We free traders have seen international trade as a debacle for decades. We really, really want to end the senseless protectionism and endless complication of international trade. Giving the President Fast Track Authority is too high a price to pay to end it.
House Leadership will try again Tuesday to pass the trade package.
WH says Pres Obama to confer today with @SpeakerBoehner about getting trade bill passed. WH Chief of Staff spoke with Pelosi & McConnell.
— Mark Knoller (@markknoller) June 15, 2015
Headlines blared that Democrats killed President Obama’s trade deal, by refusing to go along with a giveaway to trade unions. Via Breitbart:
To secure final passage through Congress of a package that would include TPA fast-track authority—which would ensure finalization of the secretive Trans Pacific Partnership (TPP), Transatlantic Trade and Investment Partnership (T-TIP) and Trade in Services Agreement (TiSA), among other deals—the House would need to pass the Trade Adjustment Assistance (TAA) package that was necessary for Senate passage of TPA. The House voted TAA down 302-126 with widespread bipartisan opposition to last week, but House Ways and Means Committee chairman [mc_name name=’Rep. Paul Ryan (R-WI)’ chamber=’house’ mcid=’R000570′ ] (R-WI)
and his allies in House GOP leadership have pledged that they will try to pass it again early next week. The vote would potentially be on Monday, but more likely on Tuesday—and if there is no vote by Tuesday, it’s unlikely that Ryan will be able to succeed in his ploy to revive TPA.
Terming TPP “secretive” aside, that’s a decent summary.
- TAA: Trade Adjustment Assistance Gives companies (and unions) affected negatively by free trade agreements a bailout.
- TPA: Trade Promotion Authority – Makes it harder for Congress to vote down trade agreements because of riders they don’t like, and to add riders of their own. Would tend to make trade agreements easier to pass.
- TPP: Trans Pacific Partnership- While not public, it would probably lower international trade tariffs, but add rules for signatories to follow.
- Implementing legislation: must be passed before trade agreements like TPP do anything.
TAA was to be funded with cuts to Medicare. Democrats shied away from that, because they didn’t want to vote for Medicare cuts. They were also wary of the TPP. The sausage grinder is getting clogged as House Leadership tries everything to get this deal passed.
Scott Lincicomme, my long-time hero on trade issues, wrote of The Top Nine Myths About Trade Promotion Authority And The Trans-Pacific Partnership.
Lincicomme implies, by combating arguments against TPA and TPP couched in simpleton’s terms, that all opposition to TPA and TPP is rooted in ignorance. If you want people to support you, don’t sully your message to them with ridicule.
Yet, without taking time to answer all his points, why is the constitutionality of a measure a point in its favor? Lots of things are constitutional, but bad policy.
Granting the president — any president — further power is a bad idea, even if Congressional checks are retained. We already have too much power in the Executive Branch. There is a heavy burden on those who want to add more.
The problem with TPA is giving the Executive Branch more power to design trade agreements. These agreements will be easier to get past Congress. As a result, administrations will lard them up with their favorite gimmicks, whether it’s agreements on Climate Change, military base closures, or tuna fishery protection. These will be inserted by the executive team to favor its allies in Congress to get their agreement on the package.
Adding a TAA bailout for companies hurt by freer trade is anathema to free traders. It’s incorrect to say that American jobs will not be lost by making it easier for foreigners to sell us things. The resulting prosperity, though, should create new and better opportunities for Americans if it’s allowed to do that. Meanwhile, TAA would put American companies on welfare, so that they won’t get the economic signal that they need to change to meet their new global competition.
The idea that being forced to issue implementing legislation will allow Congress to address these issues doesn’t fly, because if the legislation doesn’t abide by the agreement, the whole thing falls down. The implementing legislation will still always be an up-or-down vote on the agreement as negotiated.
The executive, whether Republican or Democrat, could easily write “free trade” on a lousy trade agreement and agree with another nation to do something that is bad for both America and the Free Trade Ideal, but not quite bad enough to stop Congress from passing it — especially if both Congress and the White House are controlled by the same party.
The world will not always be as we see it now. Free traders must see that changing the structure of how agreements are created will cause as least as many problems as it solves.