[CTC] WashPo: On free trade, this election is giving business the willies

[Dolan, Mike]

On free trade, this election is giving business the willies
Washington Post
By Lydia DePillis
March 16, 2016
https://www.washingtonpost.com/news/wonk/wp/2016/03/16/on-free-trade-this-election-is-giving-business-the-willies/

Glenn Brunkow, a fifth-generation farmer in northeast Kansas, doesn't know the people who end up eating what he grows with his father on their 2,500 acres; the corn, soybeans, and beef cattle are sold to aggregators and sold again, feeding into the stream of commodities that flows to consumers around the world. But he does know that it would be better if there were more of them. Prices have been depressed for years now, as global demand has slowed, which shaves his already thin margins down further.

"The longer it continues, the harder it gets," Brunkow says. He thinks passing the 12-nation Trans Pacific Partnership trade deal might help: Opening markets like Japan and Vietnam might add a few cents a bushel, letting him fix things around the farm and put money away for retirement. The massively complex agreement made good progress last year, clearing key votes in Congress and rolling out to great fanfare upon its completion, as a rare point of agreement between the White House and GOP leaders.

But it still has to be ratified. And this year's sudden, red-hot rhetoric against trade deals on the campaign trail - from even centrist Hillary Clinton, as she responds to populist attacks from longtime free trade skeptic Bernie Sanders, not to mention the tariff-happy Donald Trump - has dampened Brunkow's hopes that the deal will ever actually get done.

"It does put us in a bit of a tough spot when the leading candidates do seem to be quite negative about trade," he said. He remembers similar debate in 1992, when a large trade deal with Mexico and Canada was in the offing. "To me, this seems a little worse," Brunkow says. "In NAFTA, we were having a debate, working on it for both sides. Whereas here, no matter which side you're on, there seems to be some negativity about this issue."

That sense of dread has rippled throughout the parts of the business community that have put the TPP at the top of their legislative to-do lists: Retailers and manufacturers seeking to source or export goods overseas, investors eager for stronger standards to make new countries safe for their capital, pharmaceutical and media and software companies trying to protect their intellectual property, insurance and consulting firms hoping to ease operations around the globe.

Of course, the language on the campaign trail hasn't reflected that level of complexity. Clinton came out against TPP early in her campaign, without offering many specifics as to why. Since then, she, Sanders, and Trump have focused their fire on how past trade deals have impacted manufacturing in states like Michigan, which have suffered in the most obvious ways from offshoring over the years. Trump has excoriated the Obama administration for U.S. trade deficits, and countered revelations that much of his own campaign swag is made in China by arguing for import barriers that would make that more difficult.

"We are a little disappointed in the extent to which candidates are hardening their positions on trade, and weaponizing trade as a political issue," said David French, senior vice president for government relations at the National Retail Federation. "The rhetoric on the part of the Democratic candidates and Donald Trump has increased the risk that TPP can't happen. You have to ask members of Congress to vote for it, and they're having a conversation with their voters, and if their voters are being driven by a Trump-vs.-Hillary-bash-trade dynamic, I'm not sure what happens."

Those who have been pushing TPP do understand that bashing trade is an effective political tactic at a time when many Americans are feeling economically insecure.

"I think, quite frankly, many of them are very frightened that the world is changing, and the world is a more challenging place," says Calman Cohen, president of a business group called the Emergency Committee for American Trade. "I think there is a sense that, 'can't we just leave things the way they are?' The answer to that is, the world has moved on. And you have a choice of wanting to work with it to get the benefits or try to suggest that you can just stop the world. And you can't."

But in the face of such a mood among voters, trade boosters feel somewhat helpless in getting across their message across, when the usual messengers are members of a political establishment that's fallen out of favor with large chunks of the electorate.

"I just think that folks that have been sort of traditional moderate voices on issues like the economy and trade are just not credible in the primary season right now," says Eric Schinfeld, president of the Washington Council on International Trade. "Those messages and messengers are just not in the right place at the right time."

The coalition that helped pass critical legislation last year that binds Congress to voting a deal up or down without amendments - known as trade promotion authority, or "fast track" - has been working during the primary season to place op-eds from small businesses in newspapers and reach out to others who might influence the relatively small population that votes in party primaries. On a higher level, groups like the Business Roundtable are trying to keep trade on the agenda for 2016 in desperate hope that it might pass before a new president takes office, despite increasingly negative signals from congressional leaders.

Even if it doesn't, Business Roundtable president John Engler said on a press call Tuesday that presidents have found a way to walk back statements made on the stump.

"At election time, the talk can be pretty negative, and later we end up being able to get things done," Engler said. Bill Clinton had opposed NAFTA during his campaign, and backed it when he got to the White House. President Obama had talked about renegotiating NAFTA, and is now pushing the TPP as a key part of his legacy. "There's nothing new about candidates running who are opposed to trade deals," Engler said. "What would be new is when they were elected, they held the same position."

But this election might be different. The TPP's Republican opposition has been empowered by Trump's anti-trade crusade, and that along with a similar dynamic on the Democratic side may bleed down into congressional races, worries Washington state's Schinfeld.

"Even if the mainstream candidates going into the election tack back towards the middle, a lot of the damage has already been done, which is the propagation of this false narrative that trade agreements are the problem," Schinfeld says. "You've just had this 18-month long anti-TPP public affairs campaign."

Meanwhile, the U.S. election isn't taking place in a vacuum. Other parties to the deal are watching to see if America can manage to finish it up - if not, there's little point in anyone else even trying.

Of course, Glenn Brunkow has other problems that could make or break his yearly budget, like interest rates and currency flows. The weather, especially, can be a killer. Trade, though, was something he thought he could control.

"It's on the front burner right now," Brunkow says. "This is something we can do something about."




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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