Trans-Pacific Partnership, or TPP. It sounds like a great idea on the surface of it – lower trade barriers and require trade partners to improve working conditions in developing nations. There’s only one problem with it – no one knows what it is. That’s partly due to it being negotiated in secret and partly due to the fact that the negotiations are not done.
But many are against it for a wide array of reasons that span left and right. On the right, there is a good chance the sovereignty of the US will be diminished based on treaty obligations that, based on discussion, reach very far. On the left there seems to be yet another assault on good US jobs. And that secrecy? There are rumors that it will remain secret long after the treaty is passed.
It’s time to take a step back and sort out what TPP is and what is actually true about it.
The TPP itself is a trade deal being negotiated between nine nations – Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the United States. It has been hailed as the most far reaching and comprehensive such deal ever negotiated, and it has been more than 10 years in the works.
There is no deal yet, but there is a framework with five key points:
- Elimination of tariffs,
- Regional agreement on job and standard of living goals,
- Regulatory “coherence” between nations,
- Promotion of investment, and
- To continue talking to improve conditions.
The votes in Congress are not on the TPP itself. What is being voted on right now are two completely separate things that are intended to make the TPP possible. These are:
Trade Promotion Authority (TPA): Also known as “fast track” approval, it is the authorization given to the Executive Branch (President, et al) to negotiate a treaty while guaranteeing that the final result will come to a “yes or no” vote with no amendments. This is important for trade because any amendments would have to be approved by the other treaty partners – a nearly impossible task in a complex trade deal. So there is no point in continuing without TPA.
Trade Adjustment Assistance (TAA): This is a program that existed from 1962 until it was allowed to lapse in 2014 that provided direct compensation to companies and workers who lost out because of free trade agreements. In 2011, strangely the last year with good data, $279M was paid out, primarily to workers who lost their jobs in key industries that were affected by free trade agreements. Senate Democrats insisted on reinstating this in order to pass TPA.
What has failed in the US House is the re-authorization of TAA, something which was required by many Democrats for their vote. It doesn’t mean much given that they just passed TPA and are sending it on to the Senate without TAA. President Obama and staff may get the authorization to continue negotiating TPP if Senate Democrats don’t split off on a “naked” TPA bill without TAA.
Critics are keeping up the fight through all the machinations. Robert Reich has declared that TPP is dying a slow death despite the Herculean efforts to keep it alive. The reason, he cites, is that Americans no longer see free trade favorably. He has a good reason why this may be true, and it’s worth reading (like everything on his blog).
There are polls that back that opinion, especially an NBC/WSJ poll last November which asked, “Has free trade helped or hurt the US?” The result was 30% saying “helped” and 38% saying “hurt”, with 23% “no difference”. But these numbers bounced back recently, with “helped” winning 37-31 in April 2015. Other polls confirm that Americans do still back free trade – just not as eagerly as they used to.
There is evidence that free trade, under the wrong conditions, does kill American jobs. A 2012 report from the Federal Reserve showed that Chinese imports probably took about 2M US manufacturing jobs, a decent cut of the roughly 5M lost between 2000 and 2010. That would mean that the unemployment rate would be about 4.2% right now and we’d be talking about tight labor markets. Nevermind that manufacturing jobs are good jobs that pay well and allow workers a lot more room to grow than many service related jobs.
Is that why TPP has to be negotiated in secret? The short answer is that all trade deals are negotiated in secret, but this large deal has dragged out longer than most and apparently is getting more complicated all the time. And no, a treaty cannot be passed in secret, so don’t believe those stories. The secrecy surrounding TPP may be a bit tighter than usual, but this is standard procedure for these things.
So if we don’t know what’s in the treaty and free trade is known to kill jobs, why should we allow it to continue? The short answer is that a guaranteed up or down vote does not mean that TPP is going to sail through the Senate and pass. Opposition comes primarily from people who really don’t care what the treaty contains because they have no use for free trade agreements in the first place. They do have a point, and they do have increasing public support.
Should TPA and TAA be passed to allow this treaty to be negotiated? The President has assured everyone that this is going to be the most progressive trade bill yet, guaranteeing a lot of minimum standards and real progress in living conditions in developing nations. That’s why it has to be so secret, he argues – the details reach deep into the operations of all the nations involved.
That appears just be enough of a guarantee to upset those who are worried more about sovereignty to the point where they join those worried about losing jobs. Hence the odd left-right alignment against TPA and TAA in the US House.
It does appear that TPP, or whatever is needed to authorize it, will indeed die a slow death in this climate. We get so little done on far more obvious things that even if TPP turns out to be a good idea after all it’s very unlikely to pass no matter what. If that means we have to step back and think a lot harder about trade, treaties, and how we relate to the world before starting again then so be it. It’s far from the only difficult issue that we’re hardly dealing with.