's negative effects. (8) The public therefore does not effectively petition Congress for redistribution. Lacking information and public pressure, Congress has limited ability to redistribute wealth and monitor the executive.

This democratic deficit has been growing for decades but is now at a breaking point. President Trump's recent attacks on the media and experts have made objective truth a site of partisan conflict, making it more difficult for voters to assess their self-interest. (9) Moreover, members of the President's party fear standing up to the President--even if they privately oppose the executive's policies--because of the potential electoral ramifications. (10) Voters--lacking or ignoring credible information about the effects of different policies--may choose to elect representatives whose policies align themselves with a charismatic partisan figure rather than candidates who align with voters' interests. This combination of a powerful executive and weak interbranch and public checks allows the President to adopt harmful trade policies with little opposition.

Regardless of the optimal balance of trade-policy objectives, the existing policy-making process is neither democratic nor just. American trade policy can serve different goals: economic growth, efficiency, distribution of wealth, national security, or some combination thereof. The initial underpinnings of trade policy were growth and efficiency. Over time, trade has become a tool of diplomacy and national security. (11) However, even as our goals have changed and developed, our policy-making system remains insufficiently attuned to the public will and lacks the democratic accountability that would legitimate trade policy. Our policy-making system should therefore include structural mechanisms that empower Congress--the most representative branch of the federal governments--and pressure it to respond to democratic input. Such changes to the process could also lead to changes in policy outcomes: gains from trade remain unevenly distributed in part because we lack a mechanism to recognize the political will of those hurt by trade and make actual--rather than nominal--adjustments, such as reforms to create healthy labor markets. Crucially, these policies would better reflect public input.

Without a system based on democratic support and oversight of trade, the United States will continue to subject itself to trade policy that harms workers and threatens peace and stability. Getting trade policy right the first time is critical: trade agreements have long-term (often practically permanent) implications for domestic law and policy in diverse areas. (13) To build a better policymaking system, the United States must rethink how it enters into agreements and manages its existing commitments. Without mechanisms to force discussion about the distributional consequences of trade, the federal government has little incentive--and the public, little ability--to make corrections that will benefit Americans broadly.

Given that our long-teetering trade system is under threat of collapse, how do we move forward? The Trump Presidency has emphasized the need for reform, which should include efforts to catalyze political pressure to produce more democratic trade policy. In response to this need, this Comment proposes that Congress establish a nonpartisan, expert body to produce public-facing trade analysis: the Congressional Office on Trade Analysis (COTA). This body, based on similar bodies Congress has created in the domestic context such as the Congressional Budget Office (CBO), would lead to more equitable and democratically legitimate trade policy.

COTA's primary goal would be to enhance democratic accountability by shifting power in the policy-making process away from the executive and towards Congress and the public. Two primary factors would facilitate this goal: (1) increased availability of information for Congress to assess trade policy, leading to (2) increased information dissemination to the American public. Although my proposal is process oriented--emphasizing democratic input--and outcome neutral, COTA could have policy effects such as increasing redistribution. Though such an institution alone cannot repair our broken trade policy, it is a necessary reform for restoring the credibility of information and ensuring that information is available to political actors and advocates.

This Comment proceeds as follows: Part I outlines how the President has come to dominate the trade policy-making system. Part II explains the pathologies of the current system and argues that Congress should ensure trade commitments are understandable to the voting public to increase political accountability. Finally, Part III proposes creating a new office, COTA, to conduct trade analysis with the aim of promoting the public interest.

  1. THE EVOLUTION OF THE TRADE POLICY-MAKING PROCESS

    This Part traces the evolution of trade policy making from the partnership model at the Founding to the executive-led model of today. In particular, Congress has abdicated its designated role by (1) elevating the President in trade negotiations; (2) expediting the adoption of agreements; and (3) failing to exercise oversight. This long-term trend of abdication has ultimately set the stage for the unilateral actions that President Trump has taken on trade.

    The Constitution assigns Congress the power "[t]o regulate Commerce with foreign Nations" (14) and conditions presidential treaty power on the approval of two-thirds of the Senate. (15) The Framers imposed the supermajority requirement to ensure significant congressional deliberation over international agreements. (16) But the balance of power has shifted toward the President. (17) Congress has delegated significant international negotiating discretion to the President, beginning with the Reciprocal Trade Agreements Act of 1934. (18) The 1934 Act granted ex ante authorization, allowing the President to reduce tariffs within a specific range. However, Congress eventually supplanted this process with one in which Congress ratified agreements after the executive made them. (19) Presidents themselves hastened this shift by ignoring congressional restraints. After Congress granted President Kennedy negotiating authority, he entered into agreements that extended beyond the authority delegated by Congress. (20) Congress has also delegated powers outside of trade negotiations. For example, the President can adjust tariff schedules when necessary to serve national-security interests or during national emergencies. (21)

    Concurrent with this delegation to the President, Congress has shifted its procedures to expand trade policy's reach and to favor the executive. First, it has mostly abandoned Article II treaties in favor of Article I congressional-executive agreements. (22) Congressional-executive agreements are passed like domestic legislation and require simple majorities in both chambers of Congress and the signature of the President. This change has produced a massive expansion in international commercial agreements. (23) Second, Congress has adopted "fast-track" procedures. (24) Originally introduced in the Trade Act of 1974, fast track provides for a majority vote in each chamber of Congress with no amendments on the day the President introduces the bill. (25) These procedural changes, combined with presidential discretion in foreign relations, have allowed executive-branch preferences to dominate trade policy. (26)

    To counter the growth of executive power in international trade, modern Congresses have conditioned fast-track procedures on compliance with congressional oversight. (27) These procedures have included...

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