In 1974, Congress gave the President broad authority to counteract injurious and unfair foreign trade practices. President Nixon argued that his administration needed these new powers so that it could combat Japan's unique competitive edge and level the playing field for American businesses. Congress obliged, and in 1974 gave the President the authority to "fast track" trade negotiations that could not be amended or filibustered by Congress. The bill expired in 1979 but was renewed in 1988 and then extended until 1994. The power was restored in 2002 and again in 2015 and extended this past July until 2021. The bill known is today as the Trade Promotion Authority (TPA) and is currently being used to expand our trade and investments with Japan, the EU and the United Kingdom.
Nixon asked for this new power to deal with a growing Japanese economy. The Nixon presidency marked a major shift in the U.S. trade relations with Japan when his administration insisted that Japan along with other far Eastern countries put "voluntary" quota on their textile exports to deal with trade imbalances. In 1970 with almost 25% of Japanese textile or $557 million worth was exported to the United States, while only $16 million went form the United States to Japan. In Japan the textile dispute was growing into a full-blown political feud with Japan's industry leaders and workers were staging rallies and protests to oppose any action by their government to give in to U.S. demands. With Japan's economy booming, Secretary of State Henry Kissinger and Secretary of Treasury John Connolly pushed forward a theory that Japan's economic institution and cultural characteristic made it an outlier among trading nations requiring tailor-made approaches and policies in trade. They argued that Japan's unique competitive edge made it impossible for other countries to engage in trade with Japan on a "level playing field". What the Nixon administration needed were new policy tools to deal with Japan, so his administration worked with Congress to submit a bill which gave the presidency the "fast track" authority to negotiate trade agreements that Congress can approve or disapprove but could not amend or filibuster. Such a law would give the president both tariff and non-tariff trade barrier negotiations needed for the current round of negotiations with Tokyo. The US and Tokyo were currently in a round of negotiations to reduce tariffs under the rules of the General Agreement on Tariffs and Trade (GATT) established in 1948 as part of the United Nations International Trade Organization (ITO).
In Nixon's 1974 State of the Union Address, he urged Congress to pass the "fast track" bill he submitted to give him the ability to "negotiate flexibly and vigorously on behalf of American interests" and "usher in a new era of international trade".
"America's own prosperity in the years ahead depends on our sharing fully and equitably in an expanding world prosperity. Historic negotiations will take place this year that will enable us to ensure fair treatment in international markets for American workers, American farmers, American investors, and American consumers.
It is vital that the authorities contained in the trade bill I submitted to the Congress be enacted so that the United States can negotiate flexibly and vigorously on behalf of American interests. These negotiations can usher in a new era of international trade that not only increases the prosperity of all nations but also strengthens the peace among all nations."
References
Presidency.ucsb.edu. (2018). Address on the State of the Union Delivered Before a Joint Session of the Congress | The American Presidency Project. [online] Available at: https://www.presidency.ucsb.edu/documents/address-the-state-the-union-delivered-before-joint-session-the-congress [Accessed 27 Dec. 2018].Curtis, G. (2018). U.S. Policy toward Japan from Nixon to Clinton: An Assessment. [online] Jcie.org. Available at: http://www.jcie.org/researchpdfs/NewPerspectives/new_curtis.pdf [Accessed 27 Dec. 2018].
En.wikipedia.org. (2018). Fast track (trade). [online] Available at: https://en.wikipedia.org/wiki/Fast_track_(trade) [Accessed 27 Dec. 2018].
En.wikipedia.org. (2018). Trade Act of 1974. [online] Available at: https://en.wikipedia.org/wiki/Trade_Act_of_1974 [Accessed 27 Dec. 2018].
Sterba, J. (2018). Tokyo Apparently Nears A Textile Pact With U. S.. [online] Nytimes.com. Available at: https://www.nytimes.com/1971/10/07/archives/tokyo-apparently-nears-a-textile-pact-with-us-political-feud-stirs.html [Accessed 27 Dec. 2018].
The Balance. (2018). Does the President Negotiate Secret Trade Deals?. [online] Available at: https://www.thebalance.com/trade-promotion-authority-3305899 [Accessed 27 Dec. 2018].
Washington Examiner. (2018). Trump gets extended 'Fast Track' trade powers. [online] Available at: https://www.washingtonexaminer.com/policy/economy/trump-gets-extended-fast-track-trade-powers [Accessed 27 Dec. 2018].
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