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Congress puts Obama on bumpy road for fast-track trade deals
Question of the Day
President Obama has stepped up efforts to negotiate far-reaching trade deals with Asia and Europe in his second term, but he faces an uphill battle next year in Congress to gain the same authority his predecessors had to finalize such agreements.
Without “fast-track” authority, many trade analysts say, Mr. Obama’s hopes to enact trade deals before he leaves office may be doomed. They say longtime opposition to freer trade among congressional Democrats and wariness among some Republicans about giving Mr. Obama such sweeping authority endanger legislation in what could be a cliffhanger vote early next year.
The chairmen of the House and Senate tax-writing committees are negotiating a bipartisan bill to revive fast-track authority, which expired in the seventh year of George W. Bush’s presidency.
Fast-track authority restricts Congress to an up-or-down vote on any presidentially negotiated trade agreements with no opportunity to change them. Trade analysts say no other major country would be willing to negotiate concessions if they knew Congress could amend what is considered to be their final deal.
Mr. Obama must navigate difficult political waters to regain fast-track power.
Ralph Nader’s Public Citizen group, a leading member of the powerful progressive coalition of labor unions and environmentalists opposed to the legislation, has declared it dead on arrival, based on evidence that at least 25 House Republicans and 151 Democrats will vote against it in the 435-member House, where 218 votes are needed to pass.
As in years past, the president will have to rely heavily on Republicans and a smattering of centrist Democrats to win fast-track authority. But that coalition has been frayed by distrust of Mr. Obama among tea party and other conservative groups — one among many signs that the traditional Republican enthusiasm for free trade is waning among the party’s more populist elements.
The fast-track fight is becoming even more urgent as Mr. Obama has entered into two of the most ambitious free trade accords in years: the Trans-Pacific Partnership with 11 other Pacific Rim countries (and possibly two more) and the Transatlantic Trade and Investment Partnership with 28 members of the European Union.
“President Obama must seek to win substantial Republican support” if he hopes to get fast-track authority and win approval of a trans-Pacific trade agreement next year, and he will have to act quickly early in the year, said Scott Miller, an analyst with the Center for Strategic and International Studies.
Polls show declining public support for free trade agreements, which can be difficult even for legislators who believe in opening markets. To avoid the pitfalls of election politics, “the president needs to make this issue his own and exert leadership to get the bill enacted before summer 2014, when the election season kicks into high gear,” Mr. Miller said.
Asia deal in doubt
The lack of fast-track authority has undermined the administration’s effort to secure the Asian trade deal before the end of this year — a goal once espoused by proponents, Mr. Miller said. Other parties to the treaty among nations around the thriving Pacific region — including Vietnam, Canada and Japan — have been wary about making concessions and sensitive trade-offs when Congress could reject, reopen or pick apart the deal under ordinary legislative procedures, Mr. Miller said.
“Given the skepticism of the other parties about the U.S. ability to deliver on its commitments, a final agreement is unlikely” unless Congress first passes Trade Promotion Authority, as the fast-track bill is formally called in Congress, he said.
A defeat of fast-track legislation could deal a debilitating blow to the trans-Pacific deal, which is “at the heart of the administration’s rebalancing strategy” toward Asia, and would seriously damage Mr. Obama’s second-term trade and diplomatic agenda, Mr. Miller said.
“Beyond the lost economic opportunities, lack of a TPP agreement would feed perceptions in Asia that the rebalance is mainly about military positioning,” he said. “It would also raise questions about the U.S. ability to champion the rules of the road in economic affairs.”
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.
“Polls show that opposition to more-of-the-same trade deals is one of the few issues that unite Americans across party lines,” she said. “It’s not really surprising that there is bipartisan congressional opposition to fast-track.”
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