Would the Trans-Pacific Partnership Really be Free Trade?

May 7, 2015
Rather than benefit the US, say critics, the Trans-Pacific Partnership Agreement would increase the trade deficit and fail to address longstanding concerns such as foreign currency manipulation.

Free trade ─ what does this mean? Businessdictionary.com defines it as "The interchange of goods and services (but not of capital or labor) unhindered by high tariffs, nontariff barriers (such as quotas), and onerous or unilateral requirements or processes." By this definition, would the Trans-Pacific Partnership really be free trade?

Last week, Rep. Tom McClintock, R-Calif., gave a speech in support of passing the Trade Promotion Authority, aka "Fast Track Authority," saying, "Every nation that engages in trade prospers from it. Every nation that fails to trade, fails to prosper…It is freedom that produces prosperity – the free exchange of goods between people and between nations for their mutual betterment. The greater the freedom, the greater the prosperity."

This is only true if the nation benefits from the trade by exporting more than it imports. In 2014, the U. S. imported $2.34 trillion in goods compared to exporting $1.62 trillion in goods, resulting in a trade deficit of $721.6 billion. Because we have a surplus in exports of services, our total trade deficit was reduced to $505 billion. It seems to me that we are not benefiting from our current trade agreements as we should and that another trade agreement with 11 more countries would only make our trade deficit much worse.

Rep. McClintock argued that "…since the 1930’s, Congress has chosen to exercise its responsibility by establishing the broad terms of the agreement it seeks and then giving explicit instructions to our negotiators at the beginning of the process. IF, and only IF, these objectives are advanced in the agreement, Congress will then consider it as a whole package and either approve it or reject it.”

It seems to me that we are not benefiting from our current trade agreements as we should and that another trade agreement with 11 more countries would only make our trade deficit much worse."

McClintock said, "That process is now called ‘Trade Promotion Authority.’ It has stood the test of time, has been used to the great benefit of our nation in the past and has never been controversial until now… It is precisely because of this mistrust that the Trade Promotion Authority sets forth some 150 objectives that must be advanced before Congress will even consider the resulting agreement. And once those objectives are attained, a majority of the Congress must still approve it."

What is wrong with this argument is that the Trans-Pacific Partnership Agreement has been in negotiation for five years without any involvement by Congress; it is not at the beginning of the process. Rep. McClintock seems to mistakenly believe Congress retains the power to direct the President’s negotiations when in fact there is only one more round of negotiations scheduled.

Rep. McClintock wrongly asserts that Congress set forth 150 negotiating objectives in the TPA that the president “must” comply with. This statement is not true. None of the objectives are binding and most are simply vague aspirations of global goals. Indeed, the House Ways and Means Committee firmly rejected any efforts to make the negotiating objectives binding.

The president also is empowered to unilaterally draft “implementing legislation” that will change U.S. laws and regulations to comply with the agreement he negotiated. Through the TPA, Congress even limits its own ability to debate, and prevents its ability to amend, the implementing legislation.

The Obama administration made the draft text of the agreement classified and has kept it hidden from public view, making it illegal for the press, experts, advocates or the general public to review the text of this agreement. Even Congressional members can only view it at the office of the U. S. Trade Representative without pen, pencil, paper or a camera to take a picture of any pages. They are also prohibited by law from discussing the specifics of the text in public.

This is why on April 25th Sens. Sherrod Brown and Elizabeth Warren wrote President Obama a letter stating, "We write to request that you promptly declassify the latest bracketed negotiating text of the TPP and release it publicly before asking Congress to vote on ‘fast track’ authority to facilitate the TPP’s ratification."

They add, "Because the negotiations are largely complete, there is no reason the TPP must remain secret from the American people before Congress votes on fast track authority. In 2001, President George W. Bush made public a draft of the scrubbed bracketed text of the Free Trade Area of the Americans (“FTAA”) agreement several months before Congress granted partial fast track authority to facilitate ratification of that deal."

They conclude, "We have an additional concern: the fast track legislation currently under consideration goes far beyond the TPP. Fast track, as currently written, would preclude Congress from amending or filibustering any trade agreement submitted to this Congress or any future Congress—potentially through 2021."

Their concerns are shared by Rep. Dan Lipinski, D-Ill., who has introduced "the Truth, Transparency, Accountability, and Fairness in Trade Act to protect American workers being harmed by foreign trade agreements." His bill would require "the Executive Branch to review and report on the operation of existing trade agreements to determine whether American jobs and exports are being negatively impacted. If negative impact is found, any Member of Congress would have the right to submit a ‘termination bill,’ which would have expedited consideration and allow for the cancellation of some or all of the trade agreement causing damage. After passage of a termination bill, any renegotiated agreement would be barred from being considered under Trade Promotion Authority (the fast-track process)."

It is not just Democrats that are opposed to the Trade Promotion Authority bill. Sen. Jeff Sessions, R-Ala., expressed his concerns about the Trade Promotion authority in an interview on the John Fredericks Radio Show on April 23. He subsequently released a critical alert of his Top Five Concerns with Trade Promotion Authority.

"Conservatives like Reps. Walter Jones and Duncan Hunter have said they oppose the measure, wary of giving the White House any more authority. At the end of last year, 19 House Republicans signed a letter calling on their colleagues not to pass TPA in the lame-duck session."

At www.obamatrade.com, you can listen to several conservatives urging Republican congressional representatives to oppose the Trade Promotion Authority, including TV host Lou Dobbs, Frank Gaffney, president of the Center for Security Policy, former UN Ambassador Alan Keyes, Niger Innis, executive director of TheTeaParty.net, Richard Manning, president of Americans for Limited Government, and Sandy Rios of American Family Association. The American Family Association is part of a broad coalition of conservative organizations urging Congress to reject granting President Obama “fast track” power. Author and talk show host Mark Levin says no conservative should support Fast Track “Trade Promotion Authority.”

Michael Stumo, CEO of the Coalition for a Prosperous America, stated, "The minority staff of the House Ways and Means released a side by side comparison of this week's Fast Track bill with the bill from January 2014. Basically it is more of the same. Will they never learn? From CPA’s perspective, the new bill is a failure."

The new bill does not have any enforceable provision to address foreign currency manipulation. It does not address the foreign border adjustable taxes (VATs), which are tariffs by another name. It has insufficient language to address the problem of government subsidies to state-owned enterprises. It allows the Investor State Dispute Resolution to be handled by foreign tribunals without providing a rationale as to why the U. S. court systems are not good enough.

For these reasons and other reasons mentioned in my previous article, "What Would be the Impact of the Trans Pacific Partnership Agreement?" this agreement is the opposite of free trade. It is government-controlled trade and is so overreaching on non-trade issues that it would control many aspects of the lives of all Americans, not just businesses.

The Trade Promotion bill passed the House Ways and Means Committee and the Senate Finance Committee on April 22nd and 23rd. It could be brought up for a vote in the full House and Senate any time after Congress gets back from this week's recess. Time is of the essence! Don't give up your freedom! Tell your representatives in Congress to vote NO on Fast Track.

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