Shadow Government

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Hillary Clinton’s Three Options for Handling the TPP if She Becomes President

Now that Clinton has come out against the trade deal, what could she do about it if she's elected?

GettyImages-491441420_960
GettyImages-491441420_960

My colleague Peter Feaver’s insightful take on Hillary Clinton’s turn against the Trans-Pacific Partnership (TPP) captured both the contrast with her approach to the Iran deal, and the question of what the Asian Pivot would be without the TPP. But to add to his analysis, I would extend the following thought experiment: What would Clinton do about the TPP if she were elected to be the United States' next president?

According to recent statements, she is not opposed to all trade deals, but believes we need something better than what President Obama has been able to deliver. This is strikingly reminiscent of then-Senator Obama’s stance in 2008, when he opposed the Colombia, Korea, and Panama free trade agreements completed under President George W. Bush and said they needed renegotiation. As it happened, those renegotiations ended up being so minor that they did not even require renewed trade negotiating authority or new analyses from the U.S. International Trade Commission. Passage, though, only came three years later, in the fall of 2011.

In our thought experiment, consider Secretary Clinton’s position on Nov. 9, 2016, were she to win the election. What would be the right time to take up those TPP renegotiations? Here are three options she would face:

My colleague Peter Feaver’s insightful take on Hillary Clinton’s turn against the Trans-Pacific Partnership (TPP) captured both the contrast with her approach to the Iran deal, and the question of what the Asian Pivot would be without the TPP. But to add to his analysis, I would extend the following thought experiment: What would Clinton do about the TPP if she were elected to be the United States’ next president?

According to recent statements, she is not opposed to all trade deals, but believes we need something better than what President Obama has been able to deliver. This is strikingly reminiscent of then-Senator Obama’s stance in 2008, when he opposed the Colombia, Korea, and Panama free trade agreements completed under President George W. Bush and said they needed renegotiation. As it happened, those renegotiations ended up being so minor that they did not even require renewed trade negotiating authority or new analyses from the U.S. International Trade Commission. Passage, though, only came three years later, in the fall of 2011.

In our thought experiment, consider Secretary Clinton’s position on Nov. 9, 2016, were she to win the election. What would be the right time to take up those TPP renegotiations? Here are three options she would face:

1. Wave TPP through unchanged in the lame duck. That parallels what many thought President Obama would do with Colombia, Panama, and Korea. They were wrong. Some have argued that the present situation is different, because the House was then under the speakership of trade critic Nancy Pelosi. and now there’s a pro-trade Republican majority (and, presumably by then, a new Republican speaker).

The lame duck scenario seems problematic. First, there would be no time for renegotiation, and passing the TPP unchanged in the lame duck would look like be politically tough, if she had just been elected on an anti-TPP platform. Second, there is never as much time to pass legislation in the lame duck as people think (or, rather, there are too many issues that legislators would like to put off for an apolitical interlude). Third, President Obama has not really crafted the TPP in a way to guarantee Republican support (more on this another day). Fourth, in the wake of a Clinton victory, there would be a very angry and resentful Republican Congress that would not be eager to do her any favors.

(A brief digression: I highly recommend the late David Halberstam’s book The Coldest Winter. One tangential story he tells is of the presidential election of 1948, with the famously incorrect “Dewey Defeats Truman” headline. He reminds that this was not just a surprise victory, but it extended Democratic control over the White House from 16 to 20 years. The shock did not lead to a cooperative Republican congress. In fact, Halberstam links it to the ensuing sharp attacks on Truman foreign policy that followed, including the “who lost China?” debate. Anyway, read the book.)

2. Take TPP on early in a new Clinton administration. Clinton has spent a great deal of time in Washington and would know that she would have perhaps 18 months to advance the issues that are really important to her. How much would she want to make a big divisive trade fight part of that early agenda?

3. Get around to it later. That’s what President Obama ultimately did. The growing political toxicity of trade meant that he only took up the Colombia agreement in fall 2011 under strong pressure. Even then, he was unwilling to accept TPA from Senate Republicans when they offered. It would have been too divisive; the political timing wasn’t right.

That’s the danger with leaving the growing Democratic economic isolationism unchallenged. Some pro-trade, internationalist branches of the party may think this is a necessary and temporary accommodation of their political partners. But U.S. involvement in the TPP started in fall 2008. If Clinton adopts the same three-year delay that President Obama did on Colombia, Panama, and Korea, that would mean wrapping it up in 2019. Would any of our TPP partners still be waiting for us then?

Darren McCollester/Getty Images

Phil Levy is the chief economist at Flexport and a former senior economist for trade on the Council of Economic Advisers in the George W. Bush administration. Twitter: @philipilevy

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