Senators Orrin Hatch and Ron Wyden have introduced a Senate bill calling for “fast track” Trade Promotion Authority (TPA) along with House Ways and Means Committee Chairman Paul Ryan. A smoldering debate over trade is expected to get even hotter now that Congress has returned from its two-week spring break. Months of closed-door negotiations continue.
[Reposted from Mesquite Local News | Frank Shannon | May 6, 2015]
The Trans-Pacific Partnership has been negotiated in secret for the last five years and now members of Congress are being asked to rubber stamp it. Many feel that is unacceptable. Forces on both sides of the debate are ready for a fight.
There has been some progress at getting legislation passed in the current Congress but this fight may bog down that progress for a while. At least they are finally debating the things that we have been writing about – trade and tax policy.
On tax policy, there are some differences but the vast majority agrees that something must be done and I am sure they will move the code in the right direction. However, the other important issue – trade policy – is where the debate and disagreement is intense with both sides digging in for a fight.
The weeks ahead have all the makings of an epic trade battle not seen in Congress since 2005, when President Bush muscled through an agreement with five Central American countries.
First, we should define the sides, which make for very strange alliances. On the one side we have president Obama, a few Democrats, Paul Ryan and roughly half of Republicans supporting the interests of Wall Street, trans-national corporations and the investor class. On the other side are about 80% of Democrats, and the other half of Republicans who see their jobs as providing a level playing field for domestic manufacturers, farmers and ranchers.
Thinking about these odd alliances, the only conclusion I come to is that this is a battle between those who put American jobs and the U.S. economy ahead of global financial interests and those who don’t.
In the Senate, passage may be achievable because Republicans control the chamber with 54 votes, a majority of whom are expected to vote for the bill. If six to ten Democratic votes can be corralled, that could be enough to put it over the top.
However, passage in the House appears to be unlikely at present. As our House members continue to hear from their constituents, opposition is growing.
Congressman Hardy has discussed this with Paul Ryan, a lead spokesman for passage, and requested Ryan’s logic for not insisting on strong language in the TPA bill to prevent China from manipulating their currency and other protectionist practices.
This must put Ryan in a difficult position since Mitt Romney, his 2012 running mate, campaigned on the fact that we should stand up to China’s cheating on trade. Now Ryan is resisting Mitt’s trade reform language in the most important trade bill in decades.
The critical moment will be when the bill hits the House floor, a test of both the White House’s ability to convince wavering Democrats to support a lame-duck president’s desired legacy achievement and Republican leaders to persuade their members who loathe giving Obama a political victory. Two particularly contentious issues in the TPA/TPP negotiations are:
Currency Manipulation
Opponents of the TPA bill have pushed for China currency legislation to either be part of a package with trade promotion authority or to move in tandem with the Fair Currency bill languishing in committee for years. This would direct the Commerce Department to treat undervalued currencies as an export subsidy so countervailing duties could be imposed on Chinese goods.
The administration claims that would cause trouble with Beijing and backfire on the United States. But Senators Schumer (D-NY) and Rob Portman (R-OH) have joined many others in calling for rules against currency manipulation in the Trans-Pacific Partnership, which the administration opposes.
Dispute Settlement Provision
Another issue likely to stir debate on the Hill is an investor-state dispute settlement provision in the Trans-Pacific Partnership pact. The measure, included in U.S. trade pacts, allows companies or individuals to sue governments for compensation over decisions that damage the value of foreign investments they have made.
This would undermine the rights of Americans to enact certain regulations and hand that over to international tribunals out of the reach of the American voter. This loss of sovereignty needs to be carefully considered before we allow the administration to act too hastily. Proponents reject that charge and say it gives investors some measure of confidence they will be treated fairly when they put millions, if not billions, of dollars at risk in a foreign project.
This would also give protections to international corporations that are not available to domestic businesses. Multinational corporations are increasingly realizing this is an opportunity to gut U.S. regulations they don’t like.
Our elected officials were sent to Washington to protect national interests, not investors, whether foreign or domestic. It is time to insist our leaders focus on America and restore our anemic economy and lost jobs, not to mention, our lost sovereignty.
I agree with Mitt Romney and Donald Trump regarding relations with China and others who abuse us with protectionist trade practices. We need to show some backbone and stand up to them. The best thing we can do for the rest of the world is to be strong economically and be a positive example.
Hopefully, this fight will result in our leadership re-focusing on governing America rather than some silly experiment in global governance or a “New World Order.”
Frank Shannon served in the U.S. Army, was an engineering/operations manager for AT&T for 27 years, was the owner of a small manufacturing business for 23 years, served as Colorado Chair of the Coalition for a Prosperous America and moved to Mesquite in 2013. He is a CPA supporter.
