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Tangling Over Trade

Tangling Over Trade

By Emily Cadei

President Barack Obama attends the Trans-Pacific Partnership (TPP) meeting at the ASEAN Summit at Peace Palace in Phnom Penh, Cambodia, Nov. 20, 2012. Taking part in the meeting, clockwise from the President, are; Sultan of Brunei Hassanal Bolkiah; Prime Minister Mohammed Najib Abdul Razak of Malaysia; Prime Minister John Key of New Zealand; Prime Minister Lee Hsien Loong of Singapore; Prime Minister Nguyen Tan Dung of Vietnam; and Prime Minister Julia Gillard of Australia.
SourcePete Souza/White House


There’s a multi-nation, game-changing trade deal you probably haven’t heard much about. Probably because it’s been largely negotiated in secret. 

By Emily Cadei

A job creator that will boost the sluggish economy. Or a “massive assault on democracy.” Depending on who you ask, the Trans-Pacific Partnership – the U.S. government’s latest bid to grease the wheels of international commerce – fits either of those labels. What everyone agrees is that the deal, if and when it is completed, will be a game changer for international trade. And it is just the first of several major trade pacts the Obama administration is working to advance in 2014, amidst strong headwinds.

The TPP is the U.S. government’s latest bid to grease the wheels of international commerce.

Few in the United States have heard about the 12-nation Trans-Pacific Partnership, or TPP, which aims to expand and streamline economic ties among a varied set of countries across the Pacific Rim – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. All told, the value of goods traded between the 12 countries negotiating the TPP amounts to nearly double that of NAFTA, the free trade agreement the U.S. signed with Mexico and Canada in 1993.

Since joining the talks in 2009, the TPP has become a central plank of President Obama’s effort to “pivot” America’s attention to Asia. The White House touts it as a model of the sort of 21st-century “high standard” trade agreements – setting rules for the trade of a whole range of goods like cars and grains but also services like software, banking and healthcare – the U.S. should pursue in the future. But unlike NAFTA, which was the subject of plenty of heated political debate at home, the TPP has largely been taking shape below the public’s radar.

That started to change this fall, when discussions between interest groups and politicians began percolating. It will heat up significantly this month, when negotiators hope to finalize the deal after more than 20 rounds of negotiations. At the same time, supporters in the U.S. Congress are looking to try and fast track approval of the deal, which will be necessary to get it ratified. Without the fast track, or “trade promotion authority,” individual lawmakers can try to amend the agreement, which sends it back to the drawing board – something the White House wants no part of.

Lawmakers and critics complain the administration has been secretive about what is in the pact and how it may affect consumers.

As has been the case in past trade battles, the debate does not break down neatly along partisan lines. Mountain state Senators Max Baucus, a Democrat from Montana, and Orrin Hatch, a Republican from Utah, are leading the fast track effort, with a bill expected this week. 

But more than 150 House Democrats and another 22 Republicans – nearly half the chamber total – signed letters this fall signaling their opposition to fast-tracking the TPP agreement, arguing it violates Congress’ constitutional powers. They also complain the Obama administration has been far too secretive about what is in the trade pact and how it may affect consumers.

That’s the same criticism that is coming from a range of outside groups, including labor unions, consumer rights advocates and Internet freedom activists. 

Protestors on the street with signs that say NO TPP and DANGER

Demonstrators protesting against the Trans-Pacific Partnership are seen on Pennsylvania Avenue, near the White House.

Source Mandel Ngan/Getty

”Public interest groups have been routinely shut out of the negotiating venues, and our ability to present concerns to the negotiators have been largely symbolic, when permitted at all,” 14 civil society groups complained in an October letter to congressional leaders. Signatories included Amnesty International and Public Citizen.

Boiled down, the main concern among these groups and their allies in Congress is that the Obama administration and other participating governments are selling out the average Joe for big corporate interests. 

As the Electronic Frontier Foundation, which advocates for consumers’ rights online, asserted in a recent memo, ”section after section” of a leaked segment of the text ”contained clauses plucked from corporate wishlists.”

With an agreement as sweeping as the TPP, which addresses not just classic tariff issues but also sets rules on foreign investment, environmental standards, intellectual property protections, and state-run enterprises, its structure could have implications for how a whole range of industries operate for years to come. 

U.S. officials push back against claims of excessive secrecy, noting that there have been more than 1,100* meetings with members of Congress and their staff to keep elected officials informed of the negotiations.  

Even as they try to convince Congress to support expanded trade across the Pacific, Obama officials are also diving into high-stakes negotiations with Atlantic partners, as well. The United States and the European Union launched talks on what would be another massive free trade agreement, the Transatlantic Trade and Investment Partnership or T-TIP, in June, with a third round of talks completed in December. Already, rising concerns about privacy rights prompted by the spying revelations from Edward Snowden have clouded the talks. And they’re not expected to get any easier as negotiators get down to the nitty gritty of various financial and regulatory issues.

On top of that, a landmark law enabling trade with Africa – the African Growth and Opportunity Act – is set to expire later this year. Congress needs to act to extend the law, which gives trade preferences to certain Sub-Saharan African countries to encourage exports and help their economies. The program has more widespread bipartisan support than the other two trade agreements, but is currently under review to see if it can be made more effective, which could slow down the process.  

Given political opposition and time constraints in an election year, there’s no guarantee any of these agreements will be finalized in 2014. But if the Obama administration goes 0 for 3, it will be a significant blow to its second-term economic agenda.

*Correction: An earlier version of this story incorrectly stated the number of meetings with members of Congress.

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