PRESIDENT OBAMA’S chances of successfully negotiating a new trade deal between the United States and 11 Pacific Rim nations have improved dramatically with the announcement of a bipartisan compromise bill that would enable him to submit the proposed pact, known as the Trans-Pacific Partnership (TPP), to Congress for a straight up-or-down vote. Not surprisingly, this new “fast track” legislation has been denounced by critics, most of them Democrats, who say that it traduces Congress’s right to supervise the negotiations.
These critics insist on this despite the fact that Republican committee chairmen Sen. Orrin Hatch (Utah) and Rep. Paul Ryan (Wisc.) wrote the bill in cooperation with both the White House and ranking Democrat Ron Wyden (Ore.) of the Senate Finance Committee. It incorporates and addresses traditional Democratic concerns about labor and environmental rights to a far greater and more explicit degree than the previous fast-track law, which was adopted in 2002 and expired in 2007. It provides greater transparency in the form of a mandatory 60-day public comment period before the president signs the bill. It gives either house of Congress the right to rescind fast track if it feels the law’s labor, environmental and other negotiating objectives were not met in the final TPP deal. Foes nevertheless gripe that the bill does not sufficiently enforce its instructions to the president’s negotiators; of course, there wouldn’t be much point sending negotiators if their hands were tied in advance by Congress.
It’s true, as the critics say, that the fast-track bill does not compel the administration to negotiate an end to alleged currency manipulation by its TPP partners. It’s also true that countries can juice their exports by artificially cheapening their currencies, and various countries have practiced this to the detriment of the United States. The problem is that it’s very difficult to establish precisely, much less in a legally binding multinational agreement, “correct” valuations of major currencies or the precise intent behind any particular policy that affects currency values. Both the Federal Reserve and the Bank of Japan have adopted quantitative easing in recent years, mainly to fight deflation and revive domestic demand, but the effects have spilled over onto their currencies. Do the congressional opponents of fast track think both central banks were manipulators?
The worst alleged currency manipulator, China, isn’t even a party to TPP, and it probably wouldn’t seek to join the treaty for years. In fact the agreement is an important counterweight to Chinese influence in the strategic East Asian region.
A political battle royal now awaits, as Democratic trade-agreement opponents line up against a rare alliance of the Republican majority in Congress and President Obama. The foes of fast track deserve to lose on the merits, but they might be interested to know that they also appear to be out of step with public opinion. A recent Gallup poll shows that 58 percent of Americans “view foreign trade as an opportunity for economic growth through increased U.S. exports,” while only 33 percent see it as “a threat to the economy from foreign imports.” The latter number is one of the lowest anti-trade readings of the past 20 years. Though the lesson continues to elude too many anti-trade interest groups, and the lawmakers who heed them, the American people understand that they have more to gain than to fear from a more open global economy.