Top Dem: Obama’s trade push falling short

The Obama administration’s full-court press on trade isn’t racking up enough Democratic votes to move the president’s agenda through Congress, Rep. Sandy Levin (D-Mich.) said Thursday.

Levin, the top Democrat on the House Ways and Means Committee, said Obama’s call for trade promotion authority (TPA) to pave the way for passage of a sweeping Asia-Pacific agreement is falling flat with his own party amid concerns about the deal.

{mosads}Voting down legislation handing Obama TPA, also known as fast-track power, forces a more open conversation on the Trans-Pacific Partnership (TPP) that puts Congress in control of steering labor and environmental portions of the trade deal, Levin argued during a Christian Science Monitor breakfast.

“The answer is to do TPP right and you can’t do it with this TPA,” he said.

Only a small fraction of House Democrats — 10 right now — have publicly said they would back the pending fast-track legislation.

Meanwhile, there are eight Senate Democrats on board with the measure, which is expected to hit the upper chamber’s floor next week.

Levin said he expects a “vigorous” and intense week of debate in the Senate.  

Last week Rep. Paul Ryan (R-Wis.), chairman of the House Ways and Means Committee, said he is “reasonably optimistic” that Congress will back fast-track legislation despite arguments to the contrary.

Trade supporters argue that TPP is of utmost importance to the United States completing its pivot to the Asia-Pacific. Failure to reach an agreement, they argue, could lead to a power drain in the region, with countries depending on the U.S. presence for not only more trade but greater overall stability in the Pacific region.

Proponents argue that without TPP, China will steam ahead of the United States and neutralize the potential overarching geopolitical power borne from an agreement between the 12 nations in the deal.

But Levin argued that the Obama administration is overplaying the importance of writing the trade and geopolitical rules of the Pacific Rim.

While the senator said he understands the TPP’s security aspect, he said “this is a trade agreement.”

“You can’t let the economic issues be overshadowed by security issues,” Levin said.

“Simply to say because of China we need to pass a defective TPP misses the point of the economic issues and overstates the security aspects.”

Meanwhile, 17 former Defense secretaries and retired military leaders, including Donald Rumsfeld, Chuck Hagel and Robert Gates, sent a letter to congressional leaders on Thursday urging them to pass the fast-track legislation that is a catalyst to completing the TPP and moving forward on the Transatlantic Trade and Investment Partnership (TTIP) with the 28-nation European Union.

“While the economic benefits of both these agreements would be substantial, as former Secretaries of Defense and military leaders we believe there is an equally compelling strategic rationale for TPP and TTIP,” they wrote.

Defense Secretary Ashton Carter has been forceful in his desire to see the TPP get done, saying it is “as important to me as another aircraft carrier.”

But Levin said that if the United States is going to write the rules of the Pacific region it should focus on stopping the currency manipulation he says has cost millions of U.S. jobs.

With more openness on currency, an agreement between Congress and the White House could be forged, he said.

But the president and Treasury Secretary Jack Lew have no plans to propose adding currency provisions to any upcoming trade deals over concerns that it would scuttle the agreements.

Instead, they want to keep working through other diplomatic channels to stop the practice that gives countries global trade advantages.

That has sent some lawmakers like Sens. Charles Schumer (D-N.Y.) and Rob Portman (R-Ohio) looking for other legislative outlets for currency provisions.

Levin argued that currency puts the focus on the protection of U.S. jobs, a main concern of liberal Democrats who have called the TPP another bad repeat of past trade policy that led to job losses and wage stagnation for U.S. workers.

Meanwhile, the White House is trying to sell the deal to wary Democrats in both chambers and has produced several recent reports to back up its stance that the United States and other nations must align themselves to ensure China doesn’t grab the biggest slice of the global economic pie.

Jeffrey Sachs, an economist and director of the Earth Institute at Columbia University, criticized a White House trade report released Friday by the Council of Economic Advisers for cherry-picking the benefits of increasing U.S. exports and overlooking who loses if an inadequate TPP deal is brokered.

“It’s naive to talk about only the benefits without talking about the costs,” Sachs said during the breakfast.

“The Council seems to forget that trade and foreign investment flows have costs as well as benefits,” he said.

While the White House’s report argued that U.S. jobs were only off-shored when China struck trade agreements, not when the United States inked deals, Sachs said his view is that there is evidence “that globalization has led to the reallocation of workers away from high-wage manufacturing jobs into other sectors and other occupations, with large declines in wages among workers who switch, explaining the large differences between industry and occupational analyses.”  

“While other research has focused primarily on China’s trade, we find that offshoring to China has also contributed to wage declines among U.S. workers,” Sachs said at the breakfast.

Levin said he was “deeply, deeply concerned” by the report, saying that while he believes trade should be expanded, “we need to look at its consequences.”

Sachs and Levin also each expressed concerns about investor-state dispute settlement (ISDS) provisions included in the trade deals.

The Obama administration is trying to tamp down concern over how the system works, but Sachs said that legal scholars argue the provisions are cause for alarm.

Sachs said the ISDS policy is being used more aggressively worldwide and “it’s coming our way.”

Sen. Elizabeth Warren (D-Mass.) has raised the specter that the trade deal could lead to problems because it would allow foreign companies to challenge U.S. laws and win big settlements outside of the court system.

“With the number of ISDS cases exploding and more and more multinational corporations headquartered abroad, it is only a matter of time before such a challenge does serious damage here,” she wrote in a recent Washington Post op-ed.

“Replacing the U.S. legal system with a complex and unnecessary alternative — on the assumption that nothing could possibly go wrong — seems like a really bad idea.” 

Tags Chuck Hagel Chuck Schumer Elizabeth Warren Jack Lew Paul Ryan Rob Portman

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