As Unusual Allies Come Together on Trade, Debate Over Sweeping Measure Heats Up

On April 29, Japanese Prime Minister Shinzo Abe addressed a joint session of Congress in an appeal for a Pacific trade deal. If enacted, it would be the largest trade deal in U.S. history.  Negotiators have been quietly working on the 12-nation Trans-Pacific Partnership “TPP” for over five years.  But the Prime Minister’s visit has brought the issue to the fore – and with it tensions over a sweeping trade package that broadly affects every sector of the U.S. economy, including agriculture, energy and consumer goods as well as the financial industry and U.S. labor. 

 

Trans-Pacific Partnership Is Huge Deal But Is Mostly Cloaked in Secrecy

The United States currently exports $1.9 billion in goods to TPP countries each day and in 2013, the United States exported an astonishing $622.5 billion worth of goods to TPP countries. The administration argues that without TPP, U.S. businesses will be left out of potential partnerships and trade in the Asia-Pacific. 

Prime Minister Abe stated that “the TPP covers an area that accounts for 40 percent of the world economy and one-third of global trade.”  The deal, Abe noted, is crucial in building “a market that is fair, dynamic, [and] sustainable.”  In a country with a rapidly aging farmer population, Abe has pledged to end its high tariffs on agricultural imports, which provide an estimated 45 percent of total income to Japanese farmers.

But not everyone is in agreement over the deal, or even knows what’s in it. Several members of Congress continue to call for TPP negotiation language to be publicly available, accusing the administration that TPP negotiations has been conducted largely in secret, with Congress and senior aides only recently being privy to the text of TPP. In an April 25 letter, Senators Brown (D-OH) and Warren (D-MA) requested that the administration declassify the negotiating text of the TPP. Even now, the language is held in the basement of the Capitol, with lawmakers barred from making copies, notes or photographs of the text or discuss it with the general public.  

According to Senators Brown and Warren, “executives of the country’s biggest corporations and their lobbyists have already had significant opportunities not only to read it but to shape its terms … Many of the [trade negotiating] advisory committees – including those on chemicals and pharmaceuticals, textiles and clothing, and services and finance – are made up entirely of industry representatives.”

 

Before U.S. Inks Deal on TPP, Congress Needs to Reauthorize TPA

But further complicating the trade issue is the President’s expired Trade Promotion Authority “TPA” or “fast track.”  Before TPP can be passed, this common trade tool must be reauthorized.  Instead of allowing Congress to negotiate trade deals, “fast track” gives Congress a simple yes/no vote for trade authorization.  Currently, both TPA reauthorization and TPP has the backing of the Republican majority, but only 11 House Democrats have signed on to a letter promoting the President’s trade authority.  It is estimated that he will need support of 50 House Democrats.  With Democrats divided on TPA, the debate may also shape the 2016 Presidential race.

Proponents say “fast track” is an accepted mechanism of trade, and provides needed certainty to help trading partners put forth their best deals during negotiations.  Senators Hatch (R-UT) and Wyden (D-OR) introduced a bipartisan trade authorization bill (S.995) on April 22, with Hatch arguing that, “there is only one legislative tool with a proven track record: Trade Promotion Authority.  For decades … TPA has been a cornerstone of U.S. trade policy.”  

In a floor speech, Hatch argued that TPA is a “compact between the Senate, House and the Administration,” and that TPA won’t be used to railroad Congress into passing trade deals, but instead, under TPA “the Administration agrees to pursue objectives specified by Congress and consult with Congress as it negotiates trade agreements.”

Over a period of months, Wyden (D-OR) and Hatch (R-UT) negotiated 150 provisions in the Senate bill that somewhat address issues surrounding TPA transparency.  The terms include some barriers on agriculture exports, intellectual property protections, human rights and environmental standards.  Additionally, it increases Congress’s ability to intervene in case key negotiation aspects are not met.  On April 16, the Senate Finance Committee approved S.995.

In the Senate, Senators Warren (D-MA) and Brown (D-OH) are leading the charge against TPA.  Detractors, particularly labor unions and environmentalists, maintain “fast track” strips Congress of the power to oversee the trade process and will erode worker and environmental protections. Rep. Sander Levin (D-MI), the ranking member of House Ways and Means, remains skeptical as well, arguing that the bill as-is doesn’t address currency manipulation or U.S. auto manufacturers’ access to Asian markets.  However, a companion bill to S.995 passed through House Ways and Means on April 24.

 

Who’s For It, Who’s Against It?

In general, the financial sectors, big businesses – including agriculture, energy, and consumer products – are for TPP.  They argue that with 96 percent of consumers outside the United States, and a growing middle class in Asia, not only is TPP necessary for bringing U.S. manufactured goods and commodities to this growing region, it will grow the domestic economy. 

According to the U.S. Chamber of Commerce, the 20 nations that the United States currently trades with represents only 6 percent of global population, but purchase half of U.S. exports. Without TPP, they argue, the U.S. and our large amount of tradable goods are locked out of a huge segment of the world market, disadvantaging businesses and economic growth.

Labor unions, environmentalists and smaller agricultural producers are generally against TPP.  They argue that labor and currency manipulation concerns have not been adequately addressed, and that these tactics move manufacturing overseas to countries with cheaper labor and more lax regulation.  Environmental groups feel that TPA allows foreign countries to skirt or outright break environmental regulations set by the U.S. Congress or individual states, including provisions for GMO labelling laws, air and water quality rules, among others.

Many smaller producers are against TPP, feeling that it only benefits big agri-business.  The National Farmers Union, which represents family farmers, argues that expanding trade promotion in the United States would only continue to add to trade deficits, slowing the economy and privileging imported agricultural products to those grown domestically.

Certainly, the trade debate will only deepen.  According to Senator Brown (D-OH), “There’s not been a T.P.A. considered seriously by the House and Senate for 12 years, so this is something we take seriously.”

 

 

 

For more information see: 

Trans-Pacific Partnership: Summary of U.S. Objectives, Office of the U.S. Trade Representative 

Japanese leader says trade deal 'near,' pledges farm policy reform, Agri-Pulse

Hatch Says TPA Strengthens Congressional Role in Trade Agreements, Sen. Hatch

Lawmakers strike deal on fast track trade bill, Politico 

White House Pushes For Fast-Track Trade Authority, NPR

Deal Reached on Fast-Track Authority for Obama on Trade Accord, The New York Times

House panel passes fast track trade bill, Reuters 

Lawmakers pass up chance to read ‘secret’ trade text, The Hill 

Congressional Panels Approve Fast Track for Trade Deal, With Conditions, The New York Times

Testimony of Roger Johnson, President of NFU