President Obama, elected and reelected with significant majorities of the popular vote, believes that the American people would benefit if he gets authority from Congress to negotiate international trade agreements and then submit them to both houses for approval on an expedited basis.
A bipartisan majority of the Senate favors granting him this power, known as trade-promotion authority, or “fast track,” which his two predecessors also enjoyed. Ditto for a bipartisan majority of the House.
The main thing standing in the way of this democratic tide, however, is the political clout of organized labor, which opposes fast track and the trade-expanding agreements it would enable. Wielding a threatened cut-off of campaign cash, the AFL-CIO pressured House Democrats into the moral equivalent of a filibuster, thus casting Obama’s trade agenda into limbo, possibly for weeks — if not permanently.
Labor is waging this counter-majoritarian battle in the name of “working people,” who, it says, would otherwise face another wave of low-wage foreign competition like the ones purportedly unleashed by previous “bad” trade deals.
Labor leaders consider their moral authority axiomatic in this matter, even though they represent just 11.1 percent of the labor force.
On top of that, Obama’s trade agenda affects at most only a minority of union members. Trade deals, by definition, affect industries that produce tradeable goods, such as cars or coal. Yet as David Wessel of the Brookings Institution has noted , only about 10 percent of union members produce tradeable goods; the rest work in construction, government and other sectors outside the flow of global commerce. For these workers, cheap imports are either irrelevant or, to the extent they consume them, beneficial.
What’s more, the proposed Trans-Pacific Partnership, or TPP — the first trade deal that would be considered under fast track — exposes U.S. industry to only a smidgen of new low-wage competition.
Ninety-two percent of the trade affected by the TPP would be with countries that are either high-wage (e.g., Japan and New Zealand), already have bilateral free trade with the United States (e.g., Chile and Peru) or both (e.g., Canada and Australia).
And the next multilateral pact on tap is a trans-Atlantic agreement with Europe, whose labor and environmental standards are, if anything, higher than those of the United States.
So if the threat to workers, even union workers, is so modest, what explains the labor leadership’s all-out attack on Obama’s agenda, other than sheer force of anti-trade habit?
It can’t be the arcane menace posed by the TPP’s investor-state dispute mechanism, whose potential to disrupt U.S. regulations through arbitration is grossly exaggerated by the unions. As for the purportedly excessive “secrecy” of the TPP negotiations, if anyone understands the absurdity of that complaint, it should be people who do their own collective bargaining behind closed doors.
It’s hard to avoid the conclusion that, for today’s tribunes of the working class, this is not really about trade, or jobs, or wages, but politics — indeed, special-interest politics of a pretty raw variety.
The fast track fight represents something between a do-or-die test of the unions’ residual clout and a golden opportunity for them to unify by exploiting a perennial hot-button issue. The prize is nothing less than power over the post-Obama Democratic Party.
The AFL-CIO has already achieved a lot in that regard, by forcing so many House Democrats to choose labor over a president of their own party. Labor has forced presumptive presidential nominee Hillary Clinton to equivocate on a trade plan she advocated as secretary of state; the unions rolled House Minority Leader Nancy Pelosi (Calif.), too, which is no mean feat. It must have been a heady moment for AFL-CIO President Richard Trumka when Pelosi’s caucus received him almost as Obama’s equal last week.
The results for the country are less salutary. To be sure, the Obama administration has probably oversold the TPP — albeit necessarily, given the ferocity and intellectual dishonesty with which it has been attacked.
Nevertheless, it’s likely a net positive, both economically and strategically. A key purpose of the deal, perhaps the key purpose, is to cement U.S. support for its ally, Japan, in return for which Japan will open its markets to U.S. goods and pursue long-postponed structural reforms. The 12-nation, “Trans-Pacific” aspect gives Prime Minister Shinzo Abe diplomatic cover to carry out domestically controversial but — for both Japan and the United States — advantageous measures.
Ultimately all of this helps counter China, politically and economically. You would have thought labor might be sympathetic to such a strategy, given its complaints about China’s conduct.
Instead, the United States’ entire position in Asia is at risk, thanks largely to the machinations of a Washington interest group that once plausibly spoke for Middle America but increasingly speaks, and acts, only for itself.
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