Writing about TPP Fast Track" and all the associated skirmishing is made somewhat difficult by the secrecy of the legislative text. That said supply-side thought leader John Tamny
declares The TPP is a no-brainer." (If Tamny means free trade is a no-brainer he surely is right.) So also
declares the decorated veteran of the Supply-Side Wars Peter Roff:
Trade promotion authority is critical to Americas future competitiveness and ability to participate in the global economy. The nationalistic retrenchment that is occurring in some parts of the Republican Party on national security matters should not be allowed to spill over into the economic arena. Global tariffs which are really just another form of taxes must come down.
That said there is another point of view. Americas great supply-side founding father Alexander Hamilton was of course no enemy of tariffs as noted in
Philly.com by columnist Robert W. Patterson.
Times have changed since Hamilton and decisively so. Still the founding father of modern supply-side economics Nobel laureate Prof. Robert Mundell a relentless foe of tariffs stated in 2013 interview with
Forbes.com columnist Eamonn Fingleton as reported in a column entitled
Nobel Laureate: The U.S. Is The Naked Woman Of The World Economy: It has been a mistake to let U.S. manufacturing run down so low. While other nations have industrial policies to maximize their trade benefits the United States leaves itself open like a naked woman. A big problem is with nations that may prove to be future enemies." Strong words
.
Even adamant free trade champion Heritage Foundation chief economist Stephen Moore on a national radio talk show broadcast on the night of June 13
th acknowledged that there are legitimate reasons to oppose the TPP.
So what to do?
Supply-Side Congressman Steve Russell (R-OK) ranked by
National Journal as one of the top ten in its
The Freshman Power Rankings led the charge to peel off Republican votes in the House with a widely noted op-ed in
The Hill headlined
Right track not fast track.
Russsell there wrote:
At his State of the Union Address President Obama asked us in Congress to grant him fast track" trade promotion authority so he can write rules for the worlds economy." I sat alarmed for Americas future should we expand this presidents authority given how he has extended executive overreach fumbled our foreign policy debilitated our defense and diminished our domestic tranquility. At least this time the president asked to bypass Congress.
Regardless of the merits of trade partnership or the tactics of their negotiation two fundamental questions loom: Why do we trust this president given his track record in foreign affairs and what serious harm would come to the nation by waiting 23 months?
…
As Abraham Lincoln famously said nothing good can be frustrated by time."
This was no sneak attack" by Rep. Russell who in advance declared his intention to oppose Fast Track to House leadership. Russells high profile principled opposition proved effective precipitating a significant exodus of Republicans from Fast Track.
Last week President Obama lost a critical vote (and the support of Minority Leader Pelosi) toward TPP a possibly fatal setback to its prospects in the 114
th Congress. In a statement to me by email yesterday Rep. Russell whose commitment to free-market policies are beyond question proposed these two further questions:
1. Why are we willing to give the Democrats concessions to give the President something he wants? Especially the concession is entitlement expansion with TAA? Why are we not getting oil and gas exports or border security from the President?
2. Why do we trust this president with this authority? The current Presidents talent for negotiation among nations should be measured by his foreign policy. Have we forgotten the Line in the Sand; the arming of Al Qaeda and other nefarious Syrian rebels to fight Assad only to watch them become ISIS; then dismiss them as a JV Team; only to see them tear through Iraq which fell apart after we abandoned itafter we were assured they could stand on their own if we left early? And now no strategy to fix it. Then there is the Arab Spring which has morphed into a potential for Nuclear Winter with Iran. And lets not forget Crimea and Ukraine. I can go on. The question is why are we? Like Lucy holding the football we are told that the President needs the power to negotiate. If we just come and take a kick at it it will all be fine.
I am for free trade but with this president we need Right Track not Fast Track.
Whats really at stake? An excellent short description is contained in an analysis in the
New York Times by Neil Irwin
What You Should Know About the Trans-Pacific Partnership parsing the winners and the losers from the probable deal:
Winner: American service industries.
…
Peter Petri a scholar at Brandeis University and the Peterson Institute for International Economics estimates that with a deal service industries would contribute an extra $79 billion to the American economy more if additional Pacific Rim nations ultimately join the partnership.
Loser: Manufacturing workers
The same estimates from Mr. Petri that point to higher service-sector activity point to losses from trade in machinery transport equipment and other manufacturing sectors. Over all his estimates put the net effect of the trade deal on manufacturing in the United States as a $39 billion loss by 2025.
…
Winner: Owners of intellectual property
If youre an American who develops products whose value is more abstract than physical whether a blockbuster blood pressure medication or a blockbuster Hollywood film you stand to gain.
…
Close call: Agriculture
Mr. Petris estimates place no net effect on the balance of trade for rice and wheat and a slight positive from other agricultural sectors. In particular negotiators in Washington want Japan to reduce its protectionism of domestic rice pork and beef industries giving Americans better access to that big market.
But the reality is the deal would shape the outlook for major pieces of Americas agricultural economy in ways that will not become clear until more details become public.
The drama will resume on Capitol Hill as the White House attempts to resurrect the Trade Adjustment Assistance legislation. According to The
New York Times: There is still a possibility that the House will pass the worker assistance bill early next week and send to Mr. Obama but it would require dozens of Republicans or Democrats changing their votes a prospect Republicans said was remote.
And there remains a last-ditch chance that if the House stands pat the Senate will pass the version of Fast Track already passed by the House 219-211 without trade adjustment assistance enacting Fast Track for TPP.
The TPPs stakes are high although not as astronomical as sometimes presented in the hyperventilating debate. Last weeks big setback to TPP was shrugged off by the markets. As the
New York Timess Justin Wolfers
observed:
Wall Streets apparent indifference to this latest development tells us something although its not quite clear what. One possibility is that perhaps this trade deal just isnt such a big deal for the bottom lines of these firms it adds only millions to the bottom lines of companies that are worth billions.
If thats right then perhaps the stakes here arent as high as the agreements most fervent boosters have argued. The economist Tyler Cowen
suggested as much on Twitter arguing that his default hypothesis" is that it is not actually a huge transfer of wealth to them."
Free trade between nations overall as bluntly stated by John Tamny is a no brainer." The conflicting factors here however are not trivial. As one wag put it this (secret) legislation might be to free trade what the Patriot Act was to patriotism.
To oppose Obamas TPP does not rise to the level of supply-side heresy. As Rep. Russell asks What serious harm would come to the nation by waiting 23 months?"
