Clear Opposition to Trade Agreements amidst Unclear Political Environment

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Lim Hng Kiang, Singapore’s minister for trade and industry, left, U.S. trade representative Michael Froman and Vu Huy Hoang, Vietnam’s minister of industry and trade, prior to the signing of the Trans-Pacific Partnership Agreement in Auckland, New Zealand, on February 4th, 2016. PHOTO: DAVID ROWLAND/ASSOCIATED PRESS

 

It is quite clear that despite the still unclear outcome of the 2016 election, the new administration possibly has little to no support for trade deals. Candidates have voiced opposition against free trade agreements, mostly the Trans-Pacific Partnership (TPP) that is now awaiting a decision in Congress, and some have even backtracked from supporting the agreements to disapproval or skepticism, all were done to secure votes during campaign season.

The Trans-Pacific Partnership is aimed to lower “tariffs, quotas and regulatory red tape” over time between countries including the U.S., Japan, and ten other countries along the Pacific rim, while not including China and South Korea. The Republican-controlled Congress has approved legislation to “fast track” the vote for the deal, but in the uncertain political environment of the election year, nobody really want to vote until the dust settles in November. On top of this situation, the mostly negative comments from both sides is making the TPP increasingly less likely to be approved.

On the Democratic side, front-runner Hillary Clinton has switched from full-throated support for the TPP while as secretary of state to criticizing the deal for potential wage problems and job loss. This helped solidify support from labor unions who wield great power in election years. Unlike the Bill Clinton era when the Democratic Party supported trade deals, in addition to Bernie Sanders’s prolonged opposition for freer trade, there is little support from congressional Democrats for TPP in the current state due to its “insufficient provisions to protect labor, lack of binding rules on currency manipulation”.

For the Republicans, there is a split between members who are concerned about the final agreement, and members supporting more liberalized trade regardless of the Party’s prior commitments to freer markets. Billionaire Donald Trump, who is currently in the lead, has taken the hostile approach to international trade agreements from calling the TPP “horrible”, intending to impose high tariffs on products from Mexico despite NAFTA and of course high tariffs on China. As for Ted Cruz, he is now against the TPP, but in a May Senate vote he seconded President Barack Obama’s trade policy, then went back and countered the same bill which speeds up Congress’ vote on the deal. Similarly, Marco Rubio, who also voted for the “fast track” legislation, is now unsure about voting for the TTP itself next year.

The current anti-trade stance of the presidential candidates in truth is hardly a surprise when they need to stay on good side of labor groups. The implementation of the TPP agreement would lead to job losses, at the same time increase competitiveness of labor-intensive manufacturing companies and auto makers. The new agreement is also expected to boost growth of the overall economy and increase income for many Americans. Despite the benefits, the possibility of more “vocal middle-class losers” is one of the main reasons why President of the AFL-CIO labor federation, Richard Trumka, went so far to say “If the TPP comes up for a vote, we are going to kill it once and for all.”

However, there is also the possibility that Hillary Clinton and Ted Cruz would shift to a more pro-trade position later in the election. With precedence in the 2008 election when Barack Obama and Hillary Clinton both attacked such agreements before backing them later as the new administration. There is the chance that she would still stay ahead, if she would be able to secure benefits for the working class and show determination in enforcing trade rules, upon changing position on the TPP.

To sum up, the U.S. withdrawing from freer trade would give other countries the opportunity to do the same and force the world economy back decades to the detriment of all parties involved. The Trans-Pacific Partnership is a great tool for advancement in the current political climate but hopefully the new president would not throw away all the previous efforts.

 

References:

AT A GLANCE Trans-Pacific Partnership

Top House Democrat on Trade Sander Levin Rejects Pacific Agreement

U.S. Election Debate Complicates Passage of Pacific Trade Pact

In Murky 2016 Contest, Clear Opposition to Trade Agreements

Dozen Nations Sign Pacific Trade Deal, Kicking Off Battle for Ratification

House Passes Trade Component, but Trans-Pacific Partnership Still in Doubt

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