Schism among Democrats On “Fast Track” to Trade

The trade debate is heating up in the wake of President Obama’s nod to trade in his State of the Union address, the introduction this month of a Trade Promotion Authority (TPA) bill, and the on-going negotiation on two major trade deals.

A major schism among Democrats on trade broke out January 29, when Senate Majority Leader Harry Reid, D-Nev., said in an interview that he was against TPA, commonly known as “fast-track” legislation, which gives the president authority to negotiate trade agreements that are then voted on by Congress without amendments. Without fast-track, it’s difficult to negotiate final trade deals with other countries when they know Congress can change the terms. Reid was quoted as saying: “Everyone would be well-advised just to not push this right now.”

Reid’s opposition is in contrast to President Obama’s endorsement of fast-track authority in his State of the Union address earlier this week when he said:

We need to work together on tools like bipartisan trade promotion authority to protect our workers, protect our environment, and open new markets to new goods stamped “Made in the USA.” China and Europe aren’t standing on the sidelines. Neither should we.

Reid’s stance is at odds too with some leading Democrats, such as Senate Finance Committee Chairman Max Baucus, D-Mont., who joined with Ranking Member Orrin Hatch, R-Utah, and House Ways and Means Committee Chairman Dave Camp, R-Mich., to introduce a TPA bill on January 9. However, Baucus’ active leadership on TPA may be in question, since he was nominated to be Ambassador to China.

The 107-page TPA legislation sets out the principal negotiating objectives for all U.S. trade agreements and deals with a host of trade-related and other issues, including intellectual property, investment, labor and environment issues and capacity building in those areas, promotion of sustainable development, currency practices, as well as beefed-up procedures for consultation with Congress.

Some other Democrat senators – self-described as non-members of the Finance Committee – wrote a letter on January 16 to Sen. Reid criticizing TPA and asking that such legislation should include even more issues:

We believe any package should include provisions to address currency manipulation, stronger mechanisms to address unfair labor practices, the ability of communities to preserve their values, strong trade enforcement policies and should provide innovative solutions to finance improvements to our crumbling infrastructure.

These ever-expanding demands show what happens when trade agreements are steered away from their primary purpose and get captured by special interest groups. It’s worth repeating what I wrote recently:

It is a continuing onslaught on trade agreements as repositories for non-trade issues. Including those issues introduces unneeded complexities and special interests’ pleadings. Many of those issues have their own international fora specifically designed to consider those specialized areas.

Trade involves an exchange of goods and services by buyers and sellers that benefits both parties. Increased trade can lead to economic growth for all parties to trade agreements. That growth can lead to improved labor conditions and environmental improvements. Derailing agreements by forcing other issues to be equally considered can curtail that growth and indeed impede progress in those other areas.

Meanwhile, negotiations on the two major trade deals – the Trans-Pacific Partnership Agreement (TPP) and the U.S.-EU Transatlantic Trade and Investment Partnership Agreement (TTIP) — continue. The 12-party TPP’s current members are Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, the United States, Vietnam, Canada, Mexico, and Japan.

Schism among Democrats On “Fast Track” to Trade