Congress and trade authority

was the subject of my Trade Tripper column in the recent weekend issue of BusinessWorld:

An area of tension between the Executive and Legislative branches of government is in the area of international trade. Constitutional law is simple enough regarding that: tariff powers are with the Congress and treaties can only take effect upon concurrence by the Senate. But, as usual, what looks clear-cut on paper becomes complicated in real life, with trade being directed effectively by unelected bureaucrats and going past the country’s elected representatives.

So it is with interest -- considering the constitutional similarities between the Philippines and the US -- that your Trade Tripper read the draft “Bipartisan Congressional Trade Priorities Act of 2014’’ of the US Congress (see copy here http://www.finance.senate.gov/imo/media/doc/TPA%20bill%20text.pdf).

The bill clearly lays out the fact that trade and tariff matters are within the purview of Congress, for which the Executive acts only under proper delegation.

The bill lays out the US’ overall trade objectives, which amongst others include: obtain more open, equitable, and reciprocal market access; the reduction or elimination of barriers and distortions that are directly related to trade and investment and that decrease market opportunities for US exports; further strengthen the system of international trade and investment disciplines and procedures, including dispute settlement; to foster economic growth, raise living standards, enhance competitiveness, promote full employment and enhance the global economy; ensure that trade and environmental policies are mutually supportive and to seek to protect and preserve the environment; promote respect for worker rights and the rights of children consistent with core labor standards of the International Labor Organization.

Most admirably is the objective of the US to “ensure that trade agreements afford small businesses equal access to international markets, equitable trade benefits, and expanded export market opportunities, and provide for the reduction or elimination of trade and investment barriers that disproportionately impact small businesses.” This is a policy sadly lacking urgency for the Philippines.

Interestingly, the US president is required to notify, consult, and coordinate with the Congress in every step of the negotiations: from initiation to conclusion. This is a world apart from the system here, where Congress is usually called in only when the trade agreement needs the concurrence of the Senate, the default procedure being to consider the trade agreement as an “executive agreement” and thus purely within the purview of the Executive branch.

But such would be anomalous as treaties effectively change Philippine laws and for Congress to be kept out of the process means that the president can change or amend laws simply by entering into international agreements.

Hence, why the US bill requires the US president, at least 90 calendar days before the day on which the president enters into the trade agreement, to notify Congress of his intention to enter into the agreement and promptly thereafter publish notice of such intention in the Federal Register. Also, within 60 days after entering into the agreement, the president must submit to Congress a description of those changes to existing laws that the president considers would be required in order to bring the United States into compliance with the agreement. Quite markedly, the US president is required to make the information relating to the proposed agreement available to the public.

Should the US president fail to closely work with Congress, then the US bill allows for “procedural disapproval resolution,” This is a Congressional resolution which essentially reads as follows: “That the President has failed or refused to notify or consult in accordance with the Bipartisan Congressional Trade Priorities Act of 2014 on negotiations with respect to and, therefore, the trade authorities procedures under that Act shall not apply to any implementing bill submitted with respect to such trade agreement or agreements,” with the blank space being filled with a description of the trade agreement or agreements with respect to which the President is considered to have failed or refused to notify or consult.

The US bill would be a good study for Philippine policymakers and lawmakers. The present law authorizing the Philippine president to enter into trade agreements (Section 402 of the Tariff and Customs Code) certainly has flaws, most notably its general language.

Thus, the president can enter into a trade agreement “for the purpose of expanding foreign markets for Philippine products as a means of assistance in the economic development of the country, in overcoming domestic unemployment, in increasing the purchasing power of the Philippine peso, and in establishing and maintaining better relations between the Philippines and other countries.”

The foregoing is quite possibly an instance of undue delegation to the president. Commonsensically, for instance, any proper delegation should be only for a set period and not in perpetuity.

The president’s trade authority under Section 402 has certainly been criticized, most cogently by Justice Florentino Feliciano (see his paper “Deconstruction Of Constitutional Limitations And The Tariff Regime Of The Philippines: The Strange Persistence Of A Martial Law Syndrome”).

Unfortunately, present drafts of Congress’ Customs and Tariff Modernization Act absolutely overlook this matter.