Brace yourself for a big debate in Washington over three little letters — TPP.
The final draft of the Trans-Pacific Partnership trade treaty, in the works for years, is nearing completion and headed toward Congress.
Although still under wraps, enough is known about it to stoke a fiery opposition that is splitting both political parties and creating unusual allies. For the deal: President Barack Obama and most Republicans. Against it: Many Democrats and tea party conservatives.
The United States and 11 other countries — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam — are TPP members. Notably, China and South Korea aren’t.
One aim of the TPP, like trade deals going back centuries, is to design rules to help businesses trade with one another. It would lower trade barriers and tariffs that countries use to protect their own industries and businesses.
That figures to benefit U.S. companies a lot because our markets are relatively more open. Japanese car companies obviously face few obstacles making and selling vehicles here; not so the other way around.
For our region, big agriculture hopes the TPP will boost exports of crops and meat.
The deal is Obama’s Asia-Pacific priority. In his State of the Union, he noted the Chinese will fill the gap if it fails:
“China wants to write the rules for the world’s fastest-growing region. That would put our workers and businesses at a disadvantage. Why would we let that happen? We should write those rules.”
The Office of the United States Trade Representative says TPP countries make up America’s largest export market. In 2013, we exported $698 billion worth of goods to them, amounting to 44 percent of total U.S. goods exports. They accounted for 85 percent of U.S. agricultural exports.
Free trade benefits
Advocates rest their support on the proven benefits of freer trade — mainly that countries can better develop their unique competitive advantages, which can lessen the cost of goods to consumers.
Free trade helps poor countries build wealth and thus stronger middle classes that desire and buy even more goods. In the end, it deepens relationships. Trading partners are less likely to go to war.
Opponents of traditional free trade pacts also stand on solid ground. They point out that past deals — such as NAFTA — have hurt U.S. workers. They have either encouraged companies to move jobs overseas or helped other countries build up their own manufacturers using cheap labor.
Past deals also haven’t insisted that other countries abide by strong labor protections and environmental and product safety standards. Thus U.S. products still end up more expensive.
Some TPP supporters counter that some of our standards aren’t all that great in the first place and that we should improve them on our own.
They also argue that trade deals are the best way to move other countries toward our standards, that it’s better to help the middle classes of those countries rather than let their rulers continue exploiting them and that wage pressures have happened anyway — even without such pacts.
A modern agreement
Opponents take their strongest stand on how the TPP would shape the future of the modern global economy. With technology and the business of “ideas,” trade is no longer merely the exchange of goods or simple services.
The treaty has 29 draft chapters, but just five deal with traditional trade issues. The rest address the aforementioned environmental, labor and product safety standards, along with intellectual property rights, privacy, data transmission, international banking, the handling of disputes and more.
Critics with progressive and conservative stripes both contend the deal is more about protecting corporate rights and investment. Corporations have indeed been involved in drafting it to their liking.
For example, the nonpartisan but progressive-leaning Public Citizen interest group says the TPP would require the free transfer of data and freedom of server location, making it easier for companies to offshore call centers and back office operations.
Big pharmaceutical companies apparently will get new patent protections, thus curbing the introduction of cheaper generic drugs here. The treaty would also erode other countries’ drug price regulations.
Progressives also charge that the treaty will still countenance “slave labor” in countries such as Vietnam. They say it would even provide incentives for U.S. companies to offshore jobs to low-wage countries, locking those workers in poverty.
They’ve also widened their criticism beyond the treaty’s particulars. Last week LGBT members of Congress criticized the administration for including Brunei and Malaysia, which are hostile to gay communities.
A main charge from the tea party right is that the TPP is another example of crony capitalism. They’re calling it “Obamatrade.”
A sovereignty question
One issue especially unites progressives and tea party conservatives. They argue that the deal would infringe on U.S. sovereignty.
This is a bit odd because distrust of international deals over sovereignty issues has been prominent on the right for a while.
But both sides make the point that the TPP could override domestic federal, state and local policies.
It could limit how we decide to regulate banks and other financial institutions. It could prohibit Buy America laws and give foreign contractors equal access to government contracts. It could ban “country of origin” labels for food.
The big sticking point is how the TPP countries will handle conflicts with the domestic laws of a country.
According to Public Citizen, under a process called “Investor-State Dispute Settlement,” international corporations could challenge any laws, regulations and court decisions they contend violate the TPP.
A “tribunal” made up of three private lawyers would handle those matters outside domestic legal systems. And they could require that governments who lose such cases reimburse companies for lost profits.
Rep. Keith Ellison, a liberal Democrat from Minneapolis and a leading opponent of the TPP, is working with Republicans on the issue. He told Slate: “This is essentially an ‘America’ issue. The last thing I want is some international unelected body deciding these critical questions.”
Finally, there’s the matter of how this gets past Congress. Obama is planning to ask for Trade Promotion Authority, or “fast track.”
If Congress approves, the president will submit the treaty and Congress will have to take an up or down vote on it with limited debate and no amendments. The reasoning is that such a complex deal can’t be taken up piecemeal.
Granting fast track authority will be the first fight in Congress, and big labor and other groups are organizing against it. If fast track is approved, then Congress will take up the deal itself. If the treaty is adopted, the president will have to propose laws for Congress to change to conform with the TPP.
The betting is that many Democrats, driven in part by recent worries about the middle class, won’t go along with fast track. And that a small contingent of Republicans, worried about sovereignty and executive overreach, won’t either.
So unless the president can pull off the upset, the treaty will die.
And the Chinese will thank us.
Local delegation positions
Here’s how our area senators and representatives stand on granting President Barack Obama “fast track” authority to submit the Trans-Pacific Partnership to Congress:
GOP Sen. Pat Roberts: Yes
GOP Sen. Jerry Moran: Undecided
GOP Rep. Kevin Yoder: Yes
Democratic Sen. Claire McCaskill: Undecided
GOP Sen. Roy Blunt: Yes
Democratic Rep. Emanuel Cleaver: No
GOP Rep. Sam Graves: Undecided