[CTC] Will Hillary Clinton flip on trade?

Tue Oct 6 03:28:26 PDT 2015

http://www.politico.com/story/2015/10/hillary-clinton-trade-dilemma-214456

POLITICO

Will Hillary Clinton flip on trade?

By Victoria Guida

10/05/2015 07:05PM EDT

As much as she might want it, Hillary Clinton won't get a free pass on free
trade.

Clinton has presented herself as a skeptic of the biggest trade deal in
recent history, saying this summer that "we should prepared to walk away"
from the 12-nation Trans-Pacific Partnership unless it boosts Americans'
wages and national security. But with a deal announced Monday after months
of backstage wrangling, she will be under intense pressure to take a stance.

"I think that all the candidates should state their positions ...," said
Rep. Marcy Kaptur (D-Ohio), who called on Democrats to unite in opposition.
"It's a defining moment for this country."

The deal is one of the most ambitious items left on Barack Obama's White
House bucket list. But his former secretary of State owns it too, even
though she has expressed increasing ambivalence about its details and could
soon disown it outright, as some in her circle have suggested.

Since officially announcing her candidacy in April, Clinton has managed to
avoid the wrath of her party's left wing - despite Bernie Sanders'
rocketing rise in the New Hampshire and Iowa polls - by opposing the
Keystone XL pipeline and aligning herself with Massachusetts Sen. Elizabeth
Warren on student-loan reform. But reacting to the polarizing TPP deal is
one of the most excruciating policy decisions of her campaign thus far -
and far more politically perilous with Democratic primary voters than her
backing of Obama's Iran deal.

It's an unwelcome flashback to 2008 when another liberal free-trade skeptic
- Obama - pointedly vowed to renegotiate the North American Free Trade
Agreement rammed through by her husband in the 1990s.

Perhaps more than on any other issue, Clinton's positions on trade
illuminate questions that continue to nag at her candidacy: What does she
really stand for? Will she go to bat for the party's progressive base? Has
she really distanced herself from the shadow of her husband's
administration?

"It's so difficult for her because she was instrumental in the TPP's
creation," said Robert Reich, who served as secretary of Labor under former
President Bill Clinton. He emphasized that she recommended the
administration's pivot toward Asia "which included a TPP in order to
contain China's influence in the region - and yet the Democratic base has
grown increasingly skeptical about the wisdom of the TPP."

If Clinton supports the pact, she is sure to anger her party's base,
especially labor and environmental groups - a riskier prospect given
Sanders' rising poll numbers.

"I think that the hope six months ago was that former Secretary Clinton
could in effect run a general election campaign," said William Galston, a
former policy adviser for Bill Clinton and senior fellow at the Brookings
Institution. "The emergence of Sanders and his forces as real sources of
power in the Democratic Party, I think, has changed that calculus."

But opposing the deal is also a problem because it opens her to charges of
flip-flopping. As secretary of State, she pushed the deal as a central
component of the pivot to Asia, say former administration officials.
Besides boosting U.S. exports, the goals were to counter the economic and
political influence of a rising China and to draw Asian economies like
Vietnam, Malaysia, Singapore and Brunei closer to the U.S.

To be sure, most of the deal's details have been hashed out since her
departure from the State Department in January 2013, and she did not weigh
in on specifics, former administration officials said. She played a role,
for example, in communicating U.S. expectations to countries like Vietnam
interested in joining the pact.

"She certainly did support the rebalancing toward Asia, and she thought
that the TPP was a part of that," said Robert Hormats, her deputy on
economic issues at the State Department who is now vice chairman at the
consulting firm Kissinger Associates. "The key point to remember is the
details had not been fleshed out at that point. Negotiations on the
specifics took place after that."

As secretary of State, Clinton stressed then that she wanted n agreement
with "high standards that can serve as a benchmark for future agreements -
and grow to serve as a platform for broader regional interaction and
eventually a free trade area of the Asia-Pacific," she wrote in Foreign
Policy magazine in October 2011.

The theme that runs through Clinton's history on trade issues is pragmatism
about the benefits versus the costs of globalized commerce - in sharp
contrast to her husband's , who was strongly in the free-trade camp.

As a senator, she voted against giving George W. Bush fast-track authority
to negotiate trade deals that Congress could vote up-or-down but not amend
or filibuster.

But then she supported most of the agreements Bush negotiated over the next
six years, except for the Central American Free Trade Agreement, which was
opposed by most Democrats as a step backward on labor standards. Sen.
Barack Obama also voted "no" on CAFTA.

The deal that could resonate much more in the minds of voters is NAFTA,
championed by her husband while he was in the Oval Office and despised by
the same groups who hope to topple TPP.

Weak standards in NAFTA on labor and the environment led to the outsourcing
of thousands of factory jobs to Mexico, according to its critics. Galston
acknowledged that NAFTA didn't live up to the sweeping promises that were
made in the run-up to its passage, and pointed to other factors that have
fueled suspicions of free-trade deals, such as China's penetration of the
U.S. market and wage and income stagnation.

Hillary left no doubt that she was distancing herself from her husband
during her 2008 face-off with Obama, using NAFTA as a punching bag and
promising to renegotiate the deal if she were elected president

"What I have said is that we need to have a plan to fix NAFTA," she said in
a 2008 debate. "I would immediately have a trade timeout, and I would take
that time to try to fix NAFTA by making it clear that we'll have core labor
and environmental standards in the agreement. We will do everything we can
to make it enforceable, which it is not now."

In a sense, the president is attempting to achieve those goals through the
Pacific-Rim pact, which contains enforceable labor and environment language
and includes Canada and Mexico. The administration argues TPP has the
strongest labor and environment protections of any trade deal in history

That has not allayed fears on the left, however, and Clinton is likely to
try to thread the political needle by saying those protections don't go far
enough. Her recent statements leave room to say pretty much anything about
the final deal.

"We do need to set a high bar for trade agreements," she said in a July
speech. "We should support them if they create jobs, raise wages - and
advance our national security. And we should be prepared to walk away if
they don't."

That does little to reassure Larry Cohen, former president of the
Communications Workers of America union and now an adviser to Sanders.
Cohen said the labor movement is deeply skeptical they can rely on Clinton
for a different approach to trade.

"I don't believe she takes enough ownership of the role her State
Department played in the origins of the TPP. It leads to a credibility
problem," he said. "She will say, 'I didn't do the deal itself. [The U.S.
trade representative] did it.' She'll say something like, 'We have to do a
better job of elevating environmental and human rights.' Some people may be
OK with that."

Most expect her to criticize particular provisions without condemning the
whole deal. That way, if she's elected president before the deal is
approved by Congress, she could still choose to renegotiate those sections.

Her book "Hard Choices" hints at how she will likely proceed. She worries
about any trade deal that allows private companies to sue foreign
governments for damages over lost profits from health and environmental
laws - a staple of trade agreements since NAFTA. Those provisions were
modified in the last few days in the TPP pact to place a greater burden on
companies to prove their cases and dismiss frivolous claims. But Clinton
may say those changes don't go far enough.

In the book, she also emphasizes the importance of addressing currency
manipulation, which TPP does not do in any enforceable sense, though it
does include a side agreement that requires governments to agree to work
towards greater transparency about monetary decisions.

Candidates who lean toward the deal, including Clinton, but who are wary of
antagonizing primary voters are likely to say, "'It's not good enough, and
I'll make it better,'" said National Foreign Trade Council President Bill
Reinsch, who served as an assistant Commerce secretary under Bill Clinton.

"That's a very convenient argument to make next February or March because
if they're lucky it'll have passed by the time they take office, and they
won't have to do anything," he said, adding that the position is also
unassailable because there's no such thing as a perfect deal.

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