Members of Congress are likely to oppose a proposed rule that broadens the definition of “free trade agreement.” As stated in the Inflation Reduction Act, a crucial element of President Biden’s climate agenda, the term will include agreements where countries reduce or cease to impose tariffs and export restrictions, and focus on raising standards in human and environmental protections. The definition is broader than has traditionally been used, which has led to critical minerals agreements signed by the US, the European Union and Japan qualifying as FTAs, though they have not received congressional approval. This has enabled electric vehicles to receive additional tax breaks in the US, a change that requires the approval of Congress. Members of Congress have hinted that they may take legal action or try to pass new legislation. While US presidents have negotiated “free trade agreements,” the term is not technically defined in US law. Biden’s administration appears to be departing from convention in this regard, whereas the Trump administration declined to seek congressional approval for trade deals brokered with China and Japan but refrained from defining them as FTAs in spite of US objections.
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