U.S. trade: greater influence, isolationism?

By Fred Benson

With earthquakes, tornadoes, floods, police shootings, squads of Republicans running for president and deflated footballs drawing intense media coverage, it is perfectly understandable that Americans are paying scant attention to the vitally important trade policy debate taking place in Washington. The two legislative issues being played out are the Trans Pacific Partnership, known as the TPP, and Trade Promotion Authority, or TPA. In short, the TPP is the final product, and TPA will define the route to achieve that goal.

Like previous trade agreements, the TPP is designed to substantially reduce or eliminate tariff and other barriers to free and open commerce among member countries and create new markets for goods and services. If implemented, it also is expected to result in increased investment flows between the signatories and stronger economic growth for all participants. The 12 countries currently part of the negotiations have a combined population of more than 670 million and represent approximately 40 percent of the world economy. With several other APEC (Asia-Pacific Economic Cooperation) nations poised to join the group of 12, TPP is emerging as a really big deal.

Opposition to passage of the TPP is ferocious. Detractors, including many Democrats, argue that previous trade deals have resulted in lost jobs, stagnant wages and increasing income inequality in the U.S. Other significant opposition comes from environmental and labor groups who assert that potential signatories to the TPP have long histories of lax environmental regulation and substandard labor practices. In an unusually harsh response to his fellow democrats, President Obama accused them of deliberately distorting the potential negative impact of the TPP and said, “… I actually think some of my dearest friends are wrong. They’re just wrong.”

The largest concern for all interested parties is that the rules of engagement prohibit public release of any information regarding the talks. Consequently, free traders and opponents alike will have no access to the specific provisions of the TPP until the deal is closed.

While the TPP is the cart, TPA is the horse and must come first. Trade Promotion Authority, or TPA, was granted by Congress to Presidents Bill Clinton and George W. Bush to enhance the likelihood of passage for key trade legislation during their respective terms of office. Also known as “fast track,” TPA simply commits Congress to hold a timely up or down vote on the trade deal with no amendments permitted. Without TPA in place, it is highly improbable that our trading partners would be willing to negotiate seriously if they knew that the U.S. Congress could make changes to what they had approved. Failure to pass TPA most likely would dampen further consideration of the TPP. As a result, it is a matter of high interest in Washington at this time.

In a stunning victory for the president and the pro-trade community, the Senate voted to grant TPA authority to President Obama on a 62 to 37 vote just a few days ago. Forty-eight Republicans supported the bill, while only 14 of the 44 Senate Democrats rallied behind their man in the White House. Republican Senator Orrin Hatch called it “likely the most important bill the Senate will pass this year. It shows that when the president is right, we’ll support him.” As important as this outcome is, there is no certainty that the results will be the same in the House, where suspicious Tea Party Republicans may oppose granting TPA just because Obama wants it. Look for a close vote later this summer.

Having been involved in a number of trade deliberations over the years, I easily conclude that having a negotiating process that is free of interest-group tampering before and during congressional deliberation is entirely proper. If members of Congress are truly unhappy with the final product, they still have the option of voting it down. In every trade agreement, there are provisions that are popular with some and an anathema to others.

As is the case in dealing with any important legislative issue, it is necessary to look for a result that is, on net, the right thing for America. But the fundamental choice facing the U.S. on the TPP and TPA is actually far simpler than it appears: Do we as a nation want to remain a key player in the global economy or relegate ourselves to a position on the sidelines? The president is right. The Senate is right. The House should follow suit.

Fred Benson is a resident of Mount Desert and publishes Capitol Commentary, an independent political newsletter. Comments welcome. [email protected]

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