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Some good news for most Americans: Free trade agreements, which have been negotiated in such deep secrecy that even Congress does not know what they contain, will not be rushed through the Senate.
In a rebuke to the White House, Senate Majority Leader Harry Reid of Nevada on Wednesday rejected the so-called fast track approval of trade agreements. President Barack Obama wanted an extension of the rule that requires a simple up or down vote on treaties — no modifications allowed — which means perfunctory debate.
Reid’s declaration is especially significant for two massive imminent deals, the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership. These deals would add hundreds of thousands of pages of finely detailed new rules on how goods and services cross borders. Just how many pages there are is as much of a mystery as just what those rules would be, with the exception of one leaked chapter from TPP on intellectual property. It runs 30,000 words.
Although we hear all the time about how much regulations thwart businesses, companies are the source of most regulations. Corporations spend vast sums on lawyers, lobbyists and other experts to add and revise government regulations, which can be fashioned to damage competitors, insulate markets from new firms, weaken labor and create barriers to litigation when companies cause harm.
As for companies too small to participate in the negotiations, they would have almost no chance under fast track to learn how they might be affected or to lobby for fairer rules.
Similarly, consumer organizations and unions must criticize without knowing what is in the proposed trade deals and what consequences will likely follow once the deals are locked into law.
If Reid stands firm, it means new trade deals are likely to be worked out in the open, where the people and their elected politicians can debate the merits. In other words, it will be a victory for democracy.
Opinions on Reid’s decision varied among the biggest players in manufacturing and industrial unions.
“Good call by Harry,” Leo Gerard, president of the United Steelworkers, told me. The steelworkers, the most progressive industrial union, with members in many basic industries beyond steel, got to see the initial proposals but were not at the negotiating table even though the trade agreement would significantly affect its 850,000 working members.
On the other hand, Reid’s statements disappointed the National Association of Manufacturers. Linda Dempsey, its vice president for international economic affairs, said the NAM was not surprised by Reid’s action, adding that “manufacturers need a much more robust U.S. trade policy ... to sustain and grow manufacturing jobs here in the U.S.”
Dempsey called fast tracking, formally known as trade promotion authority, “absolutely critical” to increasing trade with countries beyond the 20 with which the U.S. now has agreements.
Michael Stumo, who heads the Coalition for a Prosperous America had a more nuanced view. His organization consists in good part of manufacturers and agriculture companies but mostly domestic rather than multinational firms.
Public debate is the standard America should promote because open and responsive accountability to the people is our true heritage.
“Congress should handle trade agreements — what are really global governance agreements — through the regular order,” he says. “Congress should retain its ability to analyze, debate and amend the trade agreements just like they do any other bill.”
The coalition favors trade, but its focus is not on the volume of trade but on balancing exports and imports.
“Balanced trade will grow our gross domestic product,” Stumo said. “The increased trade goal approach has resulted in record trade deficits that have shrunk the economy.”
The numbers bear him out. Since 1992, imported goods have been growing three times faster than exports.
In 1992, the year before the North American Free Trade Agreement with Canada and Mexico was approved and two years before it took effect, the U.S. ran a trade deficit in goods. In 2013 dollars, the deficit came to $140 billion, mostly because of imported oil and natural gas.
That deficit has ballooned since then. In the first 11 months of 2013 it was $633 billion, Census data show. That was down from $753.7 billion for all of 2011, in large part because the United States is producing so much more of its own oil and natural gas.
The more recent trade deal between the U.S. and South Korea has also resulted in an explosion of imports from Seoul but only a trickle of increased exports. Adding trade in services does not overcome all the red ink the goods data.
Protecting the republic
To be sure, public debate on trade policy will not be fast or easy. The process is sure to be slow and contentious. But the idea of our Constitution is that power should be checked and balanced. The framers designed a system that was slow to approve changes, giving time to reveal flaws in ideas before they became foundations doomed to collapse, while good ideas would withstand the pressure of scrutiny before becoming law.
Treaties, once signed by a president, with the consent of two-thirds of the Senate, become the supreme law of the land. That is important because of rumors that the TPP would expand the existing ability of foreign companies to sue U.S. firms for damages and to attack U.S. environmental, labor and safety laws.
History is not on the side of such agreements. The United States’ existing free trade deals have been economic disasters, especially for working-class people, who have watched their jobs disappear or move overseas as global level companies reduced domestic manufacturing. They are not about free trade at all but about carefully managing the rules to benefit those who have lobbyists at the closed-door meetings where the detailed regulations are written.
More than a decade ago, former Attorney General Edwin Meese — now a senior fellow emeritus at the Heritage Foundation, a conservative think tank — argued against public debate on trade deals, a policy that Heritage continues to promote. Without fast track approval, “the president is denied an equal footing when he attempts to negotiate trade agreements on behalf of America,” Meese wrote. Heritage cited his argument just this week.
What Meese and Heritage want is for the United States to lower its standards to those of dictators. Public debate, with a bright spotlight so no corner is in shadows, is the standard America should promote because open and responsive accountability to the people is our true heritage.
The United States is not a weak party in trade negotiations. It is the biggest market in the world and, at least for now, its technological prowess is enormous. It is others who want access to our markets as much as we would like to ease our access to theirs.
If the terms of the proposed Pacific and Atlantic trade deals are sound, they will withstand public scrutiny and the slow, deliberate process that the framers put in our Constitution to protect the republic from not only rash actions but those who would tilt economic playing field to favor themselves.