In perhaps the biggest legislative defeat to President Barack Obama to date, the U.S. House of Representatives rebuffed efforts to grant trade promotion authority to the president Friday. So, again, a free trade agreement (FTA) that includes several emerging, desirable Southeast Asian nations has been left hanging in the balance.
The House was not able to pass legislation previously backed in the Senate supporting the authority, which streamlines the negotiation process when trying to forge a multilateral deal. Proposed legislation to approve funding for domestic worker and retraining programs failed 302-126. And, although the House did have enough votes to pass a standalone bill to grant Obama the trade promotion authority, the Senate’s legislation mandated that the worker aid needed to pass in the House as well. The White House’s only remaining hope for the trade promotion authority is for it to essentially go back through the Senate, almost from scratch, and pass a measure without the aid program. This approach failed in early May.
Opponents object to the secrecy with which the 12-nation Trans-Pacific Partnership FTA negotiations are being conducted and seek amendments to include an extraordinarily high level of guarantees for U.S. workers at the behest of unions. The White House, moderate lawmakers and the greater business community (including numerous small business advocate groups) have been rallying for the trade promotion authority to enable the Obama Administration to finalize the TPP deal because it would open markets like Malaysia, Singapore and Vietnam. They characterize public opposition from lawmakers—led for months by liberal Democrats like Rep. Nancy Pelosi (D-CA) and current buzz politician/media darling Sen. Elizabeth Warren (D-MA)—misguided and largely based on inaccurate analysis and/or little factual evidence.
An inability of President Barack Obama—should the effort stall completely, as appears more likely than ever —to at some point garner the same trade promotion authority held by every other president since the 1930’s would render the potential of the United States remaining part of the TPP all but fantasy. These Southeastern Asian markets are increasingly drawing manufacturing and call-center jobs formerly popular in China and India, a shift that has given rise to consumerism among demographics in these markets. With even the smallest U.S. businesses exporting much more than ever before, a trend that took flight following the recession and weak rebound, the TPP is seen as a way to better reach these emerging markets for domestic companies of all sizes, as well as a way to dilute Chinese economic influence and dominance in the region. The TPP also involves Canada, Japan, Australia, Chile and Peru.
- Brian Shappell, CBA, CICP, NACM managing editor