Finance

Democrats abandon Obama on free trade

The new Republican Senate came through and 62 Republicans and Democrats voted for the Keystone XL oil pipeline proposed from Canada to existing pipe systems in the South. It will move unprocessed shale oil to refineries on the Gulf of Mexico. Yes, President Obama says he will veto the final bill when it arrives in the White House.

Interesting, because the president’s own State Department has recommended approval of Keystone construction for two reasons. No. 1, the project has the possibility of creating 42,000 direct and indirect American jobs; No. 2, the pipeline does not pose significant environmental problems.

{mosads}The American public overwhelmingly supports Keystone. So why would the president ignore public opinion? He does so because his basic philosophy motivates him to be against anything to do with fossil fuels. Despite his basic prejudice against oil, however, he hypocritically brags that oil production has gone up under his presidency when, in fact, oil permits and production on federal property have gone down — way down — since he entered the White House.

Opponents of the project range from ultra-leftists who hate private enterprise of any sort to environmentalists who believe oil dooms the world and Senate minority nitpickers who tried to amend the Keystone bill in the Senate with 41 proposed amendments, most of which were designed to kill the project (to be poison pills). For example, one amendment proposed that all oil refined from the Canadian oil fields that transits the pipeline be used exclusively in the United States. As another example, Sen. Al Franken (D) of Minnesota proposed an amendment that would have required construction to use American-made steel rather than any imported from another country (probably South Korea).

These and most of the other proposed and defeated amendments were designed to go around free-market purchases, free-market competitive bidding principles and free-market sales to the highest bidder. All this was designed to hamstring and make more expensive a project paid for by a foreign company trying to do business in free-enterprise America.

One more hypocritical move is Obama’s announcement that he recommends deep water exploration off Atlantic states. He really doesn’t want that; anyone who says he does is making false statements.

Keystone has passed both houses; it only needs reconciliation of the two bills, a new vote and then it will go to the president. If he vetoes it, Keystone will be attached to bill after bill until he is forced to sign it into law or he won’t have a budget to pay all his Schedule-C Democratic appointees that permeate the federal government at mid-levels.

On the other side of the coin, Obama absolutely needs Republican support if he is to pass a successful free trade bill through Congress; it is the proposed Trans-Pacific Partnership with almost every country on the Pacific Rim, from Chile in South America to Singapore on the other side of the Pacific, and includes what used to be called the “tigers” of Asia: Japan, South Korea, Taiwan, Singapore, Malaysia and Vietnam — all except China.

This proposed agreement-to-be covers countries that total 40 percent of the world’s gross domestic product (GDP) and one-third of the world’s trade. The key country, of course, is the United States of America, because we are the largest trading nation in the world and our market is prized by every exporting country in the world.

Anyone who remembers the fight for the North American Free Trade Agreement (NAFTA) in 1993 will recognize the arguments used against Obama’s proposed trade deal with the Pacific Rim countries.

They are: American jobs will leave the U.S. and go to the partner countries; American industries will be hurt or destroyed by products produced by cheaper labor and less-restrictive work and environmental rules. Underlying these objections are the same ones that were so obvious in the NAFTA argument by the AFL/CIO, Jesse Jackson, Pat Buchanan and infamous ersatz presidential candidate Ross Perot – the “Halloween Coalition.” Bigotry in the NAFTA case was aimed by the Halloween Coalition at Mexico and Mexicans, not NAFTA partner Canada. It denied it, but the arguments used were specious by any measurement.

In this case, most of the proposed partner countries are Latin American or Asian. Is there a clue there?

The final agreement is not being protested; it doesn’t yet exist.

It is the process that is being protested because the process used by the president and trade supporters is the traditional trade deal process: the president negotiates a deal (the Constitution permits only the president to negotiate with other countries) and then presents it to Congress (as the Constitution mandates Congress to regulate foreign commerce) for an up-or-down vote with no amendments allowed. This is called the “fast track” process.

Once the agreement is completed, it will be sent to Congress for the up-or-down vote. As it is not a treaty (it is an executive agreement), only simple majorities are needed for passage.

For the Trans-Pacific Partnership, President Obama needs every one of those Republicans that voted for Keystone. Is there a deal to be made here?

Contreras formerly wrote for the New American News Service of The New York Times.

Tags Al Franken Keystone XL pipeline Nafta North American Free Trade Agreement TPP Trade Trans-Pacific Partnership
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