President Obama finally won “fast-track” trade authority last week when Congress overcame a Democratic rebellion, paving the way for the administration to complete the Trans-Pacific Partnership negotiations. Obama’s Democratic allies, many skeptical of free trade in general, were particularly wary of that deal and opposed fast track in a bid to stall it.
Now that the White House has secured the ability to finish the agreement and bring it to a vote in Congress by the end of the year, it’s worth reviewing the controversy so far and what future debates might look like.
What is “fast-track”?
Fast-track, or Trade Promotion Authority (TPA), is something every president from Gerald Ford to George W. Bush has had at one time or another. Bill Clinton was the president who completed the controversial (then and now) North American Free Trade Agreement in the early 1990s, and here’s an old web page from his White House explaining fast track. According to the U.S. Trade Representative’s office, it provides for a legislative process involving an outline of goals and final up-or-down approval of any trade bill.
The point, ultimately, is to make negotiations more efficient and prevent Congress from undoing parts of a deal or adding amendments altering it after negotiations have ended. Instead, the final deal will see an up or down vote on the final product of the president’s discussions with negotiating partners. As the Washington Post‘s Philip Bump explains,
From the president’s standpoint, fast-track authority is critical to negotiating agreements because he can negotiate in good faith — what he says to his negotiating partners he’s confident will be part of the final deal (if Congress approves it).
So while it cannot change pieces of the deal during or after talks, Congress still has ultimate approval power and can scrap the end product (as a whole) if it so chooses. Obama’s request for TPA isn’t really changing the way things have worked but instead applies that historical process to the current situation with the Trans-Pacific Partnership. In fact, the administration has essentially been going through the motions of fast track throughout these negotiations despite it not being official until last week.
Those negotiations and their secrecy have been criticized, but the real controversy lies with the free trade deal being negotiated.
Okay, and what’s the Trans-Pacific Partnership (TPP) about?
The TPP is that deal, a free trade pact between the United States and eleven other Pacific Rim countries that would open markets and substantially impact the rules governing those markets. It’s been the subject of talks for years and remains a major piece of Obama’s “pivot to Asia” that prioritizes the region and, at least in part, aims to check China’s ambitions there.
It would be no slouch in scope or ambition. As economists writing for PBS NewsHour explained, “the 12 participating countries represent almost 40 percent of global output and 25 percent of global exports of goods and services.” In addition to the U.S., those countries include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Many of those already have free-trade agreements with the U.S. (NAFTA includes the U.S., Canada, and Mexico), but this deal would add new partners like Japan and enhance existing FTAs (like NAFTA).
The TPP would also be a “living agreement,” which means its terms could be adjusted over time and allow for new members to join (South Korea, Taiwan, Thailand, and the Philippines are potential future candidates and have expressed varying levels of interest).
A Congressional Research Service report concluded that the TPP would be ambitious and substantial in its economic impact: “it would be the largest U.S. [free trade agreement] by trade flows and could expand in a region that represents over half of all U.S. trade.” And Ian Bremmer of the Eurasia Group called it “a big, strategic piece” and “a global strategy doctrine that will move the world in a direction that, in the long term, is useful for the investments of America.”
One of the potential benefits of the TPP is that it could raise labor standards and give the U.S. leverage in dealing with Asian-Pacific trade partners that it would otherwise not have. That’s certainly an argument made by the White House, which has called it “the most progressive trade agreement in history.”
The TPP could also help check China’s own influence (and ambitions) in both the Asia-Pacific region as well as the global economy. As economists David Autor, David Dorn, and Gordon Hanson write:
enacting the agreement would raise regulatory rules and standards for several of China’s key trading partners. That would pressure China to meet some of those standards and cease its attempts to game global trade to impede foreign multinational companies.
That doesn’t sound that bad – what’s the controversy?
Labor unions and their Democratic allies fear that the TPP will negatively impact American workers, disproportionately benefiting big business which might move jobs overseas.
Sen. Elizabeth Warren, the Massachusetts Democrat, has cemented her reputation as a staunch consumer advocate and labor ally in her two-plus years in office. That’s made her a leading figure on the anti-TPP side and she hasn’t shied from the debate. This past spring, Warren sharply criticized Obama, but the president countered by saying “she’s absolutely wrong” and “a politician like everybody else.” He also laughed off the idea that he would fight for a trade deal that “unravel[s]” his Wall Street reforms, telling Yahoo’s Matt Bai in April that “I’d have to be pretty stupid.”
Warren isn’t alone. When the Senate narrowly defeated a filibuster on the fast track bill last week, Sen. Bernie Sanders, the Vermont independent running for president as a Democrat, called it “a great day for big-money interests, not a great day for working families.”
That’s partly because past free-trade deals, like NAFTA, are seen as having sacrificed American workers to the gods of globalization. As Marketplace reported last month, NAFTA hurt some and helped some, creating a legacy ripe for exploitation by both advocates and opponents of free trade over the past two decades. One example of this complicated history was cited by The Economist :
[Representative Beto O’Rourke’s] Texas district of El Paso lost a “traumatic” 30,000 jobs soon after the North American Free Trade Agreement came into force two decades ago, notably in clothing factories. Then El Paso became a cross-border production hub with its Mexican neighbour, Ciudad Juárez, more than offsetting earlier job losses and raising real per head incomes in El Paso by about 50% since 1994.
There has also been opposition to the assumed impact the TPP would have on copyright laws. The Electronic Frontier Foundation, for example, is strongly opposed to what is expected to be an expansion of restrictive intellectual property laws. That would include, as Vox predicts, applying American copyright terms (currently the life of the author plus 70 years) and laws against circumventing copy-protection technologies.
And as I mentioned earlier, the negotiating process itself has also come under criticism. Opponents contend the administration has been overly secretive and allowed business interests to have greater access to information about it than legislators. Members of Congress, for example, have only been able to view specifics of the deal in a secured room on Capitol Hill. That played a big role in garnering opposition for fast track, and feeds the conspiracy theories and trade skepticism.
I heard Republicans are behind Obama on this?
Yep. This has been rare moment of bipartisanship, at least between the White House and Republican leadership, and Obama needed GOP votes to get fast track approved. Many rank-and-file, tea party-aligned Republicans are just as wary of free trade deals as their Democratic counterparts. That may seem counterintuitive but both sides share a skepticism of big business and fear of outsourcing that tend to bubble up with these kind of trade deals.
For some on the GOP side, it’s been a tricky balancing act. Sen. Rand Paul, a tea party favorite and Republican presidential candidate, voted against fast track this week despite arguing for Obama to complete the TPP last year and the fact that Paul would likely benefit from it himself if elected president.
What’s next?
Now that Obama has been granted far-track authority, his negotiators can finalize a deal with the partner nations. The goal has been to do so by the end of this year, possibly by the end of this summer. That could set up an even more politically charged vote on the agreement itself just as the presidential primaries get under way.
We won’t know exactly how that debate will look until the deal is finalized and released to the public, but the controversies we’ve covered will almost certainly be back at the forefront, this time supercharged by primary politics. Look for more careful balancing acts on both sides. Rand Paul won’t be the only Republican who has to tap into tea party protectionism while also promoting open markets, and Hillary Clinton will have to balance her record of support for the TPP as secretary of state against the more populist tone Democratic primaries (and her own campaign) appear to be taking.
The post Confused About Fast Track And The Trans-Pacific Partnership? Here’s What You Need To Know. appeared first on Business Pundit.
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