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We All Pay a Price When Politics Gets in the Way of Trade
Apr 24, 2014
By Mark Wagoner: Touchet, Washington
President Obama’s trip to Japan is already a missed opportunity—and Congress deserves a share of the blame.
The White House had hoped to use the president’s visit to Tokyo this week to announce a breakthrough in trade talks, as President Obama embarks on a four-nation tour of Asia. Now it appears that won’t happen: "A stalemate continues," said Japanese economics minister Akira Amari, according to Reuters.
Everybody knew progress would be tough: The United States and Japan are already close trading partners, and bringing us closer together will involve hard choices on agriculture (for Japan) and cars and trucks (for the United States). So the sluggish pace of these negotiations is no surprise.
Yet Americans should demand success.
The benefits of a Trans-Pacific Partnership are enormous. If the United States and Japan complete this trade pact with ten other Pacific Rim nations, global exports could grow by more than $300 billion per year by 2025, according to the Peterson Institute for International Economics. And the United States would enjoy a big chunk of this commerce: $123 billion.
That would translate into a lot of jobs in the factories and on the farms of the United States.
None of it will happen, however, if the president lacks Trade Promotion Authority (TPA), a legislative tool that allows the administration to bargain with other countries and then submit trade agreements to Congress for an up-or-down vote. Foreign governments want to work out deals with the U.S. Trade Representative—not with the U.S. Trade Representative plus 535 members of Congress, all of them with their own agendas and the power to offer amendments.
Since the advent of TPA in the 1970s, every president has enjoyed this tool for at least a portion of his time in office, with the exception of President Obama. TPA last expired in 2007 and Congress has refused to renew it.
Partisanship plays a big role. In the past, Democrat-controlled Congresses have refused to approve TPA for Republican presidents and Republican-controlled Congresses have refused to approve TPA for Democratic presidents. On top of that, many Democrats are outright protectionists: Senate Majority Leader Harry Reid, a Democrat, publicly announced he opposes TPA for President Obama.
Whatever the motives of individual lawmakers, the collective failure of Congress to approve TPA is now hurting America’s ability to talk trade with Japan. Earlier this month, Sen. Rob Portman, an Ohio Republican who was President Bush’s trade ambassador, told the Wall Street Journal that "Japan is reluctant to make big concessions because of concerns that Congress could end up asking for more later."
In other words, Japan doesn’t want to make a deal that Congress might scuttle through legislative trickery.
This is precisely the problem TPA is designed to resolve.
The beauty of TPA is that it frees the executive branch to negotiate with foreign governments while also preserving the authority of Congress to approve or disapprove of the result. It just prevents Congress from messing up a sensible deal with amendments meant to serve special interests.
Here in the state of Washington, we need TPA because we need TPP: Foreign trade is a key to our profitability, especially for those of us who farm. We export huge amounts of apples, cherries, pears, wheat, and wine to Asia.
Without these exports, many of us wouldn’t be able to farm at all.
I grow alfalfa seed, and between 30 and 40 percent of it goes abroad. What’s more, the alfalfa seed I sell to American producers grows a crop with a big export market. Millions of metric tons of alfalfa hay ship out of Portland, Seattle, and other ports for overseas customers. Our most dependable buyer is Japan.
So when I look at the possibility of the United States and Japan reaching an agreement on TPP, I see nothing but economic opportunity—and I’m disappointed to watch politics get in the way of jobs for Americans.
When things go wrong in the world, members of Congress love to blame the White House. In this case, things aren’t going right—and Congress has the ability to help them go better. We’re all paying a price for its refusal.
Mark Wagoner is a third generation farmer in Walla Walla County, Washington where they raise alfalfa seed. Mark volunteers as a Board member for Truth About Trade & Technology (www.truthabouttrade.org).
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