What is truly at stake with TPA and TPP?

Some members of Congress have been far too cavalier in recent statements about TPA (fast track authority) and TPP (the TransPacific Partnership negotiation).   For example, Sen. Warren (D-Mass.) recently said that “the government doesn’t want you to read this massive new agreement.”  That’s nonsense.  There is no agreement to be read, for the TPP negotiation is still underway.  But she can read what’s now there in tentative language, simply by paying a visit to the Office of the U.S. Trade Representative. 

Other members have suggested that President Obama should publicly release the negotiating text.  One can imagine the chaos that would cause with the other 11 countries with which the U.S. is negotiating.  It would likely torpedo the negotiation, which may be what the critics have in mind. 

Rep. Chris Van Hollen (D-Md.) says that a TPP agreement “that allows for investor lawsuits could undermine a government’s right to regulate in the public interest and involve the U.S. in costly and detrimental lawsuits covered by American taxpayers.” 

That in no way accurately represents the investment language being advocated by the U.S. in these negotiations.  The primary function of these provisions, already included in scores of bilateral investment treaties and free trade agreements, is to protect American investment abroad.  We treat foreign investors fairly; not all countries do.  While critics regularly demonize NAFTA, the reality is the U.S. has never lost an investment dispute under NAFTA. 

Members of Congress regularly criticize the administration for insufficient coordination with the Congress during trade negotiations.  But Ambassador Froman and his USTR negotiating team have spent countless hours with the trade committees during the years this negotiation has been underway.   One wonders whether they could have done much more without becoming a nuisance on Capitol Hill. 

Some of my Republican friends feel TPA would give the White House too much authority in the negotiating process.  They also lack confidence in President Obama as a negotiator.  But TPP is being negotiated by Ambassador Froman and his outstanding team of civil servants at USTR.  They need fast track authority only because trade agreements should not be subject to amendment by 525 members of Congress.  But granting such authority to the administration in no way precludes Congress from rejecting TPP’s final work product should it be in the best interest of this country to do so. 

Much of the negative commentary on both TPA and TPP is inaccurate, misleading, and sometimes disingenuous.  The Congress should put it aside and concentrate on what is relevant and meaningful in this debate. 

What we do know is that in the absence of TPA there will be no TPP, and there’ll be no U.S. trade agreements of any consequence for years to come.  That might not affect my generation very much, but it would be devastating for our children and grandchildren. 

Sen. Schumer (D-N.Y.) said: “I don’t believe in these agreements anymore.”  One must then ask, “Without trade agreements, just where are we to sell American goods and services in the future?”  If the answer is, “Here in the U.S.” then we’ve reduced our potential marketplace from seven billion people to less than 400 million.   And we’ve handed trade leadership in this world to China on a silver platter.

One huge benefit to the U.S. of a successful TPP is that those on the inside (i.e., the 12 participating nations) reap trade advantages unavailable to those on the outside (China, Brazil, India and Russia for example).  In strategic terms that is reflected in our “tilt toward Asia,” but notably toward only certain portions of Asia.  TPP participants are countries prepared to commit to more open markets.  They include some of the major democracies in Asia, and some of our closest security allies (Japan, Australia, and New Zealand). 

A successful TPP will significantly enhance the global competitiveness of the 12 participants vis-à-vis the rest of the world, with the U.S. benefiting more than anyone.    We’re already globally competitive in services and agriculture, and TPP will give those fast growing areas of our economy a further boost.   It’ll brighten our manufacturing picture too, where incredible advances in technology are already causing production and jobs to return home.   The determinant is not the cost of labor, but its productivity.  

China has thrown down a global challenge to the U.S. in trade.  We can either meet it head-on, or sulk and back away.   During my career I have watched American business and agricultural firms confront foreign competition, and match or exceed it with vigor, strength, competence, entrepreneurship, and the American spirit.  Let us not abandon any of that, for there is no reason to do so.

Both TPA and TPP are elements of a winning trade strategy.  What we must do is get on with it.   The present “window of opportunity” will close soon.  Prime Minister Abe has courageously asserted his intent to open Japan’s highly protected agricultural markets.  This is a major key to wrapping up TPP, and we should take advantage of Abe’s political momentum.   Japanese prime ministers typically do not have lengthy tenures!

That calls for getting TPA done quickly, while also extending trade adjustment assistance (TAA), followed by fully supporting Ambassador Froman and his USTR team in bringing TPP to a successful conclusion – all in the next few months. 

Yeutter served as U.S. Trade Representative under President Ronald Reagan (1985-89) and was the 23rd U.S. Secretary of Agriculture under President George H.W. Bush (1989-91).   He earlier had served as president and CEO of the Chicago Mercantile Exchange (1978-85).  He is currently a senior adviser with the international law firm of Hogan Lovells.

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