by Mitch Kokai
Senior Political Analyst, John Locke Foundation
U.S. Trade Representative Michael Froman is reaching the end of negotiations over the Trans-Pacific Partnership, a free-trade agreement almost five years in the making. The accord would wrap the U.S., Japan, and 10 other Pacific Rim countries into a humongous free-trade zone with almost 800 million consumers and 40 percent of global output. It could increase U.S. exports by $78 billion a year and create hundreds of thousands of U.S. jobs over the next decade. Yet a deal won’t happen unless Congress soon gives President Obama fast-track authority, also called trade-promotion authority, which lets the president submit a treaty for a straight up-or-down vote.
Without fast-track authority, the U.S. won’t be able to negotiate the deal on favorable terms, and then Congress won’t approve it. That could sideline free-trade talks between the U.S. and the European Union, as well as efforts to write a much-needed global rulebook for trade in services.
If those initiatives fall apart, countries will most likely resort to narrow, two-way deals that put U.S. exporters at a disadvantage. Asians will have another reason to scoff at the notion of a U.S. pivot toward them. U.S. credit card companies and insurers will continue to be barred from some countries. Malaysia will maintain steep tariffs to keep out American-made cars, and Canada will keep protecting its dairy industry with tariffs of 250 percent on U.S. imports.
Congress’s thinking on fast-track authority is puzzling even by that body’s standards. Democrats resist the idea because they blame trade for job losses; Republicans resist it because they say Obama is a bad negotiator. In both cases, denying the president this authority—no major trade pact has been approved without it—only makes their apprehensions come true.