Trade Promotion Authority legislation hangs in the balance

Experts say the benefits and impacts of free trade agreements like the Trans-Pacific Partnership are overhyped.    The vote on whether to approve “fast-track” trade negotiating authority for President Obama is going to be tight and likely hinges on Republican support, according to political observers.
   President Obama is pushing for legislation to renew Trade Promotion Authority that will make it easier for him to finalize a multilateral trade deal with 11 other Pacific Rim nations intended to lower tariffs, provide greater market access and lower barriers to foreign investment for partner nations. Last month, House and Senate leaders presented bipartisan bills for TPA, which helps set parameters for the U.S. negotiating position, in exchange for no amendments that change the deal when a final version is delivered to Congress for a ratification vote.
   Japanese Prime Minister Shinzo Abe was in Washington for a state visit last week. In an address to Congress, he said the Trans-Pacific Partnership would strengthen relations among allies facing a rising China, but he doesn’t appear to have changed many minds. 
   Trade opponents say that past trade agreements such as the North America Free Trade Agreement benefited corporations and didn’t live up to expectations for creating middle class jobs. Many analysts counter that NAFTA had neither the enormous benefits nor the disastrous effects that were claimed when it was enacted.
   The reality of the TPP is that it is “a modest deal, it produces modest benefits, and it is likely to have a modest impact,” David Rothkopf, CEO and editor of the FP Group, which publishes Foreign Policy Magazine, said Friday on National Public Radio’s “Diane Rehm Show.”  
   Rothkopf, the author of “National Insecurity: American Leadership in an Age of Fear,” was a trade official during the Clinton administration.
   “The main reason the TPP could be significant is that China at some point might aspire to be part of TPP and thus raise its game in terms of its standards,” he said, noting the pact is a reaction to China’s drive to integrate itself in the Asian economy.
   “I was one of the people in the Clinton administration who was out selling NAFTA and I think we oversold NAFTA. I think we suggested that the benefits were going to be more than they actually were going to be and we underplayed the potential dislocations that come as a result of globalization and international markets,” Rothkopf admitted.
   “Having said that, most of the jobs we have lost have not been outsourced to other countries –  they have been outsourced to the past. These jobs are being done by robots, they are being done by computers, they are being done by hyper productivity. And what we have to do is we have to identify where we have a comparative advantage going forward.
   “We don’t want the jobs that people say are in Asia; we don’t necessarily benefit from those jobs. We have to think about the economy of the future, where we can add value, how we can train our people to add value, what kind of infrastructure we need in order to give people the competitive tools they need to attract foreign direct investment and build the businesses of tomorrow. And so it’s really a question of do we focus on the jobs of the past or do we focus on the jobs of the future,” he said.
   The TPA vote “is hanging on a thread right now,” according to Rothkopf, but he said it likely will squeak through because the White House is actually engaging with lawmakers to make the case in a way it has not always done on some other issues. 
   Obama’s biggest opposition is coming from within his own party. Left-of-center politicians, organized labor and environmental groups worry jobs will be outsourced to countries that don’t play by the same labor and environmental rules. Meanwhile, the Tea Party and right-wing Republicans also are opposed to the TPP in part because they don’t want to give President Obama more executive power.
   Last Wednesday, more than 50 immigration rights, social justice and labor leaders protested in Los Angeles against the TPP and urged Congress to block it.
   “The TPP will be worse than past trade agreements, shipping more manufacturing and service sector jobs — like those in call centers and Internet technology — overseas. This deal will also further devastate our communities, as corporate polluters would gain broad new rights, allowing multinational companies to attack environmental laws and regulations. The deal itself isn’t just about trade; it’s about rewarding multinational corporations profits for investing in Vietnam, Brunei, Malaysia and other TPP countries,” the coalition said in a statement.
   Rep. Rosa DeLauro, D-Conn., said on an earlier edition of the “Diane Rehm Show” she will vote against TPA because free trade agreements cost jobs, lower wages and increase the trade deficit. The 2012 U.S.-Korea free trade agreement has resulted in the loss of 70,000 jobs, and people who lose manufacturing jobs to outsourcing are rehired in other lines of work at two-thirds the pay they used to make, according to DeLauro.
   DeLauro also objected to the fact that the TPP doesn’t have a chapter to deal with currency manipulation by Japan and other countries, which has cost many American jobs. And she complained that the administration has not accepted any congressional input on selecting the TPP partners, which include Brunei, a country that practices Shari’a law and stones women, and countries like Malaysia and Vietnam that are known for human rights violations.
   Trade deals since NAFTA have included investment incentives for corporations to relocate overseas, Lori Wallach, director of Public Citizen’s Global Trade Watch, said. TPP chapters would undermine U.S. rights to protect food safety, rollback financial regulations, limit Buy America requirements in government procurement decisions, limit Internet freedoms and could even raise medical prices in the United States, she claimed. And foreign investors could go to a corporate arbitration panel to get around U.S. laws they don’t like, she said.
   Even Democratic presidential hopeful Hillary Clinton, who was a staunch advocate for TPP as Obama’s secretary of state, has recently taken a more cautious approach toward TPP while campaigning in Iowa.
   On Thursday, a group of about 30 Democrats met with President Obama at the White House to hear his pitch on why the TPP is important for the United States.
   The window for getting TPA done is narrowing. The Senate is expected to vote first on TPA and likely will approve the deal, Capitol Hill watchers say. But its fate in the House is an open question. The House is on a one-week recess now and is scheduled for another one week break at the end of May. TPP ministers must still put the finishing touches on a final deal this summer and the White House is trying to wrap up the TPP talks by the end of the year.
   TPA cleared the Senate Finance Committee with a majority of Democrats voting in favor. 
   On the floor, the Senate vote could come down to senators Tim Kaine, Diane Feinstein, Jeanne Shaheen and Patty Murray, according to an analysis by Politico.
   Procedural aspects of trade policy to which opponents object include the all-or-nothing nature of TPA and the secrecy surrounding trade negotiations now and in the past. But Sen. Ron Wyden, D-Ore., who co-authored the TPA bill in the Senate and was also a guest on the radio program, said that up-or-down votes are similar to what labor does in collective bargaining when contracts are referred to the membership for ratification. He agreed that trade deals should be transparent and said the rules in TPA stipulate the TPP must be public for 60 days before the President even sends a signed deal to Congress, which would give at least four months of scrutiny before a vote.
   As for the substance, Wyden said the TPP gives U.S. companies the opportunity to reach the quick growing middle class in the developing world, which is expected to double to nearly 1 billion people by 2025, many of whom will be seeking American brands. Many countries have double-digit tariffs and lowering them will level the playing field and create export-related jobs, which tend to pay better wages than purely domestic jobs, he said.
   “If you look at the 20 countries where we have trade agreements in place, they represent just 6 percent of the world’s population but they are buying nearly half of our exports,” John Murphy, vice president of international affairs at the U.S. Chamber of Commerce, said. He disputed the notion that arbitration panels supersede U.S. laws, noting they are a common practice to resolve international trade disputes and are often beneficial in maintaining the rights of U.S. companies in other countries.
   “We tend to have this very static conversation” about whether old manufacturing jobs are going to be jeopardized or restored through trade deals, David Sanger, the New York Times’ national security correspondent said on the NPR radio program. “The more important question isn’t what looks to be Korean branded here in the United States, it’s what looks to be American branded in Korea. And every time I go to Korea I see more presence of foreign goods and American goods than I used to see when I lived in Asia 20 years ago. And that is, to some degree, really how you measure some of the net success of these kinds of agreements,” he said, referring to the U.S.-Korea free trade agreement.