Elizabeth Warren’s arguments “don’t stand the test of fact and scrutiny.” The Democratic senator is “absolutely wrong.” She’s being “a politician like everybody else.” So says President Barack Obama, who sounds like he’s surprised to learn these things.
Obama is miffed with Warren for opposing him on two pending trade bills. Most controversially, he wants Congress to approve the Trans-Pacific Partnership, an expansive treaty between the U.S. and 11 other Pacific Rim countries that would formalize trade rules, reduce tariffs and ease cross-border investment, among other things. He also wants to pass a “trade promotion authority” bill — so-called fast track legislation — that would commit Congress to voting up or down on trade deals — including the Trans-Pacific pact — without amendments or filibustering.
Most economists believe that free-trade pacts such as this one boost incomes for the U.S. and other countries. The fast-track bill would ensure that once other countries have finally agreed to such a complicated pact, Congress couldn’t undo all their negotiating work. The opposition to both is getting more illogical by the day.
The latest objection Warren has been raising, for instance, is far-fetched. She claims that trade-promotion authority could make it easier for a future Republican president and Congress to weaken financial regulations. All they’d have to do is include the deregulating measure in a trade deal and it could pass the Senate on a majority vote instead of being subject to a filibuster. But those future Republicans would presumably pay a political price for adding such a controversial measure to a trade deal. And if they didn’t care about paying the price because they were so eager to let the banks run wild, they could simply change the filibuster rules to ease deregulation.
Republican arguments against Trans-Pacific aren’t much better. Some of the party’s presidential candidates who say they support free trade are nonetheless opposing fast-track on the grounds that Obama can’t be trusted with negotiating authority. Other Republicans oppose it because the Trans-Pacific pact might include immigration provisions they dislike.
Some libertarian free-traders, meanwhile, worry about the protections for foreign investors that might be included in Trans-Pacific. Foreign investors could go to independent tribunals to sue governments for mistreatment. That’s a legal avenue not available to domestic investors who feel they’ve been mistreated, and it’s reasonable to ask why it should exist. Others raise concerns about how the deal will treat intellectual-property rights.
Finally, politicians in both parties are saying that the administration is being too secretive about the contents of the pact for them to support a fast-track bill that would make it easier to pass.
The answer to all these concerns is that there’s a simple remedy if the president makes a bad deal: Congress can vote the Trans-Pacific accord down. Nothing in the deal will be secret at that point (and there are plenty of ways to learn about it even now). Congress should then judge if the deal’s investor protections or intellectual-property provisions go too far. Making the pact subject to congressional amendment wouldn’t improve anything; it would only make a deal less likely in the first place, since other countries wouldn’t be confident that the agreement they negotiated would stick.
In the past, fast-track bills have usually been harder to get past Congress than trade deals. Opponents of fast-track measures have the power of speculation at their disposal, and there are plenty of voters willing to believe the worst about trade pacts. When actual deals materialize, though, the speculation is easier to dismiss, and supporters can point to benefits to offset the fears. If Congress allows an up-or-down vote by passing fast-track, as it should, that’s probably what will happen this time too: Congress will take a look at the Trans-Pacific pact and decide it’s worth passing.
That would make a lot more sense than the escalating war of words between Obama and Warren. And it would be better for the country, too.
Ramesh Ponnuru is a columnist for Bloomberg View. Reach him at email@example.com.