Commentary: Trade's strange bedfellows

Obama’s hope for Asian agreement depends on GOP

Just when it seemed those currently in Congress would adhere to rigid party positions on every issue, we see some interesting diversions from the narrow path.

When it appeared that congressional Republicans would solidly oppose President Obama at every turn, some Republicans and Democrats switched places in opposing the president.

We even saw a glimmer of bipartisanship on a measure to establish legislative oversight on nuclear negotiations with Iran. That was hardly a victory for Obama but it established a procedure for congressional review much more palatable to the administration than some senators originally proposed. Only Arkansas freshman Sen. Tom Cotton, who had sought to undermine any agreement, voted against the bill.

The real scrambling of party lines came when the Senate began consideration of presidential trade-promotion authority, or "fast track." Specifically at issue is the 12-nation Trans-Pacific Partnership, and the president's push for accelerated authority to complete negotiations then have Congress consider an agreement on a yes-or-no vote without amendments.

Congressional Republicans have repeatedly railed against Obama for what they claim is abuse of power, exceeding his authority on a variety of issues. Yet, in this case, many of them, including Arkansas's two Republican senators, would grant more power to the president. A series of votes will occur, but Obama's hopes depend on substantial Republican support for a measure backed by many major business interests. The Arkansas senators were among those strange bedfellows providing the president with the votes necessary for fast track. And who would have believed we would hear Republican Senate leader Mitch McConnell saying, "The president has done an excellent job on this."

The Trans-Pacific Partnership would cut tariffs on a range of goods and services, involving 40 percent of the world's economy and 40 percent of U.S. international trade. Obama calls it "the most progressive trade agreement in history."

In some respects we are witnessing a replay of the 1993 debate over the North American Free Trade Agreement when President Clinton relied on Republican votes in Congress to gain approval. Much of the opposition to the Trans-Pacific Partnership comes from the same quarters as did the anti-NAFTA effort -- organized labor and liberal groups in particular. Concern that the Trans-Pacific Partnership would cost American jobs is a major factor.

However, just as Clinton emphasized broader foreign-policy concerns to help tilt the balance in Congress in favor of NAFTA, Obama is citing the geopolitical significance of the new agreement. Indeed, it might be said that Obama is playing the "China card," just as Richard Nixon did in a different context in 1972. Obama sees the Trans-Pacific Partnership as exemplifying American leadership and what he calls "rebalancing" toward Asia -- and, importantly, as a vehicle for countering China's rising power in the Asia-Pacific region.

China isn't part of the Trans-Pacific Partnership, although there were past indications that it might want to participate. The pact would include Japan, Vietnam, Australia, New Zealand and Chile, among others. Obama touts the partnership as having rigorous labor and environmental standards, which could present obstacles for China.

Meanwhile, the Chinese have not been idle, engaging in a whirlwind of international economic diplomacy, including trade deals with countries in the region and a number of projects in the "Silk Road Economic Belt." Moreover, China proceeded, despite U.S. objections, to establish the Asia Infrastructure Bank, which now has 57 nations as members, including Britain, Germany and South Korea.

And it should be pointed out that China and the U.S. announced a major climate/environmental agreement last November, and are negotiating a possible bilateral investment treaty. Some believe that if the Trans-Pacific Partnership goes forward, China will inevitably join. However, Chinese officials are, not surprisingly, troubled by the anti-China rhetoric in the U.S. debate over the agreement. Obama said "China is the 800-pound gorilla in Asia," and will create its own rules if the U.S. abandons efforts to expand trade on our terms.

Defense Secretary Ashton Carter called the Pacific trade deal as important to the U.S. military as a new aircraft carrier.

The fate of the deal in Congress is uncertain, though it will rely on an unorthodox coalition if it gains approval.

And there's more to come. The Export-Import Bank, a government agency that guarantees loans for foreign businesses to buy from U.S. companies, must be re-authorized in June if it is to continue. As a candidate, Obama criticized the Ex-Im bank, but is now a strong supporter.

Never particularly controversial before, and backed by Republicans in the past, it has become a hot-button issue, a symbolic target for libertarians and some conservative groups, such as Americans for Prosperity-Arkansas. They view it as corporate welfare, charging that large U.S. corporations are the beneficiaries. But Ex-Im officials say 90 percent of the bank's customers are small businesses, and many American jobs are at stake. Other nations, including China, regularly provide such support to their businesses.

Clearly, these issues have many dimensions, including domestic political alignments and U.S. international interests. What happens in Congress could be highly consequential in terms of how the U.S. engages with the rest of the world.

Commentary on 05/20/2015

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