The Democratic Party’s Failure on Trade Policy

Free Trade As anyone who follows the news is aware, Barack Obama’s biggest legislative goal for his second term is to pass the Trans-Pacific Partnership trade agreement. He may well get fast-track authority in order to push for passage of the agreement, and the agreement may yet pass. I hope that he does get fast-track authority, and that the agreement passes. But as anyone who follows the news is also aware, the initial attempt to pass fast-track authority failed in the House of Representatives, because Democrats decided to desert and defy a president from their own party:

House Democrats dealt President Obama a humiliating defeat on his free-trade initiative Friday, derailing a key priority for the president and rebuffing his rare, personal pleas for their support.

The defeat at the hands of his own party placed Obama’s trade agenda in limbo and exposed deep party divisions on economic policy, leaving the pro-trade Democrats marginalized by the anti-corporate wing of the party, which has been on the rise since the 2008 financial collapse. It also exposed the weakening hand of House Minority Leader Nancy Pelosi (D-Calif.), who had worked for days to avoid a Democratic takedown of the president’s agenda, only to throw her support in with the rank-and-file rebellion at the last minute.

The fate of the trade legislation now depends on Obama’s ability, along with business-friendly interests, to persuade dozens of Democrats to switch their votes before a planned do-over vote early next week.

More:

He made it personal. He appealed to their loyalty. He asked them to give him what every modern president has had. He argued the facts, disputed the politics, quarreled over the history and at times lashed out at those who still refused to stand with him.

Yet in the end, after years of frustration with Republicans blocking his ideas in Congress, President Obama on Friday found the most sweeping legislative initiative left on his agenda thwarted not by the opposition but by his own party. If not for his fellow Democrats, Mr. Obama would have a landmark trade bill heading to his desk for signature.

Being the antediluvian entities that they are, big labor unions are more than happy that they got congressional Democrats to sign on to antediluvian trade policies that promote parochial protectionism instead of pro-growth economic policies. To be sure, the president contributed to his own problems by being lazy about lobbying Congress:

“You could always say there coulda, shoulda been more with any president,” [Rep. Gerald E.] Connolly [(D-Va.)] said, when asked if Obama’s lack of attention to lawmakers over the years harmed his chances on trade. “This president’s style is different than Bill Clinton’s. He is who he is. I don’t know if somehow it’s fundamentally flawed. It’s just different.”

[. . .]

Asked by reporters after the vote whether Obama’s trade push came too late, White House press secretary Josh Earnest scoffed.

“I find it hard to believe that the president’s attendance at the 2014 congressional baseball game would have, in any way, contributed to the vote count today,” he said. “I think that the president takes much more seriously members of Congress and their concerns than some analysts do.”

But Obama appeared to be blindsided by Pelosi, who said months ago, during a fact-finding mission to Asia with other lawmakers, that she was “trying to get to yes” on the president’s trade deal. In 2009 and 2010, Obama leaned heavily on her, when she was the House speaker, to help wrestle the Affordable Care Act through Congress with Democratic majorities on a party-line vote.

Maybe if this administration were actually heavily engaged in lobbying Democratic members of Congress on getting the president fast-track authority, the president would not have been “blindsided” by his own House leader. Instead, he might have anticipated her opposition to fast-track authority far more easily and readily. Alas, despite the White House’s claims to the contrary, Barack Obama was not really all that engaged in fighting for fast-track authority. Or if he was, it is clear that he has no pull whatsoever in Congress–not even among members of his own party.

Quite understandably, people in the business community who have–you know–actual responsibilities that don’t allow them to demagogue issues of economic policy, were less-than-pleased by what initially happened in the House:

Though many sought to put the best face on the vote, business groups and chief executives were quick to voice their displeasure with the House’s rejection of aid to workers harmed by imports, which could doom prospects for eventual approval of a wider trade pact.

“This is disappointing and discouraging,” said Todd J. Teske, chief executive of Briggs & Stratton, a 107-year-old manufacturer based in Wauwatosa, Wis. “We do business around the world, and free and fair trade allows the U.S. and our company to be competitive globally.”

[. . .]

Manufacturers have been among the most vocal supporters of what is formally known as the Trans-Pacific Partnership, or T.P.P., but officials from other sectors also made their frustration plain on Friday. David French, senior vice president for the National Retail Federation, called the vote “a victory for those with a narrow agenda that puts petty politics ahead of people, while jeopardizing the futures of millions of men and women in America.”

“It is nothing short of astounding that in the 21st century anyone would think it is in our country’s best interest to sit back and let foreign governments dictate our role in a global marketplace,” he added.

There are very real–and very dangerous–consequences attached to any failure to pass the trade deal:

“If the president cannot get” trade promotion authority “through Congress, it is a disaster for his Asia policy,” said Michael J. Green, a former Asia adviser to President George W. Bush and now at Georgetown University and the Center for Strategic and International Studies. “The administration will be dismissed as lame duck at a time when China is flexing its muscles.”

Moreover, Mr. Green and other analysts said, a failure to follow through on the trade deal would lead to Japan, Vietnam and other putative partners reversing course on economic reforms or tariff concessions required to join the multilateral trade zone with the United States, known as the Trans-Pacific Partnership, or T.P.P. And momentum may shift to economic institutions and agreements that do not include the United States, including the new Asian Infrastructure Investment Bank that China is creating over American resistance.

“Domestically we tend to view trade through a political prism by way of winners and losers,” said Jon Huntsman, a Republican former governor of Utah who served as Mr. Obama’s ambassador to China before mounting a campaign to challenge his re-election in 2012. “In Asia, it’s seen as directly tied to our leadership and commitment to the region. A failed T.P.P. would create an influence vacuum that others, primarily China, would fill.”

See also this post. Back in 2008 and again in 2012, Democrats informed us that if we gave them power in the White House and in Congress, they would give us a foreign policy that would expand our influence through the application of soft power, and win us friends and allies around the world. So much for that promise.

It is worth noting that the key blow inflicted against the trade agreement by Democrats and labor unions was the defeat of trade adjustment assistance. As I have written before, trade adjustment assistance does not work and to invest time and resources in trade adjustment assistance is to waste time and resources. But normally, Democrats and labor unions insist on the presence of trade adjustment assistance in order to ameliorate what they perceive as the negative impact of free trade. It is telling, therefore, that Democrats would vote against trade adjustment assistance–which they and unions normally champion–in order to defeat the Trans-Pacific Partnership. If one really believes that trade adjustment assistance programs are useful in helping workers transition to a new economy, isn’t a vote against trade adjustment assistance also a vote in favor of throwing those very workers under the bus?

Responsible pundits have seen fit–rightfully–to condemn Democratic obstruction on trade:

. . . Powerful domestic interests have opposed free trade from before the U.S. Constitution was ratified and continued to oppose trade deals like Bill Clinton’s NAFTA negotiations in the 1990s. The beneficiaries of free trade—from the jobless who might get jobs, to the low-income consumers who benefit from cheaper products, to the high-poverty regions of the developing world that would benefit from exporting to U.S. consumers—just don’t have the same public relations resources. But although the social media campaign is an anti-TPP rout, its substantive arguments are profoundly at odds with progressive traditions.

Start with the widespread but absurd claim that the TPP is being negotiated “in secret.” The TPP will be public before the U.S. Congress votes to approve it, so our citizens will have legislative review of this agreement. The only constraint is that Congress will have to vote “take it or leave it” rather than offering amendments. This procedural rule reduces domestic lobbying, yes, but it has been used to advance Democratic causes in the past, such as shrinking wasteful military expenses by closing unneeded domestic military bases.

Democrats who argue that the deal should be public now, during negotiations, should consider the precedent that would set. If multilateral negotiations have to take place in front of C-SPAN cameras, international progress would cease on a host of causes Democrats support, from environmental coordination to peace treaties. Outside interests can always publicize certain aspects of the deal and deliver focused public opposition to those specific provisions. Those who claim to seek more transparency are really trying to sabotage the substantive deal itself. That is why Senator Tom Cotton (R-AR) pushed so hard for extensive congressional review of Obama’s nuclear deal with Iran. Indeed, no one on the political left seems to notice the irony that Cotton and AFL-CIO President Richard Trumka are both arguing that Obama should be given less negotiating authority.

What about the claim that the deal violates international sovereignty by creating a separate judicial review procedure? Well, it appears that progressives have forgotten their historic support for the United Nations, or the international criminal court at The Hague, or a whole host of other cross-border agreements. If an international agreement is going to mean anything, it has to come with a dispute resolution mechanism that necessarily gets some authority delegated to an international body. No nation loses any of its ultimate sovereignty, as that delegation can always be revoked; any nation can withdraw from international agreements at any time.

And what about the substance itself? Putting aside the fringe claims, the basic argument is that the TPP opens our markets to countries that damage their environments, as well as underpaying and mistreating their workers. TPP critics claim the deal encourages those foreign nations to keep doing those bad things and hurts U.S. workers by forcing them to compete “unfairly” with nations that do not abide by our environmental and safety rules.

A review of the history, evidence, and social justice of free trade overwhelmingly rebuts those claims.

And then there are the irresponsible pundits, like Paul Krugman, who tries to visit God’s own lightning and thunder upon Republicans when they oppose the Obama administration on some particular policy matter, but whose reaction to Democrats embracing silly and dangerous economic thinking is to approve and say that this is a case of “Democrats Being Democrats.” Recall that Daniel Okrent, the onetime ombudsman of the New York Times, stated that “Krugman has the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults.” With each op-ed column and blog post, Krugman seems bound and determined to prove Okrent right.

Speaking of dishonesty . . .

Former Secretary of State Hillary Clinton, as a candidate for the Democratic presidential nomination, seems reluctant to take a firm position on an issue dividing her party: whether President Obama should have fast-track trading authority for the immense trade deal he has been negotiating, the Trans-Pacific Partnership. With some progressive voters eyeing her with some skepticism, and facing a challenge (such as it is) from candidates on her left, she is being advised to tack in that direction.

President Obama has been pushing hard for the deal, while Democrats in the House of Representatives on Friday revolted and voted against a key part of the legislation. One told me, “there was a very strong concern about the lost jobs and growing income inequality,” adding, pointedly: “Ms. Clinton should take notice.”

She clearly did. After first dodging the issue, on Sunday in Iowa, Clinton said that “the President should listen to and work with his allies in Congress, starting with (House Minority Leader) Nancy Pelosi, who have expressed their concerns about the impact that a weak agreement would have on our workers, to make sure we get the best, strongest deal possible. And if we don’t get it, there should be no deal.”

Clinton said, “there are some specifics in there that could and should be changed. So I am hoping that’s what happens now — let’s take the lemons and turn it into lemonade.”

But as members of the Obama administration can attest, Clinton was one of the leading drivers of the TPP when Secretary of State. Here are 45 instances when she approvingly invoked the trade bill about which she is now expressing concerns:

For the record–and I am sure that everyone knows this already–Hillary Clinton is engaged in flip-flopping. Assuming that our putative next president of the United States will ever deign to allow the press corps to interview her, someone should really ask why Clinton is now opposed to a trade deal that she relentlessly pushed for back when she was secretary of state. More specifically, was the putative next president of the United States being dishonest then, or is she being dishonest now? It is a good thing that presidential candidates like Jeb Bush are being honest and consistent on this issue, and are calling out Hillary Clinton’s dishonesty and inconsistency. But that doesn’t make the dishonesty and inconsistency any less galling.

Finally, to round out this post, let’s note this story:

Congress’ upheaval over trade has exposed turmoil within a House Democratic caucus that’s grown smaller and more liberal in recent years as moderates have been ousted in successive election bloodlettings.

Those who remain must answer to ideologically driven voters and labor unions fighting their own battles for survival, even if it means sidelining their own leaders and humbling their president in the process.

The result is a minority caucus dominated by some of its most liberal members, leaving the few remaining centrists to question whether that will make it harder for their party to retake the seats they need to regain the House majority anytime in the next decade.

Just as the tea party wing of the Republican Party has pulled the entire GOP to the right and hampered attempts at compromise on Capitol Hill, some now fear a similar dynamic is taking shape on the left.

That’s because it is. And I trust that our oh-so-not-biased press corps will be as willing to condemn this sharp and irresponsible lurch to the left as it was to condemn the Republican party for welcoming Tea Partiers in the GOP’s midst. Because to fail to do so is to be hypocritical in the extreme.

(Photo Credit.)