Analysis: Why Everyone Is Fighting So Hard Over The Pacific Rim Trade Deal
By Don Lee, Tribune Washington Bureau (TNS)
WASHINGTON — The long, acrimonious legislative battle that gave President Barack Obama the power needed to complete trade agreements reflects both the steady march of globalization and also the nation’s deep ambivalence about the consequences of America’s widening economic engagement with the world.
With Wednesday’s 60-38 Senate vote to pass legislation on trade-promotion authority, or fast track, the Obama administration can turn to finishing negotiations on the Trans-Pacific Partnership, a legacy-making deal for the president that would join the markets of 12 Pacific Rim nations accounting for 40 percent of the global economy.
Tough issues involving sensitive farm and dairy products have to be resolved, and negotiators must also finalize rules and standards on intellectual property, labor, environment and other areas related to trade and investment. Organized labor and other groups that fought against fast track vowed not to let up in their campaign to block what they see as another trade deal that will destroy American jobs and depress wages.
And it will likely be year-end at the earliest before Congress has a final say on the accord. Lawmakers will not be allowed to amend the pact and it’s by no means certain they will approve it.
“I do not believe the vote on TPP will be easy,” said Susan Schwab, a former U.S. trade representative in the George W. Bush administration, of the Trans-Pacific Partnership. “That will be the next battle.”
History, though, is on Obama’s side: Every U.S. trade agreement presented to Congress by a president after winning fast track has eventually passed. In that sense, the Pacific deal, while the biggest yet attempted, is only the latest in a decades-long revolution set off by sweeping changes in technology, communications and transportation as well as economic policy all around the world _ changes that seem to go well beyond the power of any single government, political party or interest group to control.
“The reality is, in 2015, globalization is a fact of life,” said Sen. Ron Wyden, D-Ore., a pivotal figure in swaying enough Democrats to support fast track, a measure that limits Congress to a simple yes-or-no vote on completed trade agreements.
Certainly the benefits of globalization are clear: “We have $10 T-shirts, $12,000 basic cars and $500 computers,” noted Robert Shapiro, a top economic adviser to President Bill Clinton, who pushed through the North American Free Trade Agreement in 1993. “None of that would have been possible without globalization.”
But the costs are also clear: Hundreds of thousands of manufacturing and other jobs have moved overseas to countries where workers are paid less, have fewer benefits and enjoy a lower standard of living than the American workers who once held those jobs.
Nor have the costs been confined to industrial workers. Many white-collar jobs in law, medicine and accounting, to name a few, are also moving overseas as global education rates improve and the leveling influence of technology intensifies. So when free-traders claim everyone has benefited from globalization, a growing chorus of trade critics says, “Not so fast.”
There’s evidence, for example, that China’s rise in the world trading system over the last two decades has had a significant effect on American jobs. Researchers at the Massachusetts Institute of Technology and other institutions estimate that soaring import competition from China has resulted in a net loss of more than 2 million domestic jobs from 1999 to 2011. Other economists say offshoring, or the moving of U.S. factories and jobs to other countries, also has contributed to broader wage declines for American workers.
Lingering frustration from the Great Recession, which has left many U.S. workers struggling, has raised those stakes even higher, spurring Democratic lawmakers to challenge their party’s own president over the trade deal. Obama had just enough Senate Democrats in his corner to get to Wednesday’s vote, which came only after an initial rebuffing of the fast-track package by House Democrats earlier this month.
The intensity of the fight reflects an understanding that the Pacific trade deal, more than any other by virtue of its size and scope, will serve as a model for years to come. The Trans-Pacific Partnership includes Japan, Canada, Mexico and Vietnam, but officials see China, the Philippines and others potentially joining the U.S.-forged accord some day.
“Everybody sees the stakes being very high because the TPP is designed to be infinitely expandable,” said Thea Lee, the AFL-CIO’s deputy chief of staff. She acknowledged, however, that the odds are against those opposing the deal, noting that “once fast track is given, there’s no incentive to change course on TPP itself.”
Both Obama and his trade critics, including populist Sen. Elizabeth Warren, D-Mass., and presidential candidates Bernie Sanders, I-Vt., and to a lesser degree presidential front-runner Hillary Rodham Clinton, insist that protecting Americans workers is their top priority. To soften the hit for workers, many Democrats want Congress to extend federal retraining aid for those hurt by intensified foreign competition. Funding for that program, which economists consider inadequate, was initially tied to fast track but is now expected to face a separate vote later this week.
But beyond that, Democrats hold vastly different perspectives on the Pacific trade deal. Obama and many others argue that it was imperative for the U.S. to chart the path of global trade rather than follow China or anybody else.
“The rest of the world is still waiting for the U.S. to show global leadership on trade, and it won’t be able to lead globally unless it succeeds regionally” with the Pacific Rim deal, said James Bacchus, a former Democratic House member from Florida and onetime chairman of the World Trade Organization’s appellate body.
Yet many others have deep reservations about some of the proposed contents of the Trans-Pacific Partnership, which have been seen by lawmakers or leaked out from the secret talks.
As long ago as 1999 in Seattle, massive protests against globalization were mounted at a meeting of the World Trade Organization. The influence of the protests was marginal at best; the next year China joined the WTO.
Union leaders, consumer groups and others opposed to the Pacific deal are hoping for more lasting results this time. Once negotiations are completed, the fast-track legislation calls for the final trade package to be made public for 60 days before the president signs it and delivers it to Capitol Hill for a vote.
Whatever the outcome, “the United States is not withdrawing from globalization,” said Shapiro, the Clinton administration economist. “Globalization is simply becoming more universal, broader. You don’t really have an option to say no anymore. The option is, how do you get the largest number of your people to prosper through it?”
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