Stepping up for free trade in the US

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In the modern era, US Republicans have espoused free trade — and FTAs — as an extension of their domestic goals to foster vigorous market competition and limit government intervention on behalf of favoured protectionist interests. To carry forward that tradition, even in the face of the current bitter partisan divide, Republicans in Congress must take the lead in granting President Obama the authority to conclude new FTAs and get an expeditious decision on the agreements from Congress. Specifically, this means allowing the passage of so-called Trade Promotion Authority (TPA) legislation that provides authority from Congress to the president to enter into specified trade negotiations and lays down congressional procedural rules that establish an expedited legislative approval process for the resulting agreement(s). Previous TPA authority lapsed in 2007.

After dawdling for three years, President Obama in 2011 finally threw his support behind the three FTAs with South Korea, Colombia, and Panama that his administration inherited from the Bush administration. To his credit, the president has pushed since then to complete negotiations of the much more significant Transpacific Partnership Agreement (TPP), and more recently the Transatlantic Trade and Investment Agreement (TTIP). After 19 sessions of hard bargaining over the last three years, TPP negotiations are reaching a crucial endgame. Thus, passage of TPA renewal is now an urgent priority.

The congressional politics of TPA passage, and subsequently the approval of both the TPP and TTIP, remain dicey. While Republicans in Congress are relatively united on these issues, the Democratic Party remains badly divided on trade policy — not least because of the continuing, adamant opposition to most trade agreements by labor unions and many environmental groups.

The House of Representatives is the key barometer on trade policy votes — first, because it has initial constitutional power over revenue (trade) bills and, second, because with two-year terms and smaller boundaries House members must pay close heed to local interests. With these realities in mind, it should be noted that though President Clinton strongly supported the North American Free Trade Agreement, he did not carry the majority of House Democrats when the agreement came before Congress. This pattern has carried forward down to the Obama administration. Though the president finally got behind the South Korea, Colombia and Panama agreements, his lobbying efforts failed to persuade most House Democrats.

More to the point, 151 House Democrats recently signed a letter to President Obama opposing TPA legislation in its present form, stating ‘“Fast Track” [TPA] is simply not appropriate for 21st Century agreements and must be replaced’. As the administration has not signalled that it wants dramatic changes in TPA provisions, most of these Democrats will almost certainly oppose the legislation when it comes before them.

Though divisions among House Republicans have become notorious in recent years, driven by the rise of the Tea Party, on trade policy a durable consensus still remains. And though there were predictions that Tea Party House Republicans would be suspicious of globalisation and open trade after the 2010 election, just the opposite occurred: Tea Party House members viewed trade agreements as furthering their goals to downsize government and deregulate markets. Thus, in 2011, they voted overwhelmingly for the pending FTAs, as did most establishment House Republicans. Despite this record, TPA reauthorisation does present new issues for some House GOP members, particularly for the more conservative Tea Party-affiliated congressmen. Recently, 22 House Republicans signed a letter opposing the passage of TPA legislation. This is a relatively small percentage of House Republicans (and of Tea Party House Republicans); but opponents are stepping up their campaign, and thus need to be answered.

Two arguments explain the incipient dissent: one, though not stated openly, is a reaction against giving any kind of victory to the Obama administration; the other involves broader constitutional arguments about TPA legislation ceding congressional power to the executive and eroding national sovereignty.

As for the personal and political distaste for giving Obama a victory, opposition to TPA legislation — and thus, by extension, ratifying the TPP and TTIP — for Republicans is akin to the proverbial ‘cutting off your nose to spite your face’. Ultimately, a defeat for the TPP and TTIP would represent a defeat for longstanding Republican policies and principles and a victory for those elements of the Democratic Party that are deeply suspicious of globalisation and global free enterprise.

On the constitutional questions, despite claims from anti-global activists on the left (and right), conservative judicial experts have consistently defended the limited granting of authority on trade from Congress to the executive as within the bounds of the division of powers envisioned by the Founding Fathers. They make two points: first, through the TPA process, Congress exercises the power to dictate specific negotiating goals, and it mandates constant consultations with congressional leaders during the course of extended bargaining sessions. Second, and of paramount importance, Congress through the TPA process reaffirms that the provisions of trade agreements cannot force changes in US domestic law.

US sovereignty and congressional prerogatives are not threatened by TPA legislation or the proposed new trade agreements. Thus, Republicans should get on with the job of reaffirming their traditional commitment to open markets and vigorous international competition.

Claude Barfield is a former consultant to the office of the US Trade Representative and a resident scholar at the American Enterprise Institute.

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About the Author

 

Claude
Barfield
  • Claude Barfield, a former consultant to the office of the U.S. Trade Representative, researches international trade policy (including trade policy in China and East Asia), the World Trade Organization (WTO), intellectual property, and science and technology policy. His many books and publications include Swap: How Trade Works with Philip Levy, a concise introduction to the principles of world economics, and Telecoms and the Huawei conundrum: Chinese foreign direct investment in the United States, an AEI Economic Studies analysis that explores the case of Chinese telecom equipment maker Huawei and its commitment to long-term investment in the US.
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    Email: cbarfield@aei.org
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