In an ironic situation, President Obama finds his own party, the Democrats, his key opponents while, the Republicans, his greatest allies as he pushes for the Trans Pacific Partnership agreement.
The Trans Pacific Partnership (TPP), a 12 nation free trade agreement, is an integral part of the US rebalance to Asia. If established, the TPP would cover one-third of global trade and 40 percent of the global economy. The idea behind the TPP is to create a set of global rules of trade before the Chinese do. The TPP will set standards for free data flow and intellectual property as well environmental, labour and governmental standards.
Though negotiations on the TPP started in 2005, they have still not concluded and the pact is not yet operational. In addition to negotiations among the 12 participating nations, nations have had to contend with domestic opposition. This is particularly true of the US which joined the negotiations in 2008.
President Barack Obama has asked for "a fast track authority" or Trade Promotion Authority (TPA) from Congress for concluding the TPP. A TPA gives authority to the President to negotiate agreements which the Congress can disapprove or approve but cannot amend. The fast track authority has been used before concluding other trade agreements. For instance, the Trade Promotion authority of 2002 was used to conclude free trade agreements with Chile, Singapore, Australia and Bahrain, among others. This TPA lapsed in 2007, forcing Obama to seek a renewal of the authority to provide the momentum required to ensure that the TPP negotiations go through.
But this move has run into opposition on the Hill, despite committees in both houses having cleared bipartisan legislation for it. The key opposition has come from Obama's own party. Democrats are deeply troubled by the lack of adequate Congressional consultation during negotiations on the agreement as they feel it impinges on the Congress' constitutional authority over trade policy. So, over a hundred and fifty House Democrats have written a letter to the President stating that they will not support giving him fast track authority for the TPP agreement. Another point of criticism is that the text of the draft agreement is not available to the public. Though members of Congress can read the draft agreement, they can do so only under heavy restrictions. Moreover, they are not allowed to publicly discuss what they have read. Democratic Presidential candidates like Bernie Sanders and Martin O'Malley have opposed the deal while the frontrunner, Hillary Clinton, is currently hedging her bets.
But what has really driven the Democratic opposition is the resistance from the workers' Unions. There is concern that the TPP will lead to low paying jobs leaving American shores, causing unemployment in the US. There is also fear that due to this, income inequality will deepen. As Senator Warren said, such deals "benefit multinational companies at the expense of workers". Other who oppose the pact include environmental groups like the Sierra Club which fears that the TPP could lead to increased stress on natural resources and species including trees, fish, and wildlife. NGOs like Doctors without Borders are concerned that the TPP will "restrict access to generic medicines, making life-saving treatments unaffordable to millions" while the Consumers Union worries that the pact will increase the price of prescription drugs. Opponents of the deal have given legislators a petition with 2 million signatures.
Opponents have also been bolstered by support from some American companies who fear that they will not be able to deal with competition from other countries. In fact, 250 tech companies wrote a letter to Congress decrying the TPP. Their reasons for opposing the TPP are that the "TPP would create limits to fair use by making copyright law more strict, make online enforcement of copyright infringement expensive and onerous for start-ups and small companies, criminalize journalism and whistle blowing, and harm consumer and user rights." Thus, there is a broad coalition of opposition to the TPP.
Obama's sales pitch has been that the TPP will create better paying jobs, support wage growth and promote growth in the US and the Asia Pacific. The Obama administration has pushed for the deal describing it as "the most progressive trade deal in history". The TPP, the administration argues, will support made-in-America exports by removing trade inhibiting tariffs and simplifying customs, enforce fundamental labour rights, promote strong environmental protection, and improve transparency and regulations to help U.S. companies engage in and benefit from increased trade in the Asia Pacific. Obama has also said that the benefits of the agreement far outweigh the costs.
Ironically, for Obama, in his push to have the TPP passed, his greatest allies may not be his fellow Democrats but the Republicans with whom he has had an acrimonious relationship. The TPP may be the only issue on which the Republicans and Obama see eye to eye, thanks to the Republicans' traditional advocacy of trade liberalisation.
Democratic opposition has been so strong that it initially blocked consideration of the fast track authority by the Senate (60 votes are required for this and 44 Democrats opposed it in the 100 member Senate). Though the Senate later passed the fast track authority, it now has to get approval from the House of Representatives. Obama has been lobbying intensely as he needs at least two dozen or so votes from Democrats in addition to those of the Republicans to get the authority. He has even promised those Democrats who support the deal that he will campaign for them against any primary challengers, a reflection of the importance he attaches to passing the TPP. Polls show that a majority of American favour free trade agreements and Obama might be able to obtain the TPA to fast-track the negotiations since both the House and Senate are controlled by Republicans.
But as a Washington Post editorial suggests, the debate over the TPP and the opposition that Obama has faced from his fellow Democrats shows that the populist wing within the Democratic Party, represented by Senator Warren, is becoming stronger. It will be interesting to see how this plays out in the upcoming elections.
(The writer is a Research Fellow at the Observer Research Foundation)
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.
PREV
