How Will the GOP-Controlled Senate Affect Trade Deals?

In the second part of our series, we look at how the new Republican majority will complicate Obama’s efforts to move forward on two trade deals, TPP and T-TIP.

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Story Transcript

THOMAS HEDGES, TRNN PRODUCER: On Tuesday, Republicans easily won over the Senate, gaining at least seven new seats. With both houses of the legislature now under the control of the GOP, many are watching to see how policies will be affected by the change in party leadership.

Last week, we looked at how a Republican-controlled Senate might thwart U.S. negotiations with Iran. Now we turn to trade policy. There are two deals in the pipeline, the Trans-Pacific Partnership, or TPP, and the Transatlantic Trade and Investment Partnership, also known as TTIP. Many recent reports suggest a GOP-controlled Senate is conducive to Obama’s goal of wrapping up the delayed TPP and TTIP talks, but according to Public Citizen’s director of Global Trade Watch, Lori Wallach, the opposite is true.

LORI WALLACH, DIRECTOR, GLOBAL TRADE WATCH (PUBLIC CITIZEN): Well, there’s a public relations campaign underway right now by the corporate lobby, because they basically are mortified that in 2013 and 2014 they were unable to get trade authority, despite the fact that they were paid tens of millions of dollars in lobbying fees and PR fees and the grassroots beat them. And it was both the left grassroots and the Tea Party grassroots. So they’ve started out with this sort of psych ops campaign about, ooh, this is what’s going to happen. But it’s just unrelated to the realities on the ground. I mean, fast track was never stopped in the Senate. Senator Reid saying that he wouldn’t give it floor time happened after the House, majorities of Democrats and Republicans, said they wouldn’t vote for it.

HEDGES: After a number of delays, TPP negotiations are now in a state of limbo. The main obstacle for Congress is a key provision called the Trade Promotion Authority, TPA, also known as fast track. TPA, which Obama also wants to apply to TTIP, gives the presidency the ability to draw proposals for agreements with certain countries and then submit them to Congress for an up or down vote. This means Congress has neither the ability to filibuster nor amend the agreement. With most of the negotiations taking place behind closed doors, Wallach says that Congress feels as if the agreement is not about national interests but about corporate interests.

WALLACH: But there’s so much in there that both Democrats and Republicans don’t like, but a bunch of big companies do, that actually a lot of people think unless Congress was in handcuffs and the agreement was stuck on the legislative luge run of the fast track process, it could be hard to get that agreement through Congress. So, basically, the question on everyone’s mind is, would the Tea Party suddenly say, let’s give President Obama more authority through fast track? And the answer is probably no.

HEDGES: The logic behind TPA is that without it, member nations would be reluctant to put forth their best offer. They fear that Congress would eviscerate their demands with amendments contrary to the countries’ interests. With the TPA intact, they know that the proposed agreement would be voted on as-is and without being altered back in Washington.

Many mainstream media sources, along with right-wing think tanks, are saying that the ascension of Orrin Hatch to chair of the Senate Finance Committee in particular should help facilitate the approval of TPA. Others disagree and say that Hatch’s more conservative approach will further alienate Democrats and Tea Party Republicans from the process.

MANUEL PEREZ-ROCHA, ASSOC. FELLOW, INSTITUTE FOR POLICY STUDIES: The media and the trade free promoters are trying to portray that this is going to be easier now, so that Obama can have more leverage in the negotiations with Asian countries in particular. But this is in fact the story being pushed by the administration to gain leverage. But the situation is, I think, and others, experts, is going to be much more murky. Senator Hatch, for instance, doesn’t like trade adjustment assistance, which are these measures that help to cover up some of the impacts that trade agreements have on labor, for example people here who are losing their jobs because of dislocation.

HEDGES: Manuel Perez-Rocha is an associate fellow at the Institute for Policy Studies. He argues that even beyond the issue of fast track, Hatch, along with his Republican constituents, are more likely to tone down the regulatory language within an agreement that is, for many, already lacking in measures that protect labor, the environment, and health care infrastructures abroad.

PEREZ-ROCHA: If the Republicans tried to temper with trade adjustment assistance and language on climate and the language on labor and so on, the obvious thing would be to expect a backlash from the Democrats in terms of they wouldn’t like to pass a fast track, fast track authority on the modified agreement. So this is probably scenario, that the situation will be much more litigious.

HEDGES: Coupling this kind of deadlock over the fast track authority is a recent divide between Obama and Republicans on the issue of Japan’s involvement in the TPP. Japan is disputing American demands in the sectors of agriculture and the auto industry.

WALLACH: Basically, between now and April, when there are major national elections in Japan, the prime minister of Japan is from the party that’s attached to the rural base, the farm base, can’t make any more concessions on agriculture. And so that means the U.S. is going to have to back down from the demand it was making that Japan zero out all agricultural tariffs as part of the TPP deal. And maybe Obama would do that, to be able to get a deal he could put his name on. Unfortunately, the Republicans have been the ones demanding that either Japan agree to get rid of all tariffs on all agricultural products, or that Japan get thrown out of the TPP. And so now Obama will have less flexibility than he would have in the era of divided government to actually be able to make the deal he might want to just to get credit for it.

HEDGES: In the end, the Republican win in the Senate means the GOP might use the TPP and TTIP negotiations not as a point of common ground with the Obama administration, but as a tool for leverage. If the GOP does work with Obama on the agreement, Perez-Rocha argues, they’ll probably do so in exchange for the suppression of another one of Obama’s legislative proposals that the Republicans oppose.

PEREZ-ROCHA: They might also want to trade off with Obama on other issues; like, they won’t get fast track for free. They might want to bury once and for all the immigration package, legislation on climate. So this is very political.

HEDGES: That course of action would appeal to Republicans who want to counter their reputation as obstructionist to many of Obama’s legislative proposals. But a second possibility, Perez-Rocha says, is that Republicans might anull the remaining protective measures within the TPP and wait for a GOP presidential win in 2016 to pass the agreement.

PEREZ-ROCHA: I mean, they might not want to give fast track to a Democratic Party, or to allow a Democratic Party presidency, but try to keep it when and if they win the presidency. Right?

So I think it’s going to become a tool or an element of great discord. It’s not, like, black and white, like saying Republicans like free trade, and therefore it’s going to pass.

HEDGES: While more acerbic and risky, that strategy would fall in line with the GOP’s agenda to punish and deprive the Obama administration of any concessions, destroying both his influence and the larger image of a Democrat in the White House.

For The Real News Network, Thomas Hedges, Washington.

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DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.