That free trade is advantageous to both sides is the rarest of political propositions — provable, indeed mathematically. David Ricardo did so in 1817. The Law of Comparative Advantage has held up nicely for 198 years.
Nor is this abstract theory. We’ve lived it. The free-trade regime created after World War II precipitated the most astonishing advance of global welfare and prosperity the world has ever seen. And that regime was created, overseen, guaranteed, and presided over by the United States.
That era might be coming to a close, however, as Democratic congressional opposition to free trade continues to grow. On Tuesday, every Democrat in the Senate (but one) voted to block trade promotion — aka fast-track — authority for President Obama, which would have given him the power to conclude the Trans-Pacific Partnership (TPP), a trade deal being hammered out with eleven other countries, including such key allies as Japan, Australia, and Singapore.
Fast-track authority allows an administration to negotiate the details of a trade agreement and then come to Congress for a non-amendable up-or-down vote. In various forms, that has been granted to every president since Franklin Roosevelt. For good reason. If the complex, detailed horse trading that is required to nail down an agreement is carried out in the open — especially with multiple parties — the deal never gets done.
Like all modern presidents, Obama wants a deal. But he has utterly failed to bring his party along. It’s not just because for six years he’s treated all of Congress with disdain and prefers insult to argument when confronted with opposition, this time from Democrats like Elizabeth Warren. It’s also because he’s expended practically no political capital on the issue. He says it’s a top priority. Has he given even a single televised address?
TPP is a boon for America. It reduces tariff barriers to vast Asian markets and strengthens protection for intellectual property, America’s forte.
The trade deal itself will likely pass the Senate eventually, there being eight or so Democrats (out of 46) who support the deal but wanted to extract certain guarantees before fast-tracking it. (They got the guarantees and on Thursday broke the filibuster on fast-track.) The problem is the House. Very few House Democrats will vote yes. House passage will require Republican near-unanimity. And it’s not there.
One group of GOP opponents are traditional protectionists of the Pat Buchanan paleoconservative school of autarky. The others are conservatives so reflexively anti-Obama that they oppose anything he proposes, especially anything that appears to give him more authority.
Having strongly opposed Obama’s constitutional usurpations on immigration, health care, criminal justice, and environmental regulation, I’m deeply sympathetic to that concern. But in this case, there is no usurpation. There is no congressional forfeiture of power. Fast track has been the norm for 81 years. And the final say on any trade agreement rests entirely with Congress.
As for the merits, the TPP is a boon for America. It reduces tariff barriers to vast Asian markets and strengthens protection for intellectual property, America’s forte. To be sure, any trade deal, while a net plus overall, produces winners and losers. But the TPP will be accompanied by so-called Trade Adjustment Assistance, training and subsidies to help those negatively affected.
In our deadly serious competition with China for influence in the region, the TPP would anchor our relations with Pacific Rim nations.
Moreover, the overall gain is more than just economic. In our deadly serious competition with China for influence in the region, the TPP would anchor our relations with Pacific Rim nations. If we walk away, they will inevitably gravitate to China’s orbit. The question is (as Paul Ryan and Ted Cruz succinctly put it in the Wall Street Journal): Who is going to write the rules for the global economy — America or China?
And one final consideration. Watching America’s six-year retreat under Obama, the world wonders whether this is the product of one idiosyncratic presidency or of an inexorably declining America.
Republicans have been telling the world that decline is not a condition but a choice, and that America’s standing will be restored when U.S. policy is entrusted to geopolitically serious people. Here is the GOP’s chance to show seriousness.
The Democrats, inventors of the postwar free-trade regime, have now turned against it (and their own president). This is the Republicans’ chance to demonstrate that they can think large by advancing an important strategic objective — giving substance to Obama’s as yet stillborn “pivot to Asia.”
I wouldn’t mind seeing Obama sunk by his own arrogance in intraparty fratricide over trade. But the issue is bigger than Obama. In 20 months, he will be gone. Asia will not. And it will get away from us if Republicans don’t step up and step in where Obama and the Democrats have failed.