Last week Shinzo Abe, the Prime Minister of Japan, came to Washington to visit the White House and give a speech to a joint session of Congress.
In between the Presidential haiku about spring and a toast over sake, there was a lot of discussion about promoting free trade between the United States and Japan, along with several other countries in Asia and around the world.
The Trans-Pacific Partnership (TPP) is a trade agreement between the US, Canada, and 10 countries in the Asia-Pacific region that has been in development for nearly a decade. The TPP would eliminate tariffs on goods and services throughout the region, remove a variety of non-tariff barriers, and coordinate regulations. It is a way to help promote trade between the US and a variety of countries throughout the Pacific.
President Obama sees the TPP as a legacy builder for him. The TPP could be for Obama what NAFTA was for Bill Clinton. It is a true game changer that would change the nature of trade throughout the world. Notably, one country absent from the agreement is China, since the TPP is seen as a way to strengthen ties with countries without inclusion of the largest player in the region.
The Role of Congress
In order to negotiate a deal on the Trans Pacific Partnership, President Obama has asked Congress to grant him “trade promotion authority” or “fast track” authority. In effect, this would allow the President to negotiate a deal on the TPP and then Congress would simply vote for or against the final agreement that he presents to them.
Republican leadership in both the House of Representatives and the Senate have shown support for granting the President this fast track trade authority. Senate Majority Leader Mitch McConnell (R-KY) even called the bill “a real step forward” and predicted that the measure would “do fine” in the Senate. On the House side, Representative Paul Ryan (R-WI) is also in favor of the idea. As a result, bills granting the President trade promotion authority have passed out of the Senate Finance Committee and the House Ways and Means Committee in recent weeks.
With bills requested by President Obama, endorsed by a wide variety of business and trade organizations, and supported by leadership in the House and Senate, granting fast track trade authority to negotiate the Trans-Pacific Partnership should be a slam dunk to pass the Congress, right?
Wrong.
In recent weeks, a variety of groups and individuals have emerged in opposition to granting the President this authority and negotiating this trade agreement. This opposition could make success much more difficult.
On the Left
Opposition to the Trans-Pacific Partnership among Democrats is coming from the progressive arm of the party. While they don’t oppose granting the President fast track negotiating authority, those in this camp argue that the TPP will result in a loss of well-paying union jobs in America that will be transferred overseas to workers in countries where wages are a fraction of what they are in America. To them, the TPP will simply perpetuate the problems brought on my other free trade agreements, such as NAFTA.
On the Right
Opposition to the agreement among Republicans is centered in the Tea Party. Primarily, they oppose giving the President what they see as a blank check to negotiate as he sees fit. They don’t like giving him any more authority and they don’t trust him to negotiate in good faith. They point to the fact that much of what is in the 29 chapters of the TPP are still secret and not subject to public scrutiny and debate.
Their other argument against the proposal is actually very similar to the criticisms coming from the left. They are also worried about the impacts to American jobs and American industries that struggle to compete with cheap foreign imports. They agree with Ross Perot, who in 1992 described the “giant sucking sound” of jobs leaving the US as they flow to other countries as a result of free trade agreements.
Presidential Politics
With the Presidential race heating up this debate is becoming a major issue, especially on the Democrat side. Hillary Clinton is in a tough position. As the wife of President Bill Clinton, she was on the front lines of the negotiations on NAFTA. While she can argue that she wasn’t intricately involved in the NAFTA negotiations of the 1990s, the same cannot be said of the TPP negotiations. As Secretary of State under President Obama, Hillary Clinton actively promoted giving the President fast track authority to negotiate on this issue. Furthermore, she often lobbied on behalf of passage of the Trans-Pacific Partnership, arguing that it was a vital tool to enable America to remain competitive in the world economy.
However, some of the biggest critics of the TPP are people actively involved in the Presidential race on the Democrat side. Senator Bernie Sanders (D-VT), the only other declared candidate for President from the Democrat Party, is a strong opponent to the TPP. Other possible Democrat contenders, such as former Maryland Governor Martin O’Malley and Massachusetts Senator Elizabeth Warren also oppose the Pacific free trade agreement. O’Malley is even using it as a way to explain his decision about whether to officially enter the race for President.
Given the dynamics of this issue, Ms. Clinton has a choice to make. Should she support the position of President Obama, a position she actively promoted just a few years ago? Or, should she side with the progressives and oppose the agreement? If she does decide to oppose the agreement, she will engender a lot of support in the Democratic base, but it could hurt her in the business community and as she tries to appeal to moderates and conservatives later in the Presidential race.
What’s Next?
The ultimate decision on granting the President trade promotion authority and on the Trans-Pacific Partnership still remains unclear. While the bills introduced in the House and Senate have passed out of committee, they face stiff opposition from the full bodies. In the Senate, progressive Democrats are already fighting the bill, and they have support from people such as Sen Chuck Schumer (D-NY), the next Democrat leader of the Senate. In the House, Tea Party Republicans are also getting ready for a fight and they will make passage difficult. If the Trans-Pacific Partnership is to survive it will need strong support from a variety of groups throughout Congress, the Obama Administration, and the larger business and international trade community.
