Congress puts Obama on bumpy road for fast-track trade deals

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After giving only tepid support to free trade in his first term, Mr. Obama has embraced fast-track legislation. He hopes to expand trade to support his “pivot to Asia” and to achieve his goals of strengthening the U.S. manufacturing sector and doubling exports. Although exports have been stellar during the economic recovery, growing by 35 percent since the recession and recently exceeding pre-recession levels, they have far from doubled.

Two of Capitol Hill’s most powerful free trade advocates, Senate Finance Committee Chairman Max Baucus, Montana Democrat, and House Ways and Means Committee Chairman David Camp, Michigan Republican, promised to push for a fast-track bill early next year, but the effort has been complicated by Mr. Baucus’ decision to retire early and become ambassador to China.

“Those of us who fret about the economy can take great comfort in that,” said Jerry Jasinowski, former president of the National Association of Manufacturers. “The importance of trade to our economy cannot be overstated. The link between trade and economic growth is clear and unmistakable,” with every $1 billion of exports generating about 20,000 American jobs, he said.

Mr. Jasinowski acknowledged that the bill faces major obstacles, including declining support for free trade around the world.

“Free trade has always been a hard sell because every nation fears increased competition and the benefits are difficult to quantify,” he said. The U.S. historically has led efforts to open trade markets and, “to its credit, the Obama administration recognizes the importance of this legacy.”

Now, Congress needs to follow suit, he said.

A blow from WikiLeaks

The White House push for fast-track authority got more difficult last month after WikiLeaks leaked a copy of a draft TPP agreement on intellectual property.

Trade analyst Clyde Prestowitz said the leaked document shows that U.S. negotiators appear to have been “captured” by the lobbying of large multinational corporations that are trying to protect and expand their patented monopolies on drugs and other intellectual property rather than promote open trade. The draft trade deal, for example, contains protections for patented drugs that the pharmaceutical industry has been unable to get through Congress, he said.

“This is something very unlikely to survive open debate in the U.S. Congress,” he said, contending that Congress should reject the fast-track bill unless the trans-Pacific draft agreement is changed substantially. “Clearly what is afoot is that the non-transparent TPP talks are being used to make an end run around the Congress and the parliaments and publics of many countries to achieve far-reaching special rights [for big business] in the guise of free trade,” he said.

Mr. Prestowitz and others say fast-track authority is not needed to make trade deals. They point out that it wasn’t needed to enact the trade deals with South Korea, Colombia and Panama during Mr. Obama’s first term. But those deals were negotiated mostly by the George W. Bush administration and had overwhelming Republican support — something that any deals negotiated Mr. Obama may lack, other analysts say.

While trade deals generally have resulted in large U.S. trade deficits in recent decades, agreements passed without congressional amendment under fast-track procedures have resulted in 38 percent slower export growth than trade deals that weren’t fast-tracked through Congress, according to the U.S. Business and Industry Council, which represents U.S. manufacturers hurt by past trade deals.

Liberal groups that oppose free trade have seized on the Wikileaks disclosures, predicting that they will be critical in turning opinion in Congress against giving the president fast-track authority.

“Fast-track is history,” said Lori Wallach, director of Public Citizen's Global Trade Watch, who said the draft intellectual property agreement poses “threats to affordable medicine and Internet freedom” that would be unacceptable to Congress.

Momentum against trade was strong among Democrats and Republicans before the leaks and has only grown since then, she said.

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