Withstanding intense pressure from anti-trade “progressives” — an oxymoron if ever there was one — Sen. Ron Wyden, D-Oregon, has struck a deal with Congressional Republicans to move a bipartisan trade promotion authority bill.
Wyden’s display of grit is good news for the cooling U.S. economy, which needs a lift from export-led growth; for American workers, who need the jobs and rising pay that come with rising exports and stronger growth; and for President Barack Obama, who needs the authority to complete negotiations over three major trade pacts and get them through Congress.
Wyden is a staunch liberal, but one with an independent streak who’d rather solve problems than strike poses. But committing acts of political leadership is dangerous in Washington these days, and Wyden can expect more abuse from “populists” within his own party. That’s a shame, because the Oregon Democrat has actually moved trade promotion authority (TPA) in a more progressive direction.
For example, Wyden preserved the Trade Adjustment Assistance program, which retrains workers who lose their jobs due to trade. House Ways and Means Committee Chairman Paul Ryan, R-Wisconsin — who earlier this week sought to spare the richest families in America from the indignity of paying inheritance taxes — reportedly wants to cut public help for displaced workers.
Wyden also held out for changes in the bill’s “fast track” procedure that would give lawmakers greater assurance they won’t be steamrolled by the White House. These changes would enable them to offer amendments to the trade pacts if key committees decide that the administration failed to consult Congress adequately or meet TPA’s key negotiating goals.
More generally, the new TPA updates those objectives to reflect changes in the global economy since trade authority lapsed back in 2007. It includes measures to deal with currency manipulation, to lower barriers to innovation, and to extend trade-promoting principles and rules to fast-growing digital trade — a sector in which the United States enjoys immense comparative advantages. And it instructs U.S. negotiators to ensure that new agreements include the progressive labor and environmental standards that Democrats incorporated in recent trade agreements, and requires that these standards be embedded in the main body of the agreements and be fully enforceable under their rules.
Renewing TPA will enable President Obama to finish negotiations on the Trans-Pacific Partnership (TPP) agreement with 12 Pacific Rim countries in Asia and the Americas. Not only is TPP the most ambitious trade pact Washington has yet undertaken, but it’s also the economic linchpin of Obama’s plan to “rebalance” U.S. foreign policy toward the Pacific.
Yet the left wing of his own party seems determined to kill TPP. They blame trade for exporting U.S. manufacturing jobs and depressing U.S. wages. Few economists accept such a one-sided and relentlessly bleak view of trade’s costs and benefits, but no matter — many liberals are still fighting the last war, specifically, the battle of NAFTA 21 years ago. The idea that NAFTA was a catastrophe for U.S. workers has hardened into an urban legend, despite the years of robust growth and job creation that followed its passage in 1994.
It’s also disheartening that liberals so mistrust Obama. After all, he’s hardly a mindless cheerleader for free trade. During the 2008 presidential campaign, he made ritual bows at the anti-NAFTA shrine — much to the consternation of Canada, America’s biggest trading partner.
But Obama is nothing if not a realist, and he recognizes that globalization is here to stay, and that America cannot prosper in splendid isolation. Rather than railing ineffectually against trade, he’s urged Democrats to view trade agreements as opportunities to ensure fair treatment for U.S. companies and workers, and to advance progressive goals like human rights, labor rights and environmental protection. He took that approach in winning Congressional approval for bilateral trade pacts with South Korea and Columbia in 2011.
What do anti-trade-deal liberals like Sens. Bernie Sanders, I-Vermont, and Elizabeth Warren, D-Massachusetts, hope to accomplish by opposing Obama’s trade agenda? Killing TPP won’t keep America from trading more with the world’s fastest-growing economies. Instead, it will simply mean that trade will proceed with fewer and less progressive rules — or worse, under rules imposed by the region’s economic powerhouse: China. Will Beijing be more concerned about U.S. workers than Washington?
Moreover, as Rep. Ron Kind, D-Wisconsin, leader of the House New Democrats, points out, depriving Obama of trade negotiating authority strengthens the hand of congressional Republicans. Without a fast-track bill that requires an up-or-down vote, the GOP majority could push amendments aimed at stripping trade pacts of their most progressive provisions.
The Democratic rift on trade, meanwhile, puts Hillary Clinton in a tough spot. As Obama’s secretary of state, she endorsed TPP. And her husband, of course, won approval of NAFTA and a host of other trade liberalizing agreements. If she sides with Obama and TPA, however, the drumbeat for getting Warren or some other populist challenger into the presidential race will grow louder.
On the other hand, every Democratic president in the last century has taken the position that opening world markets is a win-win proposition for the United States and other countries. Trade is an issue that pits the national interest against parochial ones, however worthy they may be. Those aspiring to be president should stand up for the national interest — and now, when it really counts.
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