Few things are more difficult for political leaders than learning from history without becoming trapped by it.
President Barack Obama speaks to Nike Employees about the Trans-Pacific Partnership at Nike Headquarters. (Natalie Behring/Getty Images)This challenge looms over the approaching House of Representatives vote on President Obama's request for expedited "fast-track" legislative authority to complete the 12-nation Trans-Pacific Partnership trade agreement. Disappointment over the last major free-trade agreement is blinding many in Congress—particularly Democrats—to the opportunities the TPP could create for an evolving U.S. economy.
Just as government-surveillance policy split Senate Republicans this week, trade is dividing congressional Democrats. While a bipartisan Senate coalition narrowly approved fast-track authority, resistance, mostly from Democrats, could still sink that authority—and the Pacific agreement itself—in the House.
For Obama's Democratic critics, the first reason for opposing the TPP is the conviction that the North American Free Trade Agreement with Mexico and Canada, which President Bill Clinton completed in 1993, undermined U.S. manufacturing jobs. No one disputes that NAFTA prompted U.S. companies to shift some manufacturing to Mexico. But that analysis doesn't tell the entire story. In a relentlessly globalizing world, those manufacturing jobs likely would have moved to some low-wage country, even without NAFTA. By channeling manufacturing jobs toward Mexico, the treaty encouraged more firms across North America to knit together their operations into a seamless supply chain. That has preserved more high-value activities, such as product design and research, in the United States. If U.S. companies shifted their manufacturing operations elsewhere in the world, rather than relocating to Mexico as part of an integrated North American supply chain, the United States would retain fewer of those related activities—and the jobs they create.