- 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.
The president faces an enormous challenge on trade. He has built much of his Asian foreign policy around the Trans-Pacific Partnership (TPP) and much of his European foreign policy around the Transatlantic Trade and Investment Partnership (TTIP). In each case, he did so on the promise to our international partners — explicit or implicit — that he would sooner or later bring Congress around.
It is now later. The TPP was nominally to conclude last year. Other countries’ trade ministers have stated their desire to see it wrap up as soon as possible. They are waiting on White House efforts to win a negotiating mandate from Congress (known as TPA). While such a measure has met some Republican opposition, the most serious challenge has come from Democrats, particularly in the House. The Senate looked safer, at least before the president sent the bill’s key Democratic backer, Finance Committee Chairman Max Baucus (D-MT), off to Beijing.
In the House, members of the president’s party have voiced skepticism about what trade deals do. They believe those deals cost jobs, damage the environment, and harm workers. A key part of the president’s task in his State of the Union address was to speak to these members of his party and their constituents watching at home. He had to persuade them that, while he had once espoused such positions and empathized, the critics were mistaken. Instead, here was the sum total of the president’s pitch:
"…when 98 percent of our exporters are small businesses, new trade partnerships with Europe and the Asia-Pacific will help them create even more jobs. We need to work together on tools like bipartisan trade promotion authority to protect our workers, protect our environment and open new markets to new goods stamped ‘Made in the USA.’"
Even had the president made this statement at the beginning of last summer, when discussions were just starting up on the TPA, it would have been cursory. Few people are persuaded by the bare assertion that their strong beliefs are false and the opposite is true. Usually, to change minds, some supporting detail is required, some evidence, or a carefully structured argument. Weak mercantilist claims are easily rejected by skeptics (e.g. if trade is good because exports bring jobs, what does it mean when we run a trade deficit and imports exceed exports?).
Not only did the president fail to make much of a sales pitch, but his vague call to ‘work together’ comes at a time when a bipartisan bill has been crafted and the battle lines are drawn. By not mentioning the bill, nor taking a stance on the controversial facets under debate — currency provisions, intellectual property protection clauses, trade adjustment assistance — the White House remains on the sidelines, hoping that TPA will simply fall into its lap without much expenditure of effort or political capital.
Success on the trade front was going to require experienced leadership in the Congress and a concerted public and private persuasion campaign from the President. Instead, the last month has brought the removal of an irreplaceable Capitol Hill proponent and noncommittal nods from the White House. This does not bode well.