The Washington Post explains the dilemma…
President Obama is pushing ahead with a major initiative to establish a vast free-trade zone, with the aim of enlisting Republicans as partners and testing his belief that Washington can still find common ground on major initiatives. This has stirred up traditional political alliances, as the White House plots strategy for the new year when the GOP has full control of Congress. Fellow Democrats have accused the President of abandoning past promises on trade and potentially undermining his domestic priority of reducing income inequality.
The administration is advancing the Trans-Pacific Partnership (TPP) to create the world’s largest free-trade zone. The TPP seeks to lower tariffs, establish guidelines on patents and copyrights, and level competition for international companies that compete with government-backed businesses. The President believes the deal will boost U.S. exports to Asia, as the United States faces increasing competition from China.
Rep. Ron Kind (D-Wis.), a pro-trade Democrat, has urged skeptical and non-supportive members of Congress to engage in conversations and provide feedback. The first major test for the TPP could come next month, when Senate Republicans are expected to put forward legislation that would grant U.S. trade negotiators “fast-track authority” to reach final terms that could not be changed by Congress before an up-or-down vote. The administration hopes to wrap up negotiations by the middle of next year.
Last year, Senate Democrats blocked a White House initiative to gain additional powers, in response to pressure from organized labor during an election year. Since the midterms, President Obama has increased his personal involvement, attending an international economic summit last month and promoting the potential benefits to business leaders in Washington.
However, Democrats remain critical of the Trans-Pacific Partnership (TPP), perceiving it as a repackaging of previous trade deals such as the North American Free Trade Agreement (NAFTA). They have reminded the President of his 2008 campaign, in which he expressed skepticism towards NAFTA and pledged to renegotiate it once in office.
In response, Senator Sherrod Brown (D-Ohio) held a strategy session with House Democrats to impede the deal, Senator Elizabeth Warren sent a three-page letter to the U.S. Trade Representative Michael Froman outlining her concerns, and the AFL-CIO launched an anti-TPP advertising campaign in the Washington area.
The Obama administration has launched a “whole of government” campaign to build support among both parties in Congress. Treasury Secretary Jack Lew, Commerce Secretary Penny Pritzker and Labor Secretary Thomas Perez have been involved in discussions with lawmakers.
In a speech to the Business Roundtable, Obama acknowledged the challenge of convincing his base that liberalizing trade policy and increasing global competition would not worsen wage stagnation. He noted that while some manufacturing had moved offshore due to China entering the World Trade Organization and NAFTA, more jobs had been lost due to automation and capital investment.
The TPP was first proposed by the George W. Bush administration and negotiations began with a smaller group of Pacific nations. When Obama took office, he put the effort on hold to review trade issues. However, this review was met with resistance from bureaucrats and outside pressure from interest groups, making it difficult to make significant reforms.
Philip Levy, a consultant for Senator John McCain’s 2008 presidential campaign, said Obama had to navigate a difficult path in order to appeal to both pro-trade Democrats and labor unions.
As the Obama administration continues to push for the Trans-Pacific Partnership (TPP), a free-trade agreement between the United States and 11 other nations, it has had to navigate a treacherous political landscape. According to Robert Levy, a senior fellow at the Chicago Council on Global Affairs, “It was a completely treacherous, explosive issue, and with almost every move, you’re going to make someone disappointed.”
In late 2009, Obama announced his intention to pursue the TPP, and in November 2011, he threw his full support behind the pact as part of a broader effort to focus on the Asia-Pacific region. This move persuaded Japan, the world’s third-largest economy, to join the negotiations. The administration has since completed several smaller trade deals, including one with South Korea, that sought to provide momentum.
The White House has argued that the TPP is a renegotiation of NAFTA, as it includes Canada and Mexico, as well as sections devoted to higher labor and environmental standards. Obama told business leaders, “I don’t know how it’s good for labor for us to tank a deal that would require Vietnam to improve its laws around labor organization and safety.”
The administration’s strategy on the $1 trillion spending bill, which was approved with significant Republican backing but split support from Democrats, may be a template for the White House on trade. However, Rep. Sander M. Levin (Mich.), ranking Democrat on the House Ways and Means Committee, has warned that “getting it right has to be the main objective.”
