It won’t get as much notice as his budget proposal, but President Obama’s “2014 Trade Policy Agenda,” which was released this week, sends an exceptionally powerful signal regarding the administration’s economic vision.
Unfortunately, it’s the wrong signal.
While the president—in his public pronouncements and his budget—is saying a lot of the right things about income inequality and investment in infrastructure and job creation, the White House has yet to recognize the harm that is done to the American economy—and to prospects of economic renewal that the president envisions—by failed trade policies.
At a time when the United States continues to experience overwhelming trade deficits—$38.7 billion in December—there is little in the way of new thinking in the report. In fact, as Public Citizen’s authoritative “Eyes on Trade” blog notes, “Much of the 2014 agenda is a copy and paste of the 2013 agenda, reiterating USTR’s stock set of talking points, such as the tired, counterfactual promise that a more-of-the-same trade policy will boost exports.”
The 2014 agenda statement outlines the efforts of the administration to advance new free-trade initiatives—the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership—that build on the approach of the North America Free Trade Agreement, the Central American Free Trade Agreement and the permanent normalization of trade relations with China.
The problem with the old way of doing things is that it has not worked. US Senator Sherrod Brown, the Ohio Democrat who authored the book, The Myths of Free Trade (New Press, notes that “we’ve seen more than five million jobs lost to our ‘trading partners,’ in NAFTA, CAFTA, and China…”
Brown argues that, in an increasingly globalized economy, “we should export American products, not American jobs.”
There are sections of the “2014 Trade Policy Agenda” that talk a good line in that regard. But the rhetoric is not matched by a shift in approach. The agenda contains nothing in the way of a vision for breaking the pattern described by the office of Vermont Senator Bernie Sanders:
After the passage of the North American Free Trade Agreement (NAFTA), the Mexican agricultural sector has been decimated by cheap exports from American agribusiness. Poverty has increased, the middle class has declined and people are literally dying in the desert trying to flee Mexico for the US. It is not only Mexico and other developing countries that have been hurt by these unfettered pro-corporate free-trade agreements. It’s also the working families in the US, who are now engaged in a horrendous “race to the bottom.” Despite an explosion of technology and a huge increase in worker productivity, poverty in America is increasing, the middle class is shrinking and the gap between the rich and the poor is growing wider. In the past 6 years, millions of good-paying jobs in the US have been lost as companies continue to shut down here and move to China and other low-wage countries.
Just as it clings to a flawed vision regarding trade policies, the administration’s agenda recycles a wrongheaded approach to negotiating international agreements. “To facilitate the conclusion, approval, and implementation of are market-opening negotiating initiatives (on TPP and T-TIP) negotiations,” the administration’s statement announces, “we are working with Congress to support broad bipartisan passage of Trade Promotion Authority (TPA).”
The broad bipartisan stance in Congress at this point is one of opposition to passage of TPA, a tool that diminishes the role of Congress in shaping agreements by “fast tracking” the process. More than 150 House Democrats have expressed their opposition to “Fast Track” Trade Promotion Authority. “Fast Track is simply not appropriate for 21st Century agreements and must be replaced,” the Democrats wrote. “The United States cannot afford another trade agreement that replicates the mistakes of the past. We can and must do better.”
Several dozen House Republicans have broken with their party’s congressional leadership to express their opposition to Fast Track.
Senate Majority Leader Harry Reid, D-Nevada, says, “I am against Fast Track.” He has urged the administration to back off on its request for Trade Promotion Authority. House Minority Leader Nancy Pelosi, though she is less skeptical than Reid, has says the Fast Track proposal that is currently on the table—a measure sponsored by US Congressman David Camp, R-Michigan, and former Senator Max Baucus, D-Montana—is “unacceptable.”
The Obama administration needs to rethink a trade agenda that is at odds with much of the rest of what the president is saying about job creation, renewal of manufacturing and the strengthening of the US economy.
Instead of recycling failed approaches and flawed strategies, it should listen to Democrats like Congressman Mark Pocan, a Wisconsin Democrat who has been a frequent ally of the administration but says:
Given how previous trade agreements have devastated local manufacturing sectors and shipped American jobs overseas, it would be unwise for Congress to ram through new trade deals without offering proper oversight. Massive trade deals—such as the Trans Pacific Partnership—now affect everything from America’s economy, to consumer and food safety, to labor standards and our environment. Blindly approving or disapproving agreements that have largely been negotiated in secret would represent a derelict of duty for Congress. If there is nothing to hide in these agreements, we should be allowed to debate and amend these deals in the open. I am committed to doing all that I can to prevent the inappropriate use of Fast Track in Congress.
Read Next: Lee Fang on Obama’s nomination of a SOPA lobbyist for a key trade post.