The Truth about Trade
Dean is Chairman Emeritus of 'Truth About Trade & Technology, a nonprofit advocacy group led by a volunteer board of American farmers.
TPP Needs TPA
Nov 30, 2011
In Australia last week, President Obama sounded like a gambler: "Let there be no doubt," he said. "In the Asia-Pacific in the 21st century, the United States of America is all in."
Who can blame him for using a poker term? A couple of years ago, he placed a big bet, promising that American exports would double by 2015. And lately he has enjoyed a winning streak on trade policy. First, his administration settled a tricky dispute with Mexico over long-haul truckers. Second, and more importantly, he finally sent over to Congress for their approval the languishing free-trade agreements with Colombia, Panama, and South Korea.
Now he has set his eyes on an even more impressive prize: the Trans-Pacific Partnership (TPP), a trade alliance that could grow to include nations that account for about 40 percent of the world’s gross domestic product.
The potential payoff is very significant. If Canada, Japan, and Mexico join, the TPP would become America’s most important trade agreement at least since the passage of NAFTA almost a generation ago.
Yet it’s also a risky move--and complete failure is a distinct possibility, especially if Obama presses forward without Trade Promotion Authority (TPA), a legislative tool that empowers him to strike deals with our economic partners.
Think of it this way: TPP needs TPA. It’s the kind of acronym-soup slogan that only a bureaucrat could love, but it’s also a motto our political class should embrace because it would create jobs and opportunities.
TPP started out as a set of trade talks between New Zealand, Peru, Singapore, and Vietnam. The idea was to reduce barriers to commerce, lowering prices for consumers and making business transactions easier.
Then TPP expanded to include Australia, Brunei, Chile, Malaysia, and the United States. Taken together, the TPP nations would be America’s fifth-largest trading partner.
Earlier this month, however, the stakes grew even larger. Japanese Prime Minister Noda signaled his country’s interest. This prompted Canada and Mexico to say that they might want a seat at the table as well.
A successful agreement could turn TPP into the most significant economic bloc on the planet, larger than the European Union. At a time when the World Trade Organization can’t get its 153 members to agree on much of anything, it would represent a meaningful achievement.
It makes a lot of sense for Americans. Right now, Japan slaps a 778-percent tariff on rice imports. It also bans entire categories of U.S. beef. Removing these obstacles--or just reducing them to reasonable levels--would provide a boon to farmers and ranchers. Insurance companies and manufacturers also stand to make huge gains if they can win better access to Japanese markets.
TPP is like a jobs program that doesn’t require the federal government to spend a dime.
Success, however, will require smart play. Obama will have to supply strong leadership as he oversees negotiations.
Congress has a role as well. While our trade diplomats haggle over the details, lawmakers should revive TPA. Under its rules, a deal on TPP would go before representatives and senators for an up-or-down vote. Without TPA, no trade agreement can pass. Our Congress would just nitpick it to death. Nations won’t even enter truly serious conversations with the United States. It would be a waste of their time.
Obama should ask for TPA. So far, he hasn’t bothered, possibly because he doesn’t want to antagonize his labor-union allies. Yet this is an issue he can’t afford to ignore.
Republican presidential candidates ought to put their partisan instincts aside and say he deserves it. They should recognize that it’s for the good of the country--and also that one of them may want to have it available on Inauguration Day in 2013.
Apart from the recent triumphs on trade policy, Washington hasn’t gotten much done this fall. It has refused to address the jobs crisis: Obama’s ballyhooed jobs plan was unrealistic and stillborn. Nor has it confronted the fiscal crisis: Congress’s so-called super committee failed to reach a budget agreement. Perhaps progress on these fronts will have to wait until after next year’s elections.
Yet the foundation for a successful TPP can be laid right now. All we have to do is deal ourselves a good hand.
Dean Kleckner chairs Truth About Trade & Technology. www.truthabouttrade.org