Senator Elizabeth Warren opened up a new battle in the war against the Obama administration’s trade policy last week, when she charged that the fast-track trade authority now being considered by Congress could ultimately allow a Republican president to gut many of the Dodd-Frank financial reforms.
This provoked a heated response from the White House and its allies, who not only disputed Warren’s claim but bizarrely (and under the cover of anonymity) suggested she was just trying to juice up the Draft Warren presidential movement.
So who’s right? This is an important question to litigate, as the Senate prepares to vote on fast-track authority Tuesday.
The short answer: Warren. All it would take is a Republican president and Congress (or any president and Congress inclined to weaken financial regulations), and indeed fast-track authority could be used as a glide path to dismantle not only Dodd-Frank but potentially other important regulations as well.
First, what is fast track?
Presidents generally want to negotiate trade pacts with a promise to other countries that the US Congress won’t later change what they agreed upon, and so they ask Congress to pre-approve Trade Promotion Authority (TPA), colloquially known as a fast track. The fast-track legislation now up for a vote in Congress says that for the next six years, any trade deal proposed by an administration cannot be amended. The deals also cannot be filibustered in the Senate, and would pass with a simple-majority vote.
In exchange for ceding this authority, Congress writes into the fast-track bill all kinds of requirements about what it wants to see in future trade deals: This version of the legislation, worked out between Senators Orrin Hatch and Ron Wyden and Representative Paul Ryan, has a number of guidelines on environmental, labor, and regulatory standards.
Democrats complain that in the case of the Trans-Pacific Partnership, the fast-track guidelines come too late—much of the deal has already been agreed upon. In fact, when I spoke with Representative Sander Levin last week, he said that when he raised concerns recently with the US Trade Representative about TPP’s highly controversial investor-state dispute process, he was told that the TPP chapter on it is already “closed.” (A representative for USTR declined to comment on the record.)
There is also a near-universal belief among congressional Democrats that guidelines in the fast-track bill are far too soft—that they are much more suggestion than requirement. This is of great concern since fast-track authority will almost certainly be in effect for six years, spanning not only the rest of Obama’s term but the first term of the next president, and some of the following president’s term as well, if Obama’s successor is voted out after four years.