President Obama’s visit to Oso yesterday was made en route to Asia, where he hopes to give a decisive push for the Trans-Pacific Partnership (TPP), the giant, “high standards” trade deal four years in the making that would involve the United States and 11 other Pacific Rim nations.
The TPP would be the most ambitious trade agreement since NAFTA. Negotiators from Japan, Canada, Australia, Mexico, Malaysia, Singapore, Chile, Peru, New Zealand, Vietnam, Brunei and the United States have been trying to conclude the complex deal, which is behind schedule. I wrote in depth about it last October.
A couple of things need clarifying. TPP is not a “free trade deal,” but something closer to managed trade where winners and losers will be codified in the agreement itself. It is also, pace the White House, very much about China, which wasn’t invited to participate. TPP would draw China’s rivals in the region closer to the United States as part of the Obama “pivot.”
Major business interests support the TPP. And Washington, with its export-heavy economy and Boeing — which benefits from the U.S. government as its biggest sales-and-marketing agent — might well be a net winner. Proponents say the agreement could generate an additional $123.5 billion in American exports by 2025. If past experience is any guide, most states would not be so fortunate.
But it may be too late. The TPP’s biggest obstacle isn’t in Asia but in Washington, D.C.
With an election coming, many members of Congress will be reluctant to give the president “fast track” authority to conclude the deal and leave lawmakers with only an up-or-down vote. Fast track, used in NAFTA and other agreements, has not brought down the trade deficit. Its results have been part of a massive loss of jobs to offshoring and arguably unfair trade practices, such as currency manipulation, that the TPP would not address.
Unemployment remains unusually high, especially for nearly five years into a recovery that for millions of Americans is a word requiring quotation marks.
So far, the corporate oligarchy empowered by Citizens United and McCutcheon hasn’t put its muscle behind forcing Congress to grant fast track. Unless that happens, the Trans-Pacific Partnership is dead — at least until after November.
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Today’s Econ Haiku:
Too bad Atlanta
Got the subway meant for us
Shoot in foot, reload