More details about the TPP, and more reasons for Democrats1 to oppose it.
Have you heard? The TPP is a massive, controversial “free trade” agreement currently being pushed by big corporations and negotiated behind closed doors by officials from the United States and 11 other countries – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The TPP would expand the North American Free Trade Agreement (NAFTA) “trade” pact model that has spurred massive U.S. trade deficits and job loss, downward pressure on wages, unprecedented levels of inequality and new floods of agricultural imports. The TPP not only replicates, but expands NAFTA’s special protections for firms that offshore U.S. jobs. And U.S. TPP negotiators literally used the 2011 Korea FTA – under which exports have fallen and trade deficits have surged – as the template for the TPP. In one fell swoop, this secretive deal could:
Although it is called a “free trade” agreement, the TPP is not mainly about trade. Of TPP’s 29 draft chapters, only five deal with traditional trade issues. One chapter would provide incentives to offshore jobs to low-wage countries. Many would impose limits on government policies that we rely on in our daily lives for safe food, a clean environment, and more. Our domestic federal, state and local policies would be required to comply with TPP rules.
The TPP would even elevate individual foreign firms to equal status with sovereign nations, empowering them to privately enforce new rights and privileges, provided by the pact, by dragging governments to foreign tribunals to challenge public interest policies that they claim frustrate their expectations. The tribunals would be authorized to order taxpayer compensation to the foreign corporations for the “expected future profits” they surmise would be inhibited by the challenged policies.
especially since corporate America is so gung-ho for the agreement:
As big a setback as Friday’s vote on Capitol Hill was for President Obama’s efforts to advance his trade agenda, it was an even bigger rebuff for the leaders of American business.
While there are deep divisions over trade policy among Democrats, and to some extent among Republicans as well, corporate America has been nearly unified in its support of a deal that would lower various barriers to trade and investment between the United States and 11 other Pacific Rim nations.
Though many sought to put the best face on the vote, business groups and chief executives were quick to voice their displeasure with the House’s rejection of aid to workers harmed by imports, which could doom prospects for eventual approval of a wider trade pact.
Although certainly a minority, a few business groups oppose the trade pact. Unions, environmental groups and many liberals are also opposed. Many critics cited the job losses that followed the signing of North American Free Trade Agreement more than two decades ago.
There was also some applause for the defeat from groups like the American Sustainable Business Council, a network of progressive business organizations.
“The T.P.P. would give multinational corporations unprecedented power to evade safeguards that protect consumers, workers and the environment. It would hurt smaller, innovative businesses,” said David Levine, the group’s co-founder.
While most economists generally support the White House’s trade agenda, some on the left have kept up a steady drumbeat, warning that it has been structured primarily to advance the interests of Wall Street and major corporations doing business abroad.
I’m probably not the only one amused at the framing of the defeat of the Trans-Pacific Partnership Trade Deal. You see, even though Republicans have majorities in both House and Senate, the TPP failed solely because of those intransigent Democrats! How dare they vote out of lockstep with the President?
The Chicago Tribune’s headline spells it out:
The House vote Friday included two related measures, both of which had to pass in order to send the legislation — which was approved last month by the Senate — to the president’s desk.
A bill to give the president fast-track authority to negotiate future trade deals was approved by a 219-211 vote. But another measure regarding assistance funds to retrain workers — a program typically supported by Democrats — failed 126-302 largely because Democrats voted against it.
Because the Senate had previously approved both measures as a single bill, the House’s failure to pass the retraining measure prevented the overall package from advancing. Supporters plan to hold another vote on the retraining bill early next week, giving the White House and congressional Republicans another chance to drum up votes.
Obama’s push for the legislation was his biggest lobbying effort since the 2010 passage of the Affordable Care Act. He personally pressed fellow Democrats to support the measure in a meeting Friday morning on Capitol Hill and during an unscheduled appearance Thursday night at the annual congressional ballgame at the Nationals ballpark.
He made it personal. He appealed to their loyalty. He asked them to give him what every modern president has had. He argued the facts, disputed the politics, quarreled over the history and at times lashed out at those who still refused to stand with him.
Yet in the end, after years of frustration with Republicans blocking his ideas in Congress, President Obama on Friday found the most sweeping legislative initiative left on his agenda thwarted not by the opposition but by his own party. If not for his fellow Democrats, Mr. Obama would have a landmark trade bill heading to his desk for signature.
The Wall Street Journal’s perspective is clear: Obama should just resign now since there are only 2 years left in his term…
House Democrats dealt President Barack Obama a major setback in his bid for expanded trade-negotiating powers, roundly rejecting on Friday a workers-aid program that was a key component of the bill and leaving the White House’s trade agenda in limbo.
While stinging, the vote was not the last word in the trade fight, as House Speaker John Boehner (R., Ohio) said there would be a re-vote by Tuesday on extending the aid program, which is designed to help workers hurt by international trade.
But Friday’s defeat showed the degree to which Mr. Obama’s trade agenda is on shaky ground in Congress. The House voted against the workers-aid program by 126-302. To improve those numbers, House Republican leaders, the White House and pro-trade businesses will need to find ways to win over a combination of Democrats who are skeptical of the overall trade push and Republicans leery of supporting the aid package.
It also underscored the waning influence of a second-term president, particularly on an issue many Democrats see as toxic to their re-election prospects, given concerns in their districts that U.S. jobs are being sent overseas.
What about the bill being defeated because it is a boondoggle?
The political battle over the enormous, twelve-nation trade agreement known as the Trans-Pacific Partnership keeps getting stranger. President Obama has made the completion of the deal the number-one legislative priority of his second term. Indeed, Republican opponents of the T.P.P., in an effort to rally the red-state troops, have begun calling it Obamatrade. And yet most of the plan’s opponents are not Republicans; they’re Democrats.
Obama’s chief allies in his vote-by-vote fight in the House of Representatives to win “fast-track authority” to negotiate this and other trade deals are Speaker John Boehner and Representative Paul Ryan—not his usual foxhole companions. The vote may come as soon as Friday. The House Republican leaders tell their dubious members that they are supporting Obama only in order to “constrain” him. Meanwhile, Obama is lobbying members of the Black Congressional Caucus, whose support he can normally count on, tirelessly and, for the most part, fruitlessly. “The president’s done everything except let me fly Air Force One,” Representative Cedric Richmond, Democrat of Louisiana, told the Christian Science Monitor this week. Nonetheless, Richmond said, “I’m leaning no.”
The long, bad aftertaste of NAFTA—the North American Free Trade Agreement, enacted in 1994—explains much of the Democratic opposition to the T.P.P. Ronald Reagan originally proposed NAFTA, but Bill Clinton championed it, got it through Congress mainly on Republican votes, and signed it. In many Democratic districts, NAFTA is still widely blamed for the loss of hundreds of thousands of American manufacturing jobs, and for long-term downward pressure on wages. When President Obama argues that the T.P.P. is not NAFTA, he is correct. It convenes Pacific Rim nations and economies of many stripes, from wealthy, democratic Japan to authoritarian, impoverished Vietnam, and it includes six countries with which the United States already has free-trade agreements. If enacted, it will encompass forty per cent of global economic activity. It is less a traditional trade deal than a comprehensive economic treaty and, at least for the United States, a strategic hedge against the vast and growing weight of Chinese regional influence. What exactly the T.P.P. will do, however, is difficult to know, because its terms are being negotiated in secret. Only “cleared advisors,” most of them representing various private industries, are permitted to work on the text. Leaked drafts of chapters have occasionally surfaced—enough to alarm, among others, environmentalists, labor groups, and advocates for affordable medicine.
It’s hard to think of a fight that has showed President Obama to worse effect than his effort to pass Trade Promotion Authority and the Trans-Pacific Partnership over widespread Democratic opposition. His respect for his opponents has been at low ebb, and since many of his opponents in this fight are Democrats, that means we’ve seen him taking uncharacteristically nasty shots at people like Sen. Elizabeth Warren.
Now, in the aftermath of a vote in which the must-pass-to-pass-the-TPA Trade Adjustment Assistance was defeated, Obama used his weekly address to mislead about what’s going on. House Democrats overwhelmingly voted against the traditionally Democrat-supported assistance program for displaced workers because, according to the rule the House had adopted, TAA was linked to the fast-track TPA bill. No TAA, no TPA. Since TPA passed in the wake of TAA’s defeat, Republican leadership is bringing TAA back for another vote in hopes of getting it, and fast track along with it, through next week. That’s the weird, confusing procedural background—background Obama pretended does not exist as he touted the benefits of Trade Adjustment Assistance in his weekly address.
Paul Krugman calls it a defeat of the Davos Democrats, I like that phrase:
OK, I didn’t see that coming: even though I have come out as a lukewarm opponent of TPP, I assumed that it would happen anyway — the way trade deals (or in this case, dispute settlement and intellectual property deals that pretend to be about trade) always do. But no, or not so far.
A brief aside: I don’t think it’s right to call this a case of Washington “dysfunction”. Dysfunction is when we get outcomes nobody wants, or fail to do things everyone wants done, because there doesn’t seem to be any way to package the politics. In this case, however, people who oppose TPP voted down key enabling measures — that is, they got what they wanted. Calling this “dysfunction” presumes that this deal is a good idea — and that kind of presumption is precisely what got successfully challenged yesterday.
Or to put it another way, one way to see this is as the last stand of the Davos Democrats.
Davos Democrats are known as the people who told us to trust unregulated finance and fear invisible bond vigilantes. They just don’t have the credibility to pull off arguments from authority any more. And it doesn’t say much for their perspicacity that they apparently had no idea that the world has changed. TPP’s Democratic supporters thought they could dictate to their party like it’s 1999. They can’t.