Who doesn’t want $123 billion? Why the trade deal must be done.

May 28, 2015
The skyline of Singapore's central business district is seen at dusk as operations continue at a PSA International port terminal in Singapore

The skyline of Singapore’s central business district at dusk as operations continue at a PSA International port terminal in Singapore, September 25, 2013. REUTERS/Edgar Su

It’s absurd to pretend that economic activity and commerce stop at U.S. borders. But that is the position of leading Democrats in Congress.

They have turned enactment of two major trade deals, covering more than 50 percent of the world economy, into a hard-fought battle. Achieving the Trans-Pacific Partnership with Asian countries and the Transatlantic Trade and Investment Partnership with the European Union will require navigation of a unique political landscape. President Barack Obama must work with Republican members of Congress to overcome opposition from congressional Democrats and the labor-union bosses who help fund the modern Democratic Party.

The United States has sat idly by in recent years while other nations have gained advantages by inking agreements to eliminate tariffs and reduce barriers to trade. That makes these two big trade deals imperative. The only way the agreements get done, however, is for Congress to approve trade-promotion authority, known as fast-track authority. With this, trade agreements negotiated by the White House go to Congress for an up-or-down vote and are not subject to amendments. Granting the president fast-track authority is the only way to get prospective trading partners to sit down for the time-consuming and complicated negotiations required to reach an agreement.

Ships gather off the ports of Los Angeles and Long Beach, California in an aerial image

Ships gather off the ports of Los Angeles and Long Beach, California, February 6, 2015. REUTERS/Bob Riha Jr

Senate Minority Leader Harry Reid (D-Nev.) likes to boast he has never supported a trade agreement in his 33 years in Congress. In recent weeks, he has been working hard to block fast-track approval for Obama. But Senate Majority Leader Mitch McConnell (R-Ky.) fought successfully to get it passed out of the Senate on Friday, so the House can take up the bill after Memorial Day recess.

It will be good for the country if House Republicans can overcome Democratic opposition and the concerns within their own caucus about granting Obama this additional authority. Much evidence shows that these trade agreements would benefit Americans.

Trade supports one out of every five U.S. jobs, according to the Brookings Institution. Jobs tied to trade are more lucrative, paying 18 percent more, on average, than other occupations. European Commission analysis of a Center for Economic Policy Research study finds that approval of the European trade pact would raise wages for both high- and low-skill jobs. The study also finds that an EU/U.S. trade deal could, once fully phased in, increase gross domestic product by $103 billion in the United States and $130 billion in  Europe. This would result in a permanent increase in the amount of wealth that these two trading partners can produce every year.

Loading cranes are seen at a shipping terminal  in the harbour in Hamburg

Loading cranes at a shipping terminal in Hamburg, September 18, 2014. REUTERS/Fabian Bimmer

The Trans-Pacific Partnership is expected to boost world exports by $305 billion, of which more than $123 billion would come from the United States, and increase the size of the global economy $223 billion a year by 2025, according to a study by the Peterson Institute for International Economics. The Peterson Institute estimates real income benefits to the United States could be as high as $77 billion a year.

The pending trade deals are also of particular importance to certain states. California and Texas, for example, are the biggest exporting states in terms of total dollar figures. This doesn’t tell you, however, which states are most dependent on trade.

When looking at the share of state economies tied to trade, Washington and Louisiana are at the top of the list, with more than 20 percent of their economies tied to exports. Rounding out the rest of the top exporting states are Texas, South Carolina, Kentucky, Vermont, Michigan, Utah, Mississippi and Indiana.

Regardless of how much they distrust Obama or how much money they get from labor unions, any of the 68 Republicans and 29 Democrats in those congressional delegations who oppose giving the president fast-track authority would be doing their states a great disservice.

Congressional opponents claim they want a say in the trade agreement. Yet even if they grant trade-promotion authority, members of Congress will have a say if they don’t like any deal reached. They can vote it down.

Time is of the essence. We have a Democratic president who wants fast-track authority. We have a unified GOP Congress that wants to pass it. After the 2016 election, Republicans may not control the Senate. That would doom fast-track authority right there.

If the authority isn’t granted now, there is a real possibility that the United States may not do any trade agreements for the next decade. Washington cannot afford such a withdrawal from the global economy.

5 comments

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America was built on a 20% import tariff, since 1791. It is now at 1%, and how is that working out for our economy. China still charges us 20%. Grover Norquist is a moron who confuses multi-national business with American business.

Posted by Solidar | Report as abusive

Don’t we already have trade deals or extremely low tariffs with all the countries that would be involved with these trade agreements, haven’t all trade agreements been passed when Congress voted for trade promotion authority (there goes our opportunity to have a say), and why is time of the essence? I would think that for something this massive, which involves a very great deal more than trade, our congressional representatives should take the responsibility which the constitution gives them, for good reason, and take the time to carefully debate these trade agreements.

Our trade deficits have gone up – by more than 400% – with countries with which we have trade deals, while they have gone down with countries with which we do not have trade agreements. In other words, trade agreements mean imports go up while exports go down and that means a loss of jobs. Plus these trade deals could also impact food safety and internet freedoms, expand the ability of foreign corporations to sue us if our laws and policies interfere with their “expected future profits” (which could end up weakening our laws and therefore this threatens our freedoms), and affect us in many other ways. NAFTA decimated Mexican farmers and worsened working conditions for other Mexicans, and that resulted in more illegal immigration. The TPP would include even more Latin American countries.

It’s true that other nations have gained advantages through trade deals because we lost jobs that went overseas. As a matter of fact, even though corporate profits have increased exponentially, American workers’ wages have stagnated for a long time. These trade deals would only increase the downward pressure on wages. That’s why this is being called part of the global race to the bottom. That’s not going to bring America up again in any way.

With so many other issues in addition to trade on the table, and so many concerns about our economy, we have to have the greatest voice that we can in this process. We have to be able to have real input with our representatives in Congress and that means all the issues have to get the necessary time and attention. That’s why we need to call our representatives in the House of Representatives ASAP to tell them to Vote No to Fast Track for the Trans Pacific Partnership and the Transatlantic Trade and Investment Partnership/No to Trade Promotion Authority.

Posted by LookCarefully | Report as abusive

First of all, don’t call them trade agreements. These are corporate rights agreements. Most of the clauses (from what has been released so far) don’t even deal with trade. It’s mostly about intellectual property and dispute settlement. Does anybody really want a trans-national corporation coming into their community and suing them in a secret tribunal for loss of potential future profits due to a local law that prevents fracking or whatever?

Release the full agreements, give Congress and the people enough time to decide if what’s in there is good for the US, then let them vote. But don’t shove shove this stuff down our throats without an open review.

Posted by dewolfson | Report as abusive

Trade agreement enforcement = multi-national tribunal. Grover Norquist and the republicans are suddenly big fans.

Posted by Solidar | Report as abusive

“The Democrats are on the wrong side of history, when it comes to Iraq. History will prove that Bush is right on this…” -Grover Norquist, April 2003

Posted by Solidar | Report as abusive