TPA: The weird disconnect between Congress and America

Trade Promotion Authority, authorizing the president to complete two major trade negotiations—the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP)– has been hotly contested both in Congress and among the many groups with a stake in the global trading system. Industry in general has been strongly supportive of TPA and the trade agreements under negotiation.  Labor and parts of civil society– notably certain environmental groups– have opposed it with varying degrees of intensity.

In contrast, the American people, according to a series of Pew Research surveys over the past two years, see trade as a positive at a rate of 2:1 over those who see it negatively. Middle class respondents are the most supportive. Ironically, Democrats are more supportive of trade than Republicans. Democrats across the nation are much more supportive of trade and Trans-Pacific Partnership negotiation and the Trans-Atlantic Trade and Investment Partnership negotiation than their representatives in Congress. 

{mosads}The majority of Americans clearly recognize the broad benefits of active engagement in a global economy.  Trade agreements are about more than jobs and supporting higher wages.  Americans understand full well that trade agreements are about creating an open, rules-based trading system that is the foundation for the international commerce, economic growth, and prosperity for Americans.  They get the broader role of trade in economic growth in the market system the United States has been constructing for the past 70 years.

It is clear that most American citizens understand modern economics better than the narrow interests opposing the trade deals the TPA will authorize.  Americans recognize the dynamic nature of global competition and the remarkable success of our own economy in it.  American business excels because it faces competition on a global scale.  Manufacturing in the U.S. is growing, but not as rapidly as the service-oriented and creativity-based sectors of the economy.  The exploding Asian middle-class offers a vast new market for high-tech American products.  The trade agreements that can flow from a successful TPA will more effectively open those consumers to American business.

Importantly, our recent trade agreements are specifically designed to incorporate the 21st century nature of American high-technology commerce.  Modern trade agreements are critical to sustaining a supportive global commercial system—writing the rules, as President Obama describes it—with an eye to free markets and the rule of law.  TPP, for instance, will address a number of technical issues critical to American business, such as (1) expanding the information technology agreement; (2) assuring no restrictions on cross border data flows, including in-country processing and storage requirements; (3) securing reciprocal market access in government procurement; (4) enhancing protection of trade secrets; and (5) restricting source code disclosure for commercial encryption items.

Americans appear to understand this better than their representatives.  This disconnect seems especially odd in my newly adopted state of California.  California boasts the 3rd and 4th largest exporting regions in the United States.  In 2013, more than $54 billion in exports flowed from the San Francisco Bay Area alone, supporting 378,000 jobs. Technology accounted for almost 50 percent of the region’s global exports.  Technology-intensive goods are expected to account for 17 percent of the total growth in U.S. export goods through 2020, and to become the largest single contributor to U.S. trade growth. 
 Bay Area technology exports are expected to increase by almost 20 percent in the next two years.  The Bay Area Council Economic Institute projects that number will grow to nearly $30 billion in technology exports by the end of 2016. 
 Fifty-nine percent of Bay Area companies report an increasing share of revenues are coming from global markets.  Most of these revenues flow from Asia.  The TPP addresses complex and critical rules needed to ensure open and fair competition essential to the vast bulk of American commerce. An open, rules-based system is especially important to small and medium sized enterprises trying to compete in global export markets.

It is quite clear that Americans see the value of trade differently than their representatives in Congress. It seems certain that Americans in general have a much better perspective on the important role of trade agreements to set the rules for international commerce in an increasingly knowledge-based, high-tech economy.  Members of Congress regularly express their deep concern for their constituents’ when casting votes.  Passing TPA is a good chance to prove it. TPP and TTIP are important initiatives that will further open Asia’s rapidly growing markets to American business, strengthen American leadership in Asia and our partnership with Europe, raise environmental and labor standards, and help create high-paying jobs. American’s recognize it; Democrats even more than Republicans.  It’s time for Congress to reconnect.

Rogowsky is a professor of Trade and Diplomacy, Middlebury Institute of International Studies; adjunct professor, School of Foreign Service; and former chief economist, U.S. International Trade Commission. 


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