Why House Democrats Might Kill Obama's Big Trade Deal

January 11, 2014
WASHINGTON — President Barack Obama’s international trade agenda is dead in the water if he doesn’t do a better job engaging with Democrats in Congress, and his administration appears to be getting that message, Democrats said Friday.

Congressional Democrats have often been frustrated by his lack of attention to their concerns, but they’ve been especially disturbed lately that in his grand pivot to Asia and push for a 12-nation trade pact dubbed the Trans-Pacific Partnership, they and the rest of Congress largely have been cut out of negotiations.

“We want transparency. We want to see what’s going on there,” House Minority Leader Nancy Pelosi (D-Calif.) told reporters. “We have a problem with that.”

As a result, many Democrats fear the actual terms of the deal do not reflect traditional Democratic Party policy priorities.

“This is a big problem now,” said Rep. Chris Van Hollen (D-Md.), the top Democrat on the House Budget Committee. “There is inadequate engagement on the substance of what will be in an agreement or out of an agreement.”

Democrats in the House and Senate have complained for years about the secrecy standards the Obama administration has applied to the TPP, forcing members to jump over hurdles to see negotiation texts, and blocking staffer involvement. In 2012, Sen. Ron Wyden (D-Ore.) complained that corporate lobbyists were given easy access while his office was being stymied, and even introduced protest legislation requiring more congressional input.

The issue came to a head Thursday in two ways. In one case, Obama’s new nominee for China ambassador, Sen. Max Baucus (D-Mont.), angered his party by introducing fast-track trade legislation backed by the White House. The bill would ease the passage of the TPP and is co-sponsored by Sen. Orrin Hatch (R-Utah) and House Ways and Means Committee Chairman Dave Camp (R-Mich.). But most Democrats oppose the bill, and ultimately, Baucus and the administration introduced the legislation without a House Democratic co-sponsor — a public embarrassment that prompted House Speaker John Boehner (R-Ohio) to declare Obama needs to get his act together on trade policy.

Also Thursday, U.S. Trade Representative Michael Froman met with Democratic members of the Ways and Means Committee, and got an earful, lawmakers told HuffPost.

“We had a very frank discussion,” said Rep. Sander Levin of Michigan, the top Democrat on the committee.

“They’ve said that they welcome congressional input,” said Van Hollen, who also attended the meeting. “But in terms of actually establishing the mechanisms, they haven’t put forward a proposal. But we should be putting those proposals on the table. Any administration is going to try and maintain maximum flexibility. It’s up to the Congress to insist that we have an important role in the process.”

Democrats are especially determined to win a role in negotiations because the bill introduced by Baucus, the departing chairman of the Senate Finance Committee, would grant the administration the ability to present Congress with trade deals that could not be amended, leaving lawmakers to take it or leave it, including on the TPP, which is opposed by many progressive groups and some tea party activists.

With opposition from the right, the administration needs to shore up support from Democrats to move the trade agenda ahead. And the Baucus bill didn’t help. Even Democrats like Oregon Rep. Earl Blumenauer, who are more open to free-trade deals with the right protections, think Baucus’ effort does little to improve the last fast-track bill Congress passed in 2002.

“I think it’s a mistake. I think it’s going to make it very hard to pass, and frankly, I don’t think it should,” said Blumenauer. “I’m a little disappointed that something’s dropped [introduced] that was never discussed with Democrats in the House. As I understand it, it wasn’t actually discussed with Democrats in the Senate.”

“It’s interesting Baucus introduced his bill without any — I think a couple senators endorsed it — but without any other Democratic senator on it,” Levin said.

“And most of them hadn’t seen his bill when he introduced it, including the new chairman,” he said, referring to Wyden, who is replacing Baucus at the head of the Finance Committee.

There’s a lot at stake for Democrats and the president in working out their rough spots. If they don’t, Obama’s trade agenda stalls. And for Democrats, giving the White House too much authority could undercut the centerpiece of the 2014 election argument — that they are the party that will deal with income inequality and help the middle class. That’s because many in their own party, especially grassroots activists and unions, blame flaws in previous grand trade deals like the North American Free Trade Agreement for siphoning off middle class jobs.

“We have had a trade deficit that has exceeded $350 billion every single year for the past 13 years. We have this enormous staggering problem with our economy called the continuing trade deficit, and this is a measure that would make that worse,” Rep. Alan Grayson (D-Fla.) said. “The classic example of this is NAFTA. NAFTA has managed to hurt American workers and Mexican workers at the same time.”

And most Democrats don’t think the pending TPP deal addresses numerous labor, environmental and other issues adequately. Like NAFTA, the TPP would empower foreign corporations to directly challenge the laws and regulations of a country before an international tribunal. Under other trade frameworks, like the World Trade Organization treaties, only nations themselves are permitted to bring trade cases before an international arbiter, meaning companies must first win support from a government before attacking a law. Exxon Mobil, Dow Chemical, Eli Lilly and other corporations have used NAFTA to attempt to overturn Canadian regulations regarding offshore oil drilling, fracking, pesticides, drug patents and other issues.

Progressives like Grayson have long been critical of free trade deals because of their empowerment of corporations. But even members of the House Democratic leadership who have traditionally supported such pacts are upset over the current deal and worried about its impact on their 2014 message.

“No one should believe that negotiations on TPP are over, because almost — again — all the key issues remain,” said Levin.

“Congress must have a robust role in the oversight of any trade deal,” said Rep. Steve Israel (D-N.Y.) chairman of the Democratic Congressional Campaign Committee. “I will continue working with my colleagues to ensure any trade deal reflects 21st century realities, protects the American worker and is only agreed to after adequate and necessary consultation with Congress.”

Still, boosting trade does fit into the Democrats’ agenda if it helps boost exports and create new jobs in America.

“We need to deal with trade. I don’t think there’s a member of Congress who isn’t pro-trade, but it’s got to be pro-American worker, pro-American consumer, pro-American business,” sai
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ep. Xavier Becerra (D-Calif.). “Otherwise, why are we opening up our markets to people if we’re going to get raped?”

Becerra and others acknowledge there is a great deal of pressure, in general, to take steps that promise economic growth with the economy still limping along and producing too few jobs. Crafting a trade deal that pleases their base, however, won’t come easily, and almost certainly not before the election, especially if the Obama administration offers Democrats little more than token input.

“This place doesn’t work on amorphous pressure. It works on touch-and-feel pressure. Unless we can come together on something that collectively, bipartisanly, we think can work, I think it’s going to be tough,” said Becerra. “It won’t be fast. It might be on a track, but it won’t be fast.”