Trans-Pacific Partnership and EU free trade agreements would prevent partners from undercutting U.S. jobs, according to the president.
President Barack Obama on Friday vigorously defended his pro-trade agenda, saying regional free trade agreements being negotiated with eleven Pacific Rim nations and with the European Union are substantially better than ones that contributed to outsourcing and the decline of the manufacturing sector in the past.
Liberal critics such as Sens. Sherrod Brown, D-Ohio, and Charles Schumer, the New York Democrat who is in line to succeed Harry Reid as minority leader in two years, as well as environmental and labor groups, say the Trans-Pacific Partnership Agreement doesn’t go far enough to ensure trade partners won’t trample worker rights and the environment in order to produce low-cost goods that are disruptive to American manufacturing. That is a key charge leveled against the North American Free Trade Agreement and other trade deals, which many claim were negotiated in secrecy and then sprung on Congress for quick approval without enough time to review the entire text.
On Thursday, House and Senate leaders presented bipartisan legislation for renewing trade promotion authority (TPA), a key tool designed to strengthen the President’s hand in negotiations by setting up an expedited ratification process that gives negotiating partners confidence any deal they sign won’t be revised by Congress.
At a White House press conference with visiting Italian Prime Minister Matteo Renzi, Obama said the TPA legislation is the most progressive ever in terms of requiring enforceable labor and environmental provisions, and making human rights an objective of trade treaties for the first time. It also increases transparency by making the language of any trade deal public for several months before Congress votes. But, he added, just because some previous free trade agreements were less than perfect doesn’t mean the United States should not take advantage of new opportunities to grow the economy.
“The fastest-growing markets, the most populous markets are going to be in Asia. And if we do not help to shape the rules so that our businesses and our workers can compete in those markets, then China will set up rules that advantage Chinese workers and Chinese businesses,” Obama said, indirectly referring to free-trade agreements China is pursuing in Asia.
“And that will set the stage over the next 20-30 years for us being locked out, us being unable to protect our businesses from discrimination, our agricultural products being excluded from these areas, high tariffs that prevent us from being able to compete fairly. When it comes to services or it comes to the Internet, for example, our ability to maintain intellectual property protection or freedom in the Internet, or other requirements that tilt the playing field against U.S. workers – that’s what’s going to happen.
“So what we are doing is negotiating the highest-level, highest-standard trade agreement in our history, with strong enforceable labor provisions, strong enforceable environmental provisions,” Obama added. “And I will be able to show when the final agreement is presented that this is absolutely good for not just American businesses, but for Americans workers. And it’s good for the economy and it’s the right thing to do.”
Lori Wallach, global trade watch director for Public Citizen, took issue with those who say the fast-track authority will ensure TPP has strong rules protections for fair trade. In an interview Sunday on C-SPAN’s “Washington Journal” program, Wallach insisted that the TPP is largely negotiated already and won’t be impacted by negotiating objectives included in the TPA legislation. Furthermore, she said Congress won’t be able to hold the White House to those objectives because of the “yes” or “no” vote that is guaranteed for ratification purposes.
Business interests strongly support trade liberalization, saying it creates jobs and increased prosperity at home. Democrats are split on the issue, with the liberal wing of the party generally opposed on the grounds that deals make it attractive for manufacturers to move production offshore and lay off workers.
Last week, Rep. Chris Van Hollen, who is running for the Senate in 2016, said he will oppose TPA, as did Sandy Levin of Michigan, the top Democrat on the House Ways and Means Committee. Political observers say it’s a close call as to whether the legislation will pass. Republicans will probably have to include some sort of trade adjustment assistance – aid to workers displaced by trade deals – to get more Democratic votes. And fast track authority could be denied if conservative Republicans in the House who generally oppose giving presidents too much power work together with liberal Democrats, Ruth Marcus, a columnist for the Washington Post, said on National Public Radio’s “Diane Rehm Show.”
Many Democrats in the progressive wing complain that the terms of the TPP so far have been kept secret and that the Obama administration doesn’t have a good record of taking enforcement action when countries don’t live up to trade agreements.
On Friday, presidential candidate Hillary Clinton issued a statement saying she’s taking a wait-and-see approach to TPP to see if it addresses currency manipulation, worker safety and rights, and environmental protections, even though she already backed the deal as secretary of state.
On Fox News Sunday, Independent Sen. Bernie Sanders, who is considering challenging Hillary Clinton for president, said he opposes TPP. Sanders voted against major trade legislation, such as NAFTA, the Central American Free Trade Agreement, and permanent normal trade relations with China.
“Republicans and Democrats, they say, ‘Oh, we’ll create all these jobs by having a trade agreement with China.’ Well, the answer is, they were wrong, wrong, wrong. Over the years, we have lost millions of decent paying jobs. These trade agreements have forced wages down in America so the average worker in America today is working longer hours for lower wages,” Sanders said.
Obama said the middle class should trust him to make free trade agreements work to the United States’ benefit because he has fought for their interests since taking office six years ago.
“The politics around trade has always been tough, particularly in the Democratic Party, because people have memories of outsourcing and job loss. The point I’ve made to my labor friends and my progressive friends is that companies that are looking for just low-cost labor, they’ve already left. We’re already at a disadvantage right now. And the trade agreement I’m proposing would actually strengthen our ability to force other markets to open and strengthen our position compared to where we are right now,” said Obama.
“And being opposed to this new trade agreement is essentially a ratification of the status quo, where a lot of folks are selling here, but we’re not selling there. Japan is one of the negotiators in this deal. Now, the last time I checked, if you drive around Washington, there are a whole bunch of Japanese cars. You go to Tokyo and count how many Chryslers and GM and Ford cars there are. So the current situation is not working for us. And I don’t know why it is that folks would be opposed to us opening up the Japanese market more for U.S. autos, or U.S. beef. It doesn’t make any sense,” he added.
Asked whether free trade agreements will divide the Democratic Party in the 2016 elections, Obama noted that agreements with South Korea, Colombia and Panama were ratified during the administration’s first term without rancor in the party.
He acknowledged that some Democrats will reflexively oppose free trade, but that “there are others who, like me, believe that we cannot stop a global economy at our shores. We’ve got to be in there and compete. And we’ve got to make sure we’re writing the rules so that we got a level playing field – because when we do, products made in America and services provided by American firms are the best in the world. And I will continue to make that argument.
“And for those who argue that somehow this is contrary to the interests of working families, what I tell them is my whole presidency has been about helping working families and lifting up wages, and giving workers more opportunity,” Obama added. “And if I didn’t think this deal was doing it, I wouldn’t do it. I didn’t get elected because of the sponsorship of the Business Roundtable or the Chamber of Commerce. Those aren’t the ones who ‘brung me to the dance.’
“The reason I’m doing it is because I know this is an important thing to do, and I also know that it sends a signal throughout Asia that we are out there competing and that we are going to help maintain international rules that are fair for everybody and not so tilted in favor of one country that it ends up being bad for not only our commercial prospects but for other countries over the long term,” Obama said.
Wallach said she is not against trade in principle, just the rules as they are written for TPP. A leaked version of the TPP text so far suggests that TPP is not much different than NAFTA and other earlier trade deals, she said.
“Sadly, what the president is saying as a sales pitch is not actually related to what’s in the agreement. The agreement, the way it’s written would actually make it easier for multinational corporations to offshore our jobs to low wage countries and would push down wages by putting U.S. workers in direct competition with workers in countries like Vietnam, where workers make less than 60 cents an hour.
“When the president talked about opening markets, there’s just one little catch: we already have free trade agreements with more than half the countries in this deal” and Obama refused to follow a request from a majority in Congress in 2013 to get Japan to stop manipulating its currency to make exports cheaper, Wallach said.
The lack of a currency manipulation provision is a key reason for widespread opposition to TPP, she added.
“Instead, they have the exact text that was used for the Korea Free Trade Agreement. In 2012, we heard the same argument: if we pass this agreement more exports, more jobs,” said Wallach. In the three years since the Korea Free Trade Agreement was enacted “the U.S. trade deficit with Korea has increased 84 percent. If you use the multiplier that the administration used to claim it would create 70,000 jobs and you plug in the trade deficit increase that equates to 84,000 lost jobs…
“We need to get into other markets, but we can’t repeat the same model,” she said.
Obama: Trade deals benefit working-class Americans
