U.S. President Barack Obama with the heads of state of other member countries to the Trans-Pacific Partnership in 2012
Congressional leaders are in the midst of drafting a bill that would allow President Obama to complete a landmark trade accord known as the Trans-Pacific Partnership, or TPP. Although a majority of Republicans favor the agreement, their support may not be enough to overcome the opposition of liberal Democrats. One of the great fault lines of the Democratic party, trade seems to have become even less popular among left-leaning lawmakers of late. Indeed, only 13 House Democrats have gone on record to support the current agreement. If more Democrats do not follow suit, the TPP — a major White House priority — may not make it out of Congress.
Advocates of free trade generally employ a mix of economic and geopolitical arguments in explaining why trade liberalization benefits the nation. As compelling as these arguments are, the Obama administration should focus its public messaging primarily on dispelling the many fears and misconceptions about trade that have become so prevalent among Democrats. After all, the TPP, which aims to update the global rules on trade in the interest of American workers, should be something that both parties can rally behind. Yet the fact that so few Democrats support the deal begs the question: What are they getting wrong about trade?
The Obama administration should focus its public messaging on dispelling the many fears and misconceptions about trade that have become so prevalent among Democrats.
For one, many liberals believe that free trade destroys jobs, lowers wages, and erodes U.S. competitiveness. However, as many experts have pointed out, this argument fails to differentiate between the separate effects of increased trade and trade agreements. Economists at M.I.T. concluded that between 1990 and 2007, Chinese imports accounted for 21 percent of the decline in American manufacturing jobs. Yet the United States has never had a bilateral trade deal with China. This suggests that increased trade — driven by globalization rather than formal agreements — is the primary driver behind the economic ills often associated with trade pacts. Agreements like the TPP, by contrast, are among the tools that governments can use to shape the adverse effects of globalization.
This is not to say that Democrats are wrong to criticize past agreements. President Obama will be the first to admit that the North American Free Trade Agreement (NAFTA) was flawed in various ways. In fact, one of his campaign promises in 2008 was to fix these problems — and through the TPP, he is doing just that. Among the twelve countries participating in the agreement, six — including Canada and Mexico — already have free-trade deals with the United States. One of the core aims of the TPP is to streamline the divergent rules of all these separate agreements, imposing the same high-level, fully enforceable protections for workers’ rights, the environment, and open access to the Internet on all 12 countries.
Many Democrats have also taken issue with the secretive and corporatist aspects of the agreement. The appearance of negotiations as such for much of the process has certainly obscured the broad-based benefits of the accord in the public eye. However, thanks to recent efforts by the USTR and the Senate Finance Committee, previous concerns about interest-group dominance and lack of transparency have largely been addressed: e.g., every member of Congress can now review the text of the agreement; more advisory committees representing labor, environmental, and consumer interests have been established; and the final deal will be subject to public comment for 60 days before the president can sign it.
The appearance of negotiations as such for much of the process has certainly obscured the broad-based benefits of the accord.
What is clear is that Democrats dislike the TPP for the wrong reasons and have failed to recognize the broader importance of the deal. By doing so, however, they have ignored the interests of those whom the TPP is designed to benefit the most: American workers in export-led industries. The United States needs to play a leading role in updating the global rules on trade so that American workers can compete on a level playing field. Otherwise, countries like China will establish rules that advantage their own businesses and workers.
International trade has reached a fork in the road, and the TPP can help put the U.S. on the right track. Facing a stalled WTO process, many countries have turned toward smaller regional and bilateral trade deals — a trend that threatens to carve the global economy into regional blocs with different (and exclusionary) standards of integration. If this were to happen, competitors would have a leg up on American businesses in some of the world’s most dynamic markets, particularly in Asia. The best defense against this threat is the TPP, which would impose the same trade rules on 11 Pacific Rim countries and open up new markets to American-made goods. There is no better way to protect the almost 12 million jobs that depend directly on U.S. exports.
The question, then, is not whether to trade, but how.
With this in mind, it is unclear what Democrats hope to accomplish by blocking the TPP. With or without an agreement, the U.S. will continue trading in Pacific markets. The question, then, is not whether to trade, but how. With its unprecedented labor and environmental standards, the TPP would set a benchmark for all future trade agreements. Therefore, it behooves Democrats to work with, rather than against, the Obama administration to make the deal as progressive as possible.
Demetrios Papageorgiou is studying Government and Economics in the College of Arts & Sciences at Cornell University.
Image Attribution: “Barack Obama at ASEAN Summit 2012” by Pete Souza, licensed under Public Domain
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