- By Phil LevyPhil Levy is Senior Fellow on the Global Economy, The Chicago Council on Global Affairs, and teaches strategy at Northwestern University’s Kellogg Schoool of Management.
When we see a well-executed political event, such as a national convention, it is usually a reflection of significant advance work and meticulous planning. Without such advance work, we can get Clint Eastwood talking to a chair.
In the world of U.S. trade agreements, there is a particular need for such advance work. One part of government — the executive branch — attends all the negotiating sessions and conducts the international haggling, while a different part of government — Congress — is constitutionally required to set the policies. In recent decades, the two branches have struck legislative deals, known most recently as trade promotion authority (TPA). This authority reassures trading partners that whatever trade accord the White House ultimately agrees to will get a timely vote in Congress without any amendments. If the two branches of government do not work out a plan in advance, it can get ugly.
And that’s right where we are. In a short news release on Nov. 13, House Ways and Means Committee Chairman Dave Camp (R-Mich.) effectively warned that the president’s trade agenda is in danger. He stated:
The President must do more to make the case about the importance of TPA. He missed a prime opportunity last week to highlight TPA when he spoke in New Orleans about the economic benefits of trade policy. We simply cannot get the high standard, job-creating agreements that we need without TPA.
Barack Obama’s administration has for years decided to pursue an ambitious trade agenda without TPA. In September 2011, amid congressional trade debates that led to passage of agreements with South Korea, Colombia, and Panama, Senate Republicans made a push to grant TPA. Democrats rejected the idea.
Why on earth would Obama not want the authority to negotiate agreements he was already in the midst of negotiating, like the Trans-Pacific Partnership (TPP)? Because TPA is the point at which one moves from vague, idealized support for a trade initiative to the controversial specifics of what that agreement will require. Large fractions of Congress are generically in favor of "a new, improved 21st-century trade agreement." In contrast, any particular set of stances on labor, the environment, and intellectual property rights can be much more controversial. In the fall of 2011, the president’s supporters in the labor movement were already upset about the passage of the Colombia free trade agreement (supported by only 16 percent of Democrats in the House). Why upset them further, heading into the 2012 election season, with a battle over TPA that would inevitably end up favoring a Republican approach?
So the Obama administration consistently argued that TPA was a technicality that could be addressed shortly before Congress took up any completed agreement. That dilatory approach posed a number of difficulties, only some of which were predictable at the time.
The predictable concern was that, as negotiations proceeded, the administration’s specific stance or negotiating approach in trade talks would engender new opposition. That has happened primarily through complaints about a lack of transparency in administration negotiating positions in TPP. The Campaign for America’s Future, for example, describes growing AFL-CIO concern about the TPP and advises that "You can help fight a corporate takeover of democracy by telling Congress you oppose [TPA]."
One of the less predictable costs of delaying a TPA vote has been the emergence of a new "strange bedfellows" group of concerned members of Congress. Whereas Tea Party Republicans strongly supported Obama in the passage of the three free trade agreements in the fall of 2011, relations have been more troubled since then. Whether because of these strains or because of principled opposition, a group of Tea Party representatives has stated its opposition to TPA on the grounds that they oppose the delegation of powers constitutionally granted to Congress. There are counterarguments to these concerns, but when one begins adding clumps of House Republicans to over 150 avowed Democratic opponents of TPA, the numbers get more worrying (the Senate is less of a concern).
The other unforeseen obstacle has been the push to link enforceable currency measures to trade agreements. At a time when there is little bipartisan agreement on anything in Congress, 60 members of the Senate and a majority of the House have signed letters calling for the inclusion of provisions for currency. (See an argument in favor by former Missouri Gov. Matt Blunt here, and my arguments against here.) The idea is sufficiently troubling to the country’s trading partners that it drew a quick rebuke from Canadian Trade Minister Ed Fast. But Canadian opposition may not prove decisive as the Obama administration tries to coax TPA out of Congress.
To date, the administration has done so by engaging in quiet discussions and increasingly urgent musings about how nice it would be to have TPA. This approach has left it to congressional leaders, such as Sen. Max Baucus (D-Mont.) and Chairman Camp, to work out the details of a deal. There have been active efforts to do so — and missed deadlines — at least since June. That’s why it was so notable last week when Camp publicly called for the administration to do more and flagged the currency issue as particularly problematic.
So far, the 11 countries negotiating the Trans-Pacific Partnership with the United States have been willing to accept assurances that U.S. negotiating authority would be forthcoming. As those talks are supposed to be moving into their final stages, however, either the administration needs to figure out how to deliver a belated TPA deal, or it may find itself talking to empty chairs.