The Odd Bipartisan Coalition That Could Sink Obama's Free-Trade Legacy
Executive-power-wary Tea Partiers and labor-aligned Democrats could block "fast-track" authority for two huge agreements.
Back when he was first seeking the Democratic Party's nomination for president, Barack Obama often questioned free-trade agreements like NAFTA. By the end of his first year in office, however, President Obama had already notified Congress that the U.S. would join Trans-Pacific Partnership (TPP) free-trade negotiations. In October 2011 -- albeit with considerable prodding from Republicans -- he submitted free-trade agreements negotiated by the Bush Administration with Colombia, Panama, and South Korea to Congress. During this year's State of the Union address, Obama reaffirmed his commitment to the TPP, and announced that the U.S. would also pursue a Transatlantic Trade and Investment Partnership (TTIP) free-trade agreement with EU countries.
The sheer scope of these deals is staggering. The TPP negotiations now include Brunei, Chile, Singapore, New Zealand, Canada, Australia, Vietnam, Peru, Malaysia, Mexico, and very soon, Japan. These nations have a collective GDP of about $11 trillion. For some perspective, U.S. annual GDP is $15 trillion; China's is $7.3 trillion. U.S. joining the TPP is like entering into a deal with a country that has the world's second-largest economy. It could add an estimated $76 billion per year to the U.S. economy. To put this in context, that's equal to about 90 percent of the money saved by this year's sequester. The TPP is also crucial to the administration's "Asia pivot." China is pursuing free-trade agreements in Asia, and the TPP is an effort to balance out Chinese potential dominance in the region.
And the TTIP is even bigger. It would create the largest free-trade zone in the world and produce a $1 trillion annual increase in GDP for the economies on both sides of the Atlantic, according to a European Commission study.
If Obama could negotiate and implement just these two agreements, he would almost without question be the most successful trade president in U.S. history. But the Constitution charges Congress, not the president, with regulating commerce, which means Congress has to pass legislation implementing any agreements the president negotiates. And this is where the administration may have a huge problem on its hands.
In his book American Trade Politics, Professor I. M. Destler describes what he calls the "imbalance" that always afflicts debates over trade policy:
Producers and workers threated by imports tend to be concentrated, organized, and ready and able to press their interests in the political arena. Those who benefit from trade are generally diffuse, and their stake in any particular trade matter is usually small.
In any political battle over trade, this gives the upper hand to anti-trade voices. This is important to keep in mind now, because the success or failure of the TPP and the TTIP -- and the potential trillions in added wealth for the nation's coffers -- will likely be determined by vote in Congress that may take place as early as July.
Candidate Obama attacked free-trade agreements in 2008 because he knew that they were unpopular with important Democratic constituencies, especially organized labor. Although Obama won't face voters again, members of Congress don't have that luxury.
It is generally agreed that the Obama will not be able to conclude the TPP and TTIP negotiations unless Congress grants him Trade Promotion Authority (TPA) -- commonly known as "fast-track" -- which guarantees that Congress will hold a straight up or down vote on any trade agreement the president negotiates. Trade agreements must be voted out of committee, and members can't offer amendments.
The logic behind fast-track is obvious: Since Congress has the final say on U.S. laws governing commerce, the president speaks not for himself but for the 535 members of Congress during trade negotiations, since trade partners can't be expected to negotiate with 535 legislators. Congress still has to ratify anything the president agrees to, but as a single package. That gives trade partners the assurance that what's hammered out at the negotiating table will remain in place.
When Congress grants TPA to a president, the authorizing legislation always includes negotiating objectives. This is a reminder to the president that he is acting as a delegate from Congress. The negotiating objectives themselves, however, often become the major point of contention. It was a battle over labor and environmental standards, for example, that prevented the House from granting President Clinton fast-track authority in 1998. This time, the list of concerns might well grow to include broader definitions of things like state-owned industries and currency manipulation.
Another issue that's likely be attached to any discussion of TPA will be something called Trade Adjustment Assistance (TAA), a program to help retrain workers whose jobs are lost as a result of free-trade deals. TAA was renewed in October of 2011 and linked to approval of the three agreements approved by the Congress at that time. Since TAA is due to expire at the end of this year, it is bound to part of any legislation authorizing fast-track.
In the Senate, Democrat Max Baucus is already leading the charge for the renewal of TPA. He can expect significant Republican support, but may have some trouble corralling members of his own party. Democrat Sherrod Brown, whose power base in Northeast Ohio's Rust Belt remains upset about the 1994 NAFTA, has already expressed reservations. And since fast-track authorization is subject to filibuster, Obama may need all the votes he can get.
The battle in the House might be even more interesting. Consider a recent piece by Renee Parsons, a former environmental lobbyist, in the Huffington Post:
As proposed, the TPA would eliminate Congress' Constitutional responsibility as defined in Article I, Section 8 .... There is nothing ambiguous about Constitutional intent in 1789 -- having just concluded a revolutionary war against an imperial autocrat ... separation of powers and "checks and balances" were a clear decision by the country's founders to prevent a strong executive from usurping power from the legislative branch -- and that included foreign trade.
You're about as likely to find Parsons, who blogs for the site True Blue Progressive, at a Tea Party rally as you are to find Sarah Palin at a PETA convention. Still, Parson's argument would get heads nodding at a Tea Party gathering. One can easily see an odd alliance in the House between progressive Democrats, who reflect the concerns of organized labor, and Tea Party Republicans, who don't want to give power away to the president. Even Rep. Darrell Issa, usually a free-trade advocate, might oppose it because of suspicions about the secretive nature of the TPP negotiations.
In order to follow through on his trade agenda, Obama is going to have to figure out a way to craft a coalition of Democrats and Republicans. Unfortunately for him, he hasn't shown himself to be very adept at this sort of bridge building. So far, in fact, Obama has avoided getting involved at all, and hasn't even formally asked Congress to grant him fast-track. What the president needs to understand if, as it appears, he wants to establish a free-trade legacy, is that the toughest trade negotiators he will face are not in Tokyo or Brussels but on Capitol Hill.