[CTC] TPP: 'ObamaTrade' or political 'applesauce'?

[Dolan Mike]

Right now, it's more fashionable to be opposed to TPP than to be in favor.

Is TPP just 'ObamaTrade' or political 'applesauce'?
The Hill
By Rick Helfenbein
October 13, 2015
http://thehill.com/blogs/pundits-blog/finance/256729-is-tpp-just-obamatrade-or-political-applesauce

The great humorist Will Rogers said "all politics is applesauce" and I think we finally understand what he meant as we digest everything we hear and learn about the Trans-Pacific Partnership (TPP) draft agreement.

After 19 formal rounds and numerous additional meetings between the chief negotiators and ministers for seven-plus years, TPP is finally concluded. However, we still haven't seen a formal text, so we don't know exactly what it contains.

The Obama administration says it's good, and most of the people engaged in the art of trade think that it's positive, but severe doubts exist among the political elite. Right now, it's more fashionable to be opposed to TPP than to be in favor. To make matters worse, the key trade policy legislators in Washington - Sen. Orin Hatch (R-Utah), the Senate Finance Committee chair, and Rep. Paul Ryan (R-Wis.), the House Ways and Means chair - have publicly expressed their doubts. Hatch said: "While the details are still emerging, unfortunately, I am afraid this deal appears to fall woefully short."  Ryan said that "Only a good agreement will be able to pass the House."

Then, of course, the 2016 presidential candidates have weighed in.

Hillary Clinton (D): "As of today, I am not in favor of what I have learned about it."

Sen. Bernie Sanders (I-Vt.): "The Trans-Pacific Partnership is a disastrous trade agreement."

Donald Trump (R): "The small-business operators, farmers, manufacturers and others will again be burdened with unfair trade practices, currency manipulation [and] exploitation of cheap labor."

Ben Carson (R): He would like to see TPP renegotiated "because right now we have a lot of special interest groups who benefit." But Carson "believe[s] in free trade" and "there are aspects [of TPP] that are reasonable."

Sen. Marco Rubio (R-Fla.): "I'm generally very much in favor of free trade" and "I explain to people all the time that the United States cannot get locked out of 95 percent of the world's consumers."

Former Gov. Jeb Bush (R-Fla.): TP is "probably a good thing for the country."

President Obama has focused his signature TPP program on the 5 percent rule (also referenced by Rubio above): "When more than 95 percent of our potential customers live outside our borders, we can't let countries like China write the rules of the global economy."

So, with the Democrats seemingly opposed (except for the administration), and many Republicans in Congress seemingly in favor but with all parties definitely hedging their bets, is this ever going to pass?

Probably.

First of all, many Americans tend to confuse the prior trade promotion authority (TPA) issue with TPP. TPA essentially gave the president the right to negotiate a trade deal and bring it to Congress for a yes or no vote, without amendment. TPA has already been passed, and that remains the pathway the president will use as a vehicle for TPP.

There are numerous issues of information that have yet to surface with regard to the substance within TPP, including how the auto, dairy and pharmaceutical problems are being resolved. For the apparel, footwear and retail trades, essentially what we see is a percentage shift of incoming product from China to Vietnam. During the last several years, the two countries combined have controlled about 47 percent of the U.S. apparel market. In this past year, China was 36 percent and Vietnam 11 percent. Essentially, Vietnam will continue to rise and China will continue to slow, and that pattern will only accelerate under TPP.

On balance, Obama is correct and, as a nation that claims only 5 percent of the world's population, we have to be able to grow our economy by opening up new markets and exporting our creativity, our brands and our core products. In fact, most of the opposition to TPP agrees with that philosophy. The real problem for the politicians is two-fold:

1. Each and every one of them wants a better deal for their constituency, so it is far smarter for them to say "no" right away and to call out any change that they might want; then they will later claim any improvement as a hard-fought victory.

2. No matter how a politician votes (yes or no), they will be criticized by their opponent. If, for example, you vote "yes," then you might be viewed as being against U.S. jobs. If you vote "no," then you are against exports and growth

It's clear: Politics is applesauce, and the best is yet to come.

TPP will pass when all the politicians have taken their bite from the apple. It will pass when we realize that in order to grow beyond our borders, we have to reach out. We also need to do this while the United States still maintains the GDP and economic strength to command a better deal for all of us.



Michael F. Dolan, J.D.
Legislative Representative
International Brotherhood of Teamsters
Desk  202.624.6891
Fax    202.624.8973
Cell    202.437.2254

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