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Obama's trade agenda needs backing

As President Obama negotiates with Europe and Asia on free-trade pacts, he still needs help from Congress to close the deals. America's openness remains its strength. Lawmakers must give him negotiating tools.

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A "made In U.S.A." tag is pictured inside a bag in San Diego, California Jan. 29. President Obama's nod to trade in his State of the Union address leaves the hard work still ahead in convincing Congress to get behind free trade deals. Obama devoted four sentences to the need for him to be giveen "trade promotion authority" (TPA) to "protect our workers, protect our environment, and open new markets to new goods stamped 'Made in the USA.'"

Reuters

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In his State of the Union message, President Obama spoke only briefly on something that could determine the defining legacy of his second term. He asked Congress for authority to negotiate free-trade deals and allow lawmakers to vote only yea or nay on a negotiated treaty.

Under such authority, known as “fast track,” Mr. Obama could sew up two trade deals now in the works, one with the European Union and the other with 11 Pacific Rim nations. If both pass, the final deals would bring an explosion of trade for the United States with nations that constitute nearly half of the world’s economy.

And China and India aren’t even included in the current talks.

Without the two deals, the US could be left out in the cold as other nations rush to complete their own, enabling them to boost innovation, lower prices, create jobs, and foster peaceful ties.

“Listen, China and Europe aren’t standing on the sidelines. Neither should we,” Obama told Congress.

Presidents since Nixon have been granted such authority in order to do the kind of horse-trading needed to complete today’s complex trade pacts. Other countries simply won’t negotiate with 535 members of Congress over every item. The presidential authority lapsed in 2007, but a bill introduced this month in the House and Senate would bring it back. Obama’s nod to it in his speech should help it pass – that is, if Congress wants the US to remain the global leader on free trade.

Unlike past measures, the bill comes loaded with conditions for the negotiations – insisting on labor rights, environmental rules, curbs on currency manipulation, protection of intellectual property. Most of all, it gives Congress access to the talks in order to keep them transparent.

With all that, the bill strikes a strong bipartisan tone. Yet many Democrats still contend free trade has contributed to income inequality in the US. Obama, who is hardly a champion of inequality, will need to convince them that the long-term benefits of trade – which go beyond economics to strategic interests – outweigh any necessary adjustments for the US in further opening its markets.

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“If we don’t stay in the game, we’ll be left out on the sidelines,” says Sen. Max Baucus, the chief Democratic sponsor of the bill in the Senate. “Our exports will face high tariffs, whereas our competitors will not.”

America’s openness to the world – its people, goods, and ideas – remains one of its strengths. The pace of opening markets, and reciprocity in trade with other countries, are important and often difficult. But ever since the US stalled its economy with the Smoot-Hawley Tariff Act in 1930, it has sought more trade, not less.

The talks with the EU and Asian nations are at a crucial stage. If Obama can get fast-track authority now, deals would be done by year’s end. Such an achievement could be Obama’s most bipartisan success of his eight years in office. More than that, it would mean greater prosperity for the world.

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