Is a Major Trade Deal the Way for Obama to Secure His Legacy?
Last month President Barack Obama addressed his plans for expanding trade before a group of corporate leaders, complaining, “There’s a narrative there that makes for some tough politics.” While businesses must constantly make the case for how trade benefits America’s middle class, the pivotal voice will be President Obama’s. It is imperative that he extols ...
Last month President Barack Obama addressed his plans for expanding trade before a group of corporate leaders, complaining, “There’s a narrative there that makes for some tough politics.” While businesses must constantly make the case for how trade benefits America’s middle class, the pivotal voice will be President Obama’s. It is imperative that he extols the benefits of his trade initiatives in next week’s State of the Union address (SOTU).
The Trans-Pacific Partnership (TPP) in Asia and the Transatlantic Trade and Investment Partnership (TTIP) with the European Union are central to the president’s plan to strengthen the United States’ ties with each region and to propel economic growth in America and globally. Trade momentum could also drive completion of the World Trade Organization’s (WTO) Doha Round.
Our negotiating partners are not going to put their final offer on the table unless they know the president can complete the deal. This requires passing Trade Promotion Authority (TPA), also called “Fast Track,” to allow the president to submit trade bills for an up or down vote without amendments that could kill the deal.
Trade is one of the most likely areas where the president and congressional Republicans can work together. Senate Finance Committee Chairman Orrin Hatch (R-Utah) said in regards to TPA that he wants to “get it done, get it done right, and get it done soon.”
Yet history shows that a president cannot outsource the job of promoting trade to a supportive committee chairman or his capable U.S. trade representative. President Obama must personally actively engage on the issue in order to have any chance for success.
This is trade’s hour. It is Obama’s best chance to act in tandem with Congress. Trade can provide the economic boost necessary to offset the economic headwinds we still face.
In last year’s SOTU address, President Obama devoted a paragraph to trade that was more descriptive than persuasive. The president should devote more than a paragraph to trade in this year’s SOTU — and he needs to be very persuasive.
If he takes the initiative, President Obama can join a long list of Democratic presidents that have spent political capital to support advances in trade.
Grover Cleveland called on Congress in 1885 to reduce high protective tariffs. Told that he had given Republicans an effective issue for the campaign of 1888, he retorted, “What is the use of being elected or re-elected unless you stand for something?” He did lose in 1888, but came back four years later.
Woodrow Wilson called a special session in 1913, addressing Congress personally for the first time since President John Adams, to consider tariff reform. The Underwood-Simmons Act achieved the most significant reductions in rates since the Civil War.
Franklin D. Roosevelt secured passage of the predecessor of TPA in 1934 and concluded 19 trade agreements.
Harry Truman led the effort to launch the General Agreement on Trade (GATT) in 1947, the predecessor of today’s WTO, fighting opposition by a Republican Congress. He approved the first three rounds of global trade agreements under GATT, substantially reducing trade barriers.
John F. Kennedy in 1962, asserting, “Economic isolation and political leadership are wholly incompatible” approved the GATT Dillon Round that President Jimmy Carter described as “one of the most highly publicized and well-known achievements of the Kennedy administration.” The GATT’s subsequent Kennedy Round was named in his honor.
Lyndon Johnson affirmed during his 1964 inaugural address, “For our ultimate goal is a world … in which all men, goods, and ideas can freely move across every border and every boundary…. We must expand world trade. We are willing to give our trading partners competitive access to our market, asking only that they do the same for us.” The GATT’s Kennedy Round was approved during his administration.
Jimmy Carter signed in 1979 the agreement implementing the GATT Tokyo Round that he described as “perhaps the most important and far-reaching piece of trade legislation in the history of the United States.”
Bill Clinton signed the North American Free Trade Agreement in 1993. He made it “a make-or-break issue for his presidency” and “rounded up former presidents, secretaries of state and even former chairmen of the Joint Chiefs of Staff to support the agreement.” The GATT Uruguay Round of global trade negotiations was approved during his tenure and the GATT was reenergized as the WTO.
The Obama administration has passed three bi-lateral trade agreements that were negotiated by the administration of President George W. Bush.
Completing TPA, TPP, TTIP, and the Doha Round (or some combination of them) would give Obama major trade accomplishments that he could truly own. Unless he wants to stand out as the only Democratic president in modern times not to break down trade barriers, President Obama needs to step forward to make clear how trade spurs economic growth, expands jobs, and raises the incomes of the middle class.
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