The House of Representatives voted last week to give President Obama the authority to negotiate free-trade agreements with minimal interference from Congress. Following legislative review, the pacts would be subjected to a simple yes-or-no vote, with no amendments permitted.
In reality, the lawmakers' action wasn't quite so straightforward. House Republicans decided to move forward on fast-tracking, or what is officially called Trade Promotion Authority (TPA), without the protection of Trade Adjustment Assistance (TAA), a mechanism for aiding U.S. workers who have lost their jobs as a result of trade pacts.
The reason? House Democrats, who have previously supported TAA as a necessary safeguard against the impact of free-trade agreements on the domestic economy, shot it down earlier last week, even as they voted in favor of TPA.
It was all part of a strategic move to scuttle fast-track authority, which Democrats assumed could not proceed without the protections offered by TAA. House minority leader Nancy Pelosi admitted that while she was "a big supporter" of TAA, she voted against it because it was "the only way to slow down fast track."
Or so she thought. House Republicans, who find themselves in the rare position of agreeing with President Obama on the issue of free trade, still hope to approve TAA, but have delayed reconsideration. Their actions of last week included language that allows House Speaker John Boehner to bring up TAA for another vote anytime before July 30, which marks the beginning of the August recess.
At issue are two big trade agreements currently under negotiation: the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), covering trade with Asia and Europe, respectively.
TPP, which includes 12 countries in the Asia-Pacific region, has been a particular lightning rod for criticism. Opponents charge the pact would result in the loss of U.S. manufacturing jobs, and place the interests of multinational corporations ahead of government policymakers.
Following last week's defeat of TAA in the House, frustrated Republicans decided to act on TPA through a stand-alone bill. Now it's up to the Senate to approve similar legislation. If it does, fast-track authority, which is considered essential to U.S. accession to TPP and TTIP, goes ahead without any protections for American workers. Republican lawmakers are clearly hoping to place Democrats in the position of having to reassert their traditional support of TAA.
How the latest congressional action will play with voters is uncertain. Public sentiment is trending against the big trade pacts, and negotiators aren’t doing themselves any favors by insisting on absolute secrecy. (To the point where WikiLeaks has offered a $100,000 "bounty" to anyone who reveals details of the 26 chapters of the TPP that haven’t been made public.)
Free-trade supporters argue that there's much at stake. Philip Sutter, director of government policy with customs broker and freight forwarder Livingston International, believes fast-track authority will be granted to President Obama. But if it isn't, he says, there will be "a lot of repercussions." Chief among them is the notion that the U.S. will be left out in the cold while other nations band together in preferential trading arrangements.
Like many other trade experts, Sutter considers fast track essential to the successful conclusion of TPP. "Negotiators need assurance that what they're negotiating is what will be ratified by the individual parties to those trade agreements," he says.
Various U.S. presidents have been granted fast-track authority over the past 30 years, making possible such controversial treaties as the North American Free Trade Agreement (Nafta). Which is why opponents of TPP and TTIP are so bent on denying that power to President Obama this time around.
U.S. backers argue that participation in TPP means an enhanced American presence in the Asia Pacific region. In its current form, the agreement pointedly excludes China, and it wouldn't be farfetched to suggest that TPP is a calculated attempt to offset that nation’s growing economic and political clout.
Certain aspects of the proposed agreement remain extremely troublesome, however. It's more than a question of tallying up lost American jobs. A leaked clause of TPP on investor-state dispute settlement (ISDS) would allow multinational corporations to sue governments for policies that result in the loss of their profits or property rights. The disputes would be settled by an international tribunal, without the right of appeal. In cases where the corporation prevailed, taxpayers of the country in question would foot the bill.
That's not exactly an idea to be embraced by citizens who already bemoan the loss of domestic industry due to offshored manufacturing. "It comes down to people's fears over sovereignty," Sutter admits.
ISDS provisions have been inserted into a number of existing trade agreements, including Nafta, and corporations have used them as a basis for suing multiple governments for perceived losses of their "property." Opponents of TPP and TTIP fear the pacts will give global business even more power to chip away at national laws on the environment, public health and workers' rights. Witness Philip Morris's lawsuit against Uruguay for that nation's move to increase the size of health warnings on cigarette packs. It's one of many moves by tobacco companies to erode or undermine national laws that are intended to promote public health by curbing the use of their products. Is this really the intended meaning of "free trade"?
Will TPP and TTIP be of bottom-line benefit to the U.S. and global economies, or are they merely tools for building a world run by big business? "It's hard to say without having the facts," says Sutter. "I would generally espouse free trade. But it would be good to see the details."
If free traders truly want public support for their efforts, they will first need to bring their negotiations out of the shadows.
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