Moving on with the TPP through TPA

May 14, 2015International Tradeby Marc Chandler

Passing TPA to benefit the TPP.

Reports exaggerated the significance of the May 12 procedural vote in the US Senate.  Some called it a rebuke of Obama.  Others said it was a stunning blow or a sharp defeat. It was none of these things. After looking at what happened, we quickly concluded that this was an easily fixable minor setback.

We had thought it might take a couple of weeks to sort things out.  Although the Senate is a deliberative body, it can move fast when the leadership wants, and it wants.  A vote now looks likely tomorrow.  An arrangement came by which there will be separate votes on three related bills, including the tougher bill on currency manipulation.  Following this will be a vote on Trade-Promotion Authority (TPA) itself.   The bills that pass will be bundled together and sent to the House of Representative. 

If the May 12 vote was a rebuke, it was of the Republican leadership in Senate.  If they want need Democrat support, which they do from time to time despite their majority, they need to compromise. The initial vote that lost was a vote against how the Republican's handled the issue--rode roughshod over the Democrats.   After trying it their way, the Republican leaders quickly accepted, they have to do it the right way. 

Expect the TPA to pass the Senate.  This may help strengthen the US trade negotiators' position at the next round of talks that take place May 15-24 in Guam.   Attention will turn to the House of Representatives.  It is a much closer call because the Republican Party itself is split. 

The Republican Party, like all modern political parties, is a coalition.  There is a faction associated with Tea Party insurgency that does not want to give the President any more authority.  Many also do not want Congress to abrogate its responsibilities by surrendering such power to the executive.  Some nationalists worry that such agreements surrender sovereignty.

There are 245 Republican Representatives.  It takes a simple majority of 217 to pass a bill.   That allows the party to suffer 28 defects (no votes) before needing the Democrat votes. 

How many Democrat votes are there?  There are 188 Democrat Representatives, but the free-trade wing is under-represented.  Reports indicate that there are about a dozen Democrat Representatives that will support TPA.   

Why under-represented?  Pew Research found that the was not as much of a difference in the attitude about free trade between Republicans and Democrats, and to the extent there was, the Democrats were more supportive.  This is true, even though, fewer Democrats than Republicans believe that trade agreements are good for employment or wages.  Overall, 55% of Americans think TPP is a good thing.  This was a function of 59% of Democrats and 49% of Republicans. 

The rank and file Republicans may not be as supportive of trade as their representatives.  The rank and file Democrats may be more supportive of trade than their representatives. 

Many press reports have been critical of Hilary Clinton's near silence on the issue.  There will an opportunity for her to weigh in on her views.  This is not it.  Whether the US Congress surrenders their constitutional right to debate and amend a bill is not for her to say.  The TPA is for six years. That means that if Clinton is elected, she will also have that authority. 

Clinton needs to be as careful picking her enemies, as she is her friends.  There is no need to alienate the President, whose support is helpful.  There is no need to alienate the environmental and labor groups who are leading the resistance to TPP, who will be the important foot soldiers in the campaign. 

That said, ultimately Clinton, like nearly every Democrat president, comes from the free-trade wing of the party.  She shares with others a concern about what economists call externalities, or unintended consequences, like displacing workers, or eroding environmental protection. 

A miscue by Republican leadership in the Senate is easily fixed. The key in the House of Representative will be the number of defects from the Republicans.  No more than 40 defects can be acceptable, unless there are more than 12 Democrat supporters.

Putting TPP Back on Track is republished with permission from Marc to Market

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