International trade is one of the few issues where President Obama is allied with Republicans and at odds with many — perhaps most — Democrats. That makes it one of the best opportunities for the president to get legislation through Congress, as well as one of trickiest items on his agenda. He will be obliged to build the kind of coalition — Republicans and centrist Democrats — that he has yet to show he can create.
In his State of the Union address Tuesday, the president urged the skeptics to consider the broader economic impact that trade would have for the economy and the consequences of ceding the stage to others.
“Twenty-first century businesses, including small businesses, need to sell more American products overseas. Today, our businesses export more than ever, and exporters tend to pay their workers higher wages. But as we speak, China wants to write the rules for the world’s fastest-growing region. That would put our workers and businesses at a disadvantage,” Obama said.
That would be a grave mistake, he said: “We should write those rules. We should level the playing field. That’s why I’m asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but fair.”
Supporters say the time is ripe. “Everyone has cited trade as the ripest area for cooperation between the president and Congress,” said John Murphy, the Chamber of Commerce’s vice president for international affairs.
The main item on the White House’s trade agenda is the Trans-Pacific Partnership. The proposal would lower tariffs and set new, uniform regulations for intellectual property, labor and state-owned enterprises for 12 Pacific Rim nations that encompasses 40 percent of global GDP: the U.S., Australia, New Zealand, Canada, Japan, Vietnam, Mexico, Chile, Brunei, Malaysia, Singapore and Peru. China is notably absent.
The deal also would give investors legal protections for doing business in those countries.
The international talks regarding TPP are reportedly wrapping up and the administration is expected to bring the deal to Congress for approval in the spring.
Before it will do that, though, the White House wants Congress to pass a renewed version of trade promotion authority. Also known as “fast track,” the measure would prohibit Congress from being able to amend trade deals, allowing only an up or down vote on them. Obama focused on fast track in his address, only alluding to the Pacific trade deal.
The White House has argued that it needs fast track to strengthen its hand in negotiations with foreign countries. Business leaders agree, arguing that it needs to be able to ensure its trade partners that any deal the administration strikes will stay intact.
Thus, the administration must pass fast track before it will submit the Pacific pact to Congress for approval. The U.S. cannot have trading partners wondering if deals will be undone by “535” negotiators, the total number of U.S. senators and representatives, said Jay Timmons, chief executive officer of the National Association of Manufacturers.
“I am cautiously optimistic that Congress will grant this president similar authority that every president since Franklin Roosevelt has had,” Timmons said.
But limiting Congress’ authority is not an easy thing to get lawmakers to agree to. The president made a call for passing fast track in his 2014 State of the Union address. The proposal was killed the next day by then-Senate Majority Leader Harry Reid, D-Nev., who was not interested in fighting his own caucus on the issue. “Everyone would be well-advised to not push this right now,” Reid said at the time.
With Republicans now in control of Congress, the conventional wisdom is that the trade agenda can pass. All the top GOP leaders have indicated they support it. But even advocates concede it will not be easy.
In a 2013 letter to the White House, 151 House Democrats announced their opposition to both TPP and fast track. Several Senate Democrats, led by Massachusetts Sen. Elizabeth Warren, D-Mass., have been sharply critical as well. Twenty-one Republicans signed a different letter that year opposing fast track. Of them, 16 remain in Congress. Some conservative groups have come out against it as well.
The liberal lawmakers’ complaints range from a flat opposition to trade as bad for U.S. businesses, to concerns over trade’s impact on the environment. Members of both parties have complained that the White House has been too secretive about the trade negotiations. Tea Party groups such as Americans for Limited Government have warned members not to cede too much congressional authority to the White House.
Obama told the trade critics Tuesday night that he sympathized and even agreed with some of their broader concerns: “Look, I’m the first one to admit that past trade deals haven’t always lived up to the hype.”
But he argued that the administration was addressing those concerns, going after countries that were breaking the rules. He also argued that trade could actually reverse outsourcing. Businesses leaders had told him they want to bring the jobs back into the country. “Let’s give them one more reason to get it done,” he said.
The president’s advocacy has give business leaders hope. “Trade promotion authority is never easy but the stars seem to be aligning for it to come up pretty quickly in Congress. We’re optimistic that the major actors are organizing a very serious effort to move this legislation swiftly,” the Chamber’s Murphy said.
Business groups will lobby Congress hard, recruiting individual employers from the lawmakers’ home districts to press the case. “We’re certainly going to remind members of Congress that 95 percent of the customers in the world exist outside the borders of the United States and we want to sell our stuff to them,” NAM’s Timmons said, a point Obama also made.
A staffer for one Democratic lawmaker opposed to fast track and the Trans-Pacific Partnership said they still believe they would win. The individual pointed to 1998, the last time a Democratic president tried to pass a trade deal through a Republican Congress. President Bill Clinton was dealt a surprising defeat when 71 Republicans joined 171 Democrats and voted against a version of fast track.
Trade critics are hoping that rank-and-file Republicans will again warm to the idea of sending the president a defeat. The energy on the right is with the Tea Party, the Democratic staffer noted.
