How Does Congress Make Free Trade Agreements?
While Congress gave many negotiation powers in trade matters to the president in a long series of bills beginning in 1934 and continuing to today, Congress did retain some powers in the making of Free Trade Agreements (FTA). In order for a FTA to become law, both houses of Congress must ratify it. Congress also has the power to make changes to a FTA through amendments.
Ratification
The president of the United States negotiates and signs FTAs with other countries. However, as with other types of treaties and agreements, Congress must ratify these treaties in order for them to become law. Usually, this power is limited to the Senate. However, in FTAs, ratification has been required from both houses.
Amendments
Congress also has the power to submit amendments for a specific FTA. Even though the president signs a treaty, any amendments Congress submits must be considered, as ratification may not occur without the changes.
Houses of Congress
The House of Representatives votes on a FTA first. If it passes in the House, it moves to the Senate. For some FTAs, like the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act, both Houses pass the Act on the same day. For others, like the United States-Canada Free Trade Agreement Implementation Act of 1988, more than a month passes between the two decisions.
Fast Track
Usually, there is no time line for when Congress must approve or deny a FTA. However, a piece of legislation called Fast Track can be enacted in order to set such time limits and constrain debate. Fast Track also eliminates the possibility of amendments. This legislation lagged from 1994 until 2002, when Congress once again gave the president this authority until 2007. Three FTAs are still pending from before 2007 that could operate under Fast Track guidelines.
NAFTA Example
The original NAFTA negotiations were signed by President George H.W. Bush on Dec. 17, 1992, after almost two years of negotiations. It wasn't until almost a year later that President Bill Clinton was able to sign the agreement into law on Dec. 8, 1993. Each house of Congress debated the bill, with the House of Representatives ratifying NAFTA on Nov. 17, 1993, and the Senate ratifying it on Nov. 20, 1993. NAFTA was ratified under Fast Track, and therefore no amendments were submitted.
