Sen. Elizabeth Warren on Wednesday voiced new concerns over President Obama’s trade agenda as congressional Democrats ramp up efforts to slow the administration’s bid to finalize a major free-trade pact in Asia that the president has called a top priority.
The disagreement threatens to expose old divisions over international trade and hamper Democrats’ efforts to unify their party going into the 2016 elections.
Warren (D-Mass.), fresh off her break with the White House on the budget last week, said in a letter to U.S. Trade Representative Michael Froman that the Trans-Pacific Partnership (TPP) could erode U.S. financial safeguards designed to “prevent future financial crises.”
“We cannot afford a trade deal that undermines the government’s ability to protect the American economy,” Warren said in the letter, also signed by Sens. Tammy Baldwin (D-Wis.) and Edward J. Markey (D-Mass.). The Washington Post obtained a copy.
The senators are focused on three specific provisions, and they do not state outright opposition to the 12-nation pact, which is still being negotiated. But Warren’s status as the emerging leader of the progressive wing of the party could complicate the Obama administration’s attempt to rally support from enough Democrats to get the deal completed.
Warren was a key voice in the debate over the $1 trillion spending plan, delivering a blistering attack on a measure in the bill that loosens restrictions on derivative trading.. Though the budget was approved with backing from the White House, Warren further burnished her credentials with progressives, who have urged her to mount a presidential bid.
Obama has called trade an area where he hopes to find common ground with Republicans, who take control of the Senate next month and have expressed support for liberalizing trade policy.
The president has also said the proposed pact is a cornerstone of his Asia policy, which aims to balance a greater U.S. military presence with deeper economic ties to the region, and Obama has pledged that the final trade deal will have higher labor and environmental standards than past free-trade agreements.
In her letter, Warren raises concerns that the deal could include provisions that would allow foreign companies to challenge U.S. policies before a judicial panel outside the domestic legal system, increasing exposure of American taxpayers to potential damages.
She also objects to potential provisions that she said would grant foreign companies access to U.S. markets without being subject to restrictions on “predatory or toxic financial products” and that would restrict the U.S. government’s ability to impose capital controls, such as transaction taxes, on international firms.
A spokesman for Froman’s office defended the pact. “TPP will in no way limit the ability of governments to put in place strong consumer protections or to regulate financial markets, including derivatives,” Matthew McAlvanah said. “In fact, it will include specific provisions protecting regulation as well as ensuring that other countries provide the same type of basic judicial fairness that we already provide under U.S. law to American and foreign businesses operating in the United States.”