With the politicians’ war of words and dueling TV ads, you might think that any day now, President Barack Obama was going to sign a massive Pacific trade deal that would put millions of people out of work, or bring happy days to the U.S. economy, depending whom you believe.
In reality, no final decision is imminent on the Trans-Pacific Partnership — what would be the largest free trade pact in U.S. history. Like most trade agreements, its impact would be mixed, with winners and losers.
Until its major provisions are clear, we can’t judge whether it would be a good deal. But Congress should allow the administration to proceed to the final negotiations by granting fast-track authority — the issue that is before lawmakers now.
While fellow Democrats are right to push Obama for more aid for displaced workers at home and more protections for labor and the environment abroad, those priorities don’t have to be deal killers. For his part, Obama must be more open about what’s in the agreement; the secrecy shrouding the negotiations fans critics’ concerns about food safety and corporate influence.
If done right, however, this deal could shape U.S. trade policy for the 21st century and and boost California’s economy.
The state’s $174 billion in exports last year led the nation, and California also leads the states in exports to Asia. Three of California’s top four export markets — Mexico, Canada and Japan — are part of the 12-nation TPP, whose members account for more than 40% of the state’s total exports.
The pact could open more markets in areas of strength, including agriculture and technology. The deal could add reasonable protections for intellectual property, another sector where California excels.
Overall, the U.S. does more than $1.6 trillion a year in trade with the other 11 TPP countries. While we have limited free trade agreements with six countries, we don’t with Japan, our largest trading partner without one, or with fast-growing Malaysia and Vietnam. With the region driving the global economy, Obama sees this deal as part of his strategic “pivot” to Asia to counterbalance China.
Congress has a two-part decision on TPP. First, it is to vote on whether to grant Obama fast-track authority to negotiate the agreement. If it does, Congress will get to vote up or down on the final accord, but won’t be allowed to amend it.
Presidents had trade promotion authority on other major trade deals, and for good reason. Other countries are not going to sign if Congress can change key provisions after the fact.
In some ways, this repeats the 1993 battle over the North American Free Trade Agreement. Business and there remains strong debate whether that deal has been a net plus for America.
Citing NAFTA, many Democrats are opposing Obama, so he is relying on Republican support. On May 12, Senate Democrats blocked a vote on the fast-track bill. It took some major arm-twisting to get the legislation back on track for a vote as soon as this week, with a compromise that allowed Senate passage of bills to crack down on currency manipulation and to extend trade preferences to developing countries in Africa.
This issue has divided California Democrats. Sen. Dianne Feinstein voted for fast-track May 14 after pushing the compromise. Sen. Barbara Boxer voted no, and warns that another major trade deal could not come at a worse time for middle-class families.
Like it or not, globalization is here. The question is how America can steer it in ways that boost our economy. The Trans-Pacific Partnership is a significant opportunity to do that. There’s every reason to see what the negotiations produce before a final verdict.