Will: Obama needs GOP for trade pact
Michael Froman received from a Harvard Law School classmate, Barack Obama, a job that validates the axiom that the unlikelihood of any negotiation reaching agreement grows by the square of the number of parties involved. In trade negotiations, even one’s own country is troublesome, as the catfish conundrum illustrates. And the degree of difficulty in achieving a free trade pact is proportional to the number of Democrats in Congress.
As U.S. trade representative, Froman’s goal is completion and ratification of the Trans-Pacific Partnership involving the United States and 11 Asia-Pacific nations, from Chile to South Korea, who generate 37 percent of the world’s economic product. The TPP aims not just to liberalize trade but to reform some of these nations’ domestic policies, particularly concerning labor and environmental issues, partly to entice certain Democratic constituencies to soften their opposition to free trade.
Some developing nations, such as Vietnam, welcome some compulsory rationality — being required by trading rules to limit subsidies to sclerotic state-owned enterprises. But beware of protectionism with moral pretensions. Sometimes poorer nations want higher standards forced on them.
Negotiation and ratification of TPP will be easier if Congress gives Obama what prior presidents have received — “fast track” authority guaranteeing an up-or-down vote on the agreement without amendments. But Obama’s aggressive aggrandizement of executive power through unilateral actions (regarding the Affordable Care Act, immigration, etc.) has been unprecedented in its sweep and undisguised in its disdain for Congress. This has produced the much-praised but elusive joy of bipartisanship: Conservative Republicans, eager to express separation of powers rectitude, are joining liberal Democrats, eager to derail any agreement, in opposing fast track.
The administration is confident there will be enough Democratic votes to join with large majorities of Republicans to ratify what is negotiated, even without fast track.
The two largest achievements during Bill Clinton’s presidency occurred in spite of Democrats. Welfare reform was forced upon him by a Republican-controlled Congress, and the North American Free Trade Agreement was ratified in spite of congressional Democrats. Now, TPP depends on Republicans.
Democrats are plucking up the protectionist banner unfurled by 19th-century Republicans. Today, many Democrats agree with Connecticut’s Rep. Rosa DeLauro, who says America “has lost 5 million manufacturing jobs since NAFTA.” Notice the slippery language (“since NAFTA”) and remember the post hoc ergo propter hoc fallacy: The rooster crows and then the sun rises, therefore the crowing caused the sunrise. Manufacturing jobs have been declining as a share of total employment since 1950 and in actual number since 1979. But because of productivity improvements, manufacturing production and exports are near all-time highs.
Some imports, Froman says, substitute for domestic products. But many imports are “intermediate goods” that go into the production of domestic goods, some of which are exported. And, he says, 50 percent of imports from Canada and Mexico, our first and third largest trading partners, are used as inputs in the manufacturing of American products. Furthermore, Froman says, free trade is progressive in the sense that lower-income Americans spend a larger portion of their disposable income than more affluent Americans spend on such imports as food and clothing.
Those reading this column probably have a trade deficit with their barber or hair dresser. You regularly buy what he or she sells yet he or she never buys anything from you. But things somehow work out. As they do between nations, because as the late Robert Bartley, editor of the Wall Street Journal’s editorial page, once wrote, “International transactions are always in balance, by definition.”
George Will writes for the Washington Post.