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Why Are Democrats Blocking Obama’s Mega-Trade Deal?

Posted by: 18. May 2015

It seems that every issue that comes before the President of the United Sates is viewed by the electorate through a political lens. In most cases Republicans see it one way and Democrats, the other. In the case of the latest trade agreement, the Trans-Pacific Partnership (TPP), Democrats just handed their own party’s President a rare setback by blocking Obama’s “fast track” authority en route to passage. A few days later, they gave Obama approval to move forward based on Senate Republican's agreement to certain checks before final approval. 

Like most issues that come before Congress and the President, this trade deal is complicated. Because the media reports most topics as if we’re first-graders, both sides of the aisle can easily cherry-pick any number of reasons to back up their opposite opinions. And this trade deal is no different. But when the President is supported by Republicans and opposed by Democrats, and politics as usual is out the window, even the incurious among us should lean in to find out what’s up.

Republicans tend to favor agreements that benefit business owners, while Democrats usually take the side of workers.  Obama’s a Democrat, so why does he support this agreement and why has his own party opposed it?  According to the Obama administration, this deal will benefit American businesses and workers, both. Critics of the deal suggest it may not be that straight forward and that Obama’s support in the face of his own party’s opposition may have something to do with his own legacy.

But now that NAFTA has been in force for 20 years, free trade agreements (FTAs) are considered by most to more directly support the interests of larger corporations than those of workers.  Yet the standard of living for Mexican workers has been elevated considerably, and doesn’t that benefit the United States in many indirect ways? According to the Peterson Institute of International Economics, the TPP would yield $78 billion in net income gains for the U.S. But the Center for Economic and Policy Research predicts that 90 percent of workers in the United States would see a decrease in real wages under the TPP. Obama claims that the U.S. has learned from NAFTA’s mistakes and that the TPP won’t allow environmental, public health, and safety vulnerabilities that have been predicted to occur. Currency manipulation by participating countries in order to gain a trade surplus advantage is also a concern.  But the biggest objection by opponents has to do with the secrecy surrounding negotiations. Though much is known about the deal, exceptional steps have been taken to prevent the public from seeing the details. Senator Elizabeth Warren (D-Mass.) has challenged the President to bring the deal out from behind closed doors so that everyone can see it in order to decide if it really is the good deal Obama claims.

The Republican position on TPP is the same as it is on all trade agreements—thumbs up! On the other side of the aisle, TPP has stirred up unexpected and strong dissent among Democrats usually in lock step with the President.  But remember, the next Presidential election cycle is already under way. Obama is leaving, and Democrats want to replace him with a person or issue they can rally behind with the same enthusiasm that he inspired in his first campaign.  In the wake of the 2008-10 Great Recession, and as the field of contenders begins to coalesce, Democrats believe the widening inequality gap is emerging as the most compelling issue the country faces and one they can exploit at the polls. That’s not to say that the TPP is an obviously good deal for the country and Democrats opposition is pandering to populist sentiment. But the TPP is a very big package with very big, long-range implications that are unclear.  Both its promise and potential peril seem to parallel business opportunities that can win or lose fortunes. Just taking the President’s word for it, is something that even his own party isn’t willing to do when so much is at stake.

Year-old article: Why almost everyone hates the trade deal: http://www.washingtonpost.com/blogs/the-fix/wp/2014/04/23/why-almost-everyone-hates-the-trade-deal-obamas-negotiating-in-japan/

Recent article: Five things you need to know about TPP: http://www.nbcnews.com/news/us-news/five-things-know-about-trans-pacific-partnership-n343671

Most recent update on reversal by Senate to approve Fast Track: http://www.wsj.com/articles/senate-passes-bill-to-toughen-enforcement-of-trade-laws-1431622577

 

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