For the past two and a half years, this column has been arguing that the fate of the Trans Pacific Partnership (TPP) deal will hinge on whether US President Barack Obama can win Trade Promotion Authority (TPA) from Congress. This so called ‘fast track’ authority would enable the TPP to be subjected to a straight ‘yes’ or ‘no’ vote in Congress, and without the deal being liable to a clause by clause rewrite. Countries like Japan are waiting to see if Obama can win TPA before expending their political capital at home on a deal that might otherwise get pulled apart by US politicians on the floor of Congress, for all kinds of partisan reasons.
Last week, the White House finally, finally unveiled a draft TPA Bill, and battle has commenced to see if Obama can get the numbers he needs to pass it. He needs a large number of Republicans – who usually oppose conceding anything to Obama – and a sizeable number of Democrats – most of whom oppose the TPP – to get the TPA Bill across the line.
To complicate matters further, there is a related Bill called the Trade Adjustment Assistance Bill (TAA) which funds the retraining of workers displaced by trade pacts. Normally, TPA and TAA are considered jointly, mainly because Democrats regard TAA as an essential safety net for workers whose jobs are destroyed or changed substantially by free trade and the foreign outsourcing that commonly comes ion its wake.
Clearly, if the Bills were joined, more Democrats would feel OK about supporting the TPA. However this time, they’ve been split in order to enable more Republicans to vote ‘yes’ for TPA and ‘no’ for TAA. That ruse tells you all you need to know about the White House tactics. It will raise the heat of opposition from the left wing / organized labour wing of the Democratic Party which on this issue (as on so many other issues of late) is being led by the Massachusetts senator, Elizabeth Warren.
Broadly speaking, the fight over TPA will be between mainstream Republicans and Democrats on one side, and a group of leftish Democrats and Tea Party Republicans on the other. Not surprisingly, the Tea Partiers are opposed to giving Obama the power to limit the ability of Congress to scrutinise any future trade deals entered into by the United States.
How do the numbers look at the moment? The Politico website breaks it down like this: once the TPA clears certain Congressional panel votes, it goes to the Senate where the Republicans control 54 votes. Almost all of them will support TPA. This would mean that perhaps only six Democrats will be needed to get the TPA Bill passed, and enable an over-ride of any filibuster that Warren attempts to lead. As Politico points out, the more of a majority Obama wins in the Senate, the easier the job will be of convincing Democrats in the House of Representatives to come aboard. It will be tight in the House, though:
Republican leaders in that chamber are downplaying suggestions as many as 60 of their 244 members could vote against TPA, which would require 34 Democratic votes to squeak out a narrow majority. However, some Republicans are expected to oppose the measure, requiring an assist from Democrats to put it over the top.
Estimates of potential Democratic yes votes range from as low as 10 to as high as 50, with proponents hoping for the largest bipartisan vote possible. Key to the outcome are 17 Democrats who voted for free trade agreements with Colombia, South Korea and Panama in 2011 as well as 25 more that voted for two of the pacts.
If Obama does ultimately win the TPA fight, this will have a domino effect on the TPP negotiations, since Japan has made it clear – in the nicest diplomatic language – that it won’t be budging on farm trade unless the US can demonstrate it has TPA, and unless it drops the current US tariff on Japanese car imports.
The two most important unresolved issues in the TPP negotiations are Japan’s insistence on maintaining some protection for its farmers, who say agricultural imports harm them, and its insistence on a rapid phase-out of the United States’ 2.5 percent imported car tariff. The tariff costs Honda, Toyota and other Japanese automakers $1 billion per year….. Japan has no tariff on car imports.
If Obama does win TPA, the way will finally be clear for him to conclude both the TPP and the trans-Atlantic TTIP deals. That would be a legacy achievement for his Presidency on a scale comparable to his healthcare package. Ironically though, any such legacy on trade will have been won almost entirely (a) via Republican support, (b) against the wishes of the majority of his own party, and by (c) totally alienating the activist base of the Democratic Party in the labour and environmental movements. If Hillary Clinton happens to lose her presidential bid next year, she will be able to quite validly blame the TPP for much of her loss, thanks to the damaged, divided state in which Barack Obama will have left the Democratic Party, in the course of pursuing his free trade agenda.
Out in Middle America, the battle lines are also being drawn up for the TPA fight. Here’s the Ohio Country Journal last week:
National Farmers Union (NFU) President Roger Johnson…. called the introduction of the TPA bill a one way ticket to bigger trade deficits, more lost jobs and more economic devastation to America’s family farmers and ranchers.
“TPA is just the continuation of the same old thing, trade agreements that make huge promises of prosperity and jobs to the American public and deliver nothing but bigger deficits, exported jobs and lost domestic agricultural sales,” said Johnson, whose organization has long opposed TPA. “Any trade deal that the United States signs should ensure that it will reduce our trade deficit, protect American workers and forbid trading partners from dancing around the negotiated rules and manipulating their currencies to gain an unfair advantage over us.”
And here’s Republican senator Johnny Isakson from Georgia, on the Athens Online site, expressing his support for Obama on this issue:
Because trade negotiations are so complex and detailed, the system works better when the executive branch negotiates such agreements under terms set by Congress, and Congress can either approve or not, but can’t filibuster or amend the agreements, Isakson said. Giving the President that authority “is the right thing for America,” he told his [University of Georgia] audience….
When it comes to the TPA – and further downstream, the TPP – the grassroots lobbying battle has just begun in earnest.
Footnote : :Last week, the Washington Post published a devastating attack on the shonky research that the Obama administration has used when calculating the alleged benefits from the TPP. The WP completely takes apart the White House claims of more jobs and enhanced economic benefits from the TPP deal, and awards it Four Pinocchios for lying. Interestingly, the arguments used by the Washington Post are very, very similar to those used by Geoff Bertram of Victoria University in his debunking of the TPP’s claimed economic benefits. Bertram’s findings were reported in this column 15 months ago.