Senate Republicans handed President Obama an enormous victory a couple weeks ago when they passed “fast track” Trade Promotion Authority (TPA) for the Trans-Pacific Partnership (TPP) agreement. In leading up to the critical vote last Friday after procedural defeats the week before, Senate Majority Leader Mitch McConnell praised the president and made clear the administration would get fast track authority. He delivered.
But there was a catch: the bill stipulated that it could go to the president for his signature only if the House passed both the TPA and a companion Trade Adjustment Assistance bill (TAA).
Last Friday, House Democrats rebelled against President Obama and failed to pass the trade assistance bill by a dramatic 302-126 vote. Most Democrats, including Minority Leader Nancy Pelosi, bucked the president on the assistance bill because, as she said, “we want a better deal for American workers.”
GOP House leaders promised to bring the trade assistance bill back for a vote this week, noting that the House did approve the Pacific trade pact despite the setback on trade assistance.
Underlying the “fast track” debate is the trade agreement itself, that many opponents have likened to another NAFTA-type job killer. But whatever it is, make no mistake, TPP is not the North American Free Trade Agreement of 1994.
NAFTA did lead to increased trade between Canada, the United States, and Mexico. It more than doubled in 10 years, from $306 billion a year to $621 billion a year. However, NAFTA led to domestic job losses. Economist Robert Scott of the Economic Policy Institute notes that U.S. exports to Mexico increased – but imports increased even more. The year before NAFTA took effect was the last year the U.S. enjoyed a trade surplus with Mexico. Last year, Scott says, the U.S. imported $136 billion of goods from Mexico and exported $107 billion, for a trade deficit of $29 billion.
Indeed, every dollar spent on goods made in Canada or Mexico is a dollar that did not employ a U.S. worker to make the same item. Trade deficits translate into job losses.
What bipartisan proponents including President Obama and Republican leaders must emphasize is this trade pact is crucial to opening the 11 Pacific Rim markets to our goods and services; while giving the president the authority to set the rules.
A May 18 Wall Street Journal editorial puts into perspective how, since NAFTA, better trade deals have benefited our nation: “The U.S. has made trade pacts with 20 markets around the world, and those markets account for 47% of U.S. goods exports, according to the U.S. International Trade Administration. U.S. goods exports to trade-pact countries rose 64% from 2009 to 2014, far more rapidly than the 45% growth with the rest of the world. According to the U.S. Trade representative, exports have spurred one million new U.S. jobs since 2009.”
But skeptics remain. During a May 19 interview with Peter Cook of Bloomberg News, Sen. Elizabeth Warren opposed the TPP by declaring: “We’re being asked to grease the skids for a deal that’s basically done but is being held in secret until after this vote.” But, it is not a secret to members of Congress!
As columnist Ruth Marcus correctly explained, “This is not secrecy for secrecy’s sake; it’s secrecy for the sake of negotiating advantage. Exposing U.S. bargaining positions or the offers of foreign counterparts to public view before the agreement is completed would undermine the outcome.” And as Washington Post editorial writer Jonathan Capehart underscores, “TPP is not secret to Warren. She has read it.”
MSNBC’s Rachel Maddow put the question directly to Warren: “Have you been able to read the deal?” Yes, Warren replied. In fact, every proposal in the deal has been discussed by members of Congress. Members have even offered proposals of their own to the trade representative.
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Clearly, NAFTA has left a bitter taste with many Democrats and Republicans, but this trade deal, like future trade agreements, must be seen with fresh eyes in an increasingly competitive global marketplace. Given those emerging global realities, in addition to the economic benefits, there are political and strategic considerations as to why Congress must move forward with TPA and the TPP.
Politically, Republicans now have the shared responsibility to govern, and this is one of the rare times they and the president are on the same side. The GOP rightly hits Democrats for retreating from world leadership on trade; however, Republicans must contrast this retreat with its will to strengthen the ability of American businesses to compete in emerging global markets.
And then there are the long-term strategic concerns. Japan, for example, is a huge free trade proponent and makes no secret that it welcomes “fast-track” and the TPP to help restore its sluggish economy. A stronger Japan—a key U.S. ally in the Pacific—reinforces one of our best counters to China’s growing desire to diminish U.S. power and influence in the Pacific and to enhance its own expansionism. Given that alone, failure to pass “fast-track” and the Pacific pact is not an option.
Michael Steele is the former Chairman of the RNC and a political analyst at MSNBC.