Lawfare's Quinta Jurecic on what's next for the January 6th Committee and the steps Congress can take to safeguard American democracy.
President Barack Obama says he has to have it. Congressional Democrats and some Republicans aren’t so sure. For years, the White House has lead the push for Fast Track trade authority, but that effort stumbled last week in the House when a related bill to provide assistance to displaced workers was voted down. Many in Congress are worried that if they give the president the authority to do all the negotiating, lower wage workers, and perhaps particularly those in their districts, will come out on the short end of the stick. We look at who could be helped and who could be hurt by the Trans-Pacific Partnership.
- Jeffrey Schott Senior fellow, trade policy and economic, Peterson Institute for International Economics.
- Thea Lee Deputy chief of staff, presidents office, AFL-CIO.
- Jim Tankersley Economic policy correspondent, The Washington Post; editor of the "Storyline" policy blog.
MS. DIANE REHMThanks for joining us. I'm Diane Rehm. House Democrats and a number of Republicans are reluctant to give the president the power to make a 12-nation Pacific trade deal. At issue for many is the economic impact. Who will benefit from the deal and who could lose. Joining me to talk about jobs, wages and the Trans-Pacific trade deal, Jeffrey Schott of the Peterson Institute for International Economics, Thea Lee of the AFL-CIO and Jim Tankersley of The Washington Post. I do invite you to join us, 800-433-8850. Send us an email to firstname.lastname@example.org. Follow us on Facebook or send us a Tweet. Thank you all for being here.
MR. JIM TANKERSLEYThank you.
MS. THEA LEEThank you, Diane. It's lovely to be here.
MR. JEFFREY SCHOTTAppreciate the invitation. Thanks.
REHMGood to see you all. Jim Tankersley, bring us up to date. Is there likely to be a second vote on providing assistance to displaced workers?
TANKERSLEYRight. We don't know. But it appears that there is going to be a long window for there to possibly be a second vote. This is the latest on these very sort of ups -- up and down negotiations after the deal was stalled by the votes on Friday. So, today, there's going to be a vote in the House on a new rule that will basically hold open the possibility of having another vote on Trade Adjustment Assistance until the end of July, it gives six more weeks.
REHMAll right. Tell us about the rule that stalled the vote on Friday.
TANKERSLEYWell, basically, for the bill to pass, two votes had to go through. One was on the Trade Promotion Authority, which would give -- allow the president so-called fast track. It will allow the president much more leeway in negotiating the deal. The second was a -- and Republicans expected they would provide the bulk of the votes for that and they just barely did. The second one was for Trade Adjustment Assistance, something Democrats have long favored. It gives money to workers whose jobs have been impacted by trade. Republicans don't tend to like this and so they expected Democrats to carry this. And Democrats who wanted to stop the whole package from going forward, defected from that en masse and it failed miserably.
REHMWhy did the Democrats defect from that?
TANKERSLEYWell, they were voting strategically. It's not that they don't want workers to get money who are hurt by trade deals. It's that they realize that if those two didn't pass, it very likely torpedoed the entire package. So now, the Republicans either need to muster their own votes to pass the Trade Adjustment Assistance or convince a whole bunch of Democrats -- the president has to convince a whole bunch of Democrats to switch. Or they have to pass it back to the Senate without Trade Adjustment Assistance and hope they can amend it there and get Democrats to go along, which is unlikely.
TANKERSLEYIt appears unlikely.
REHMAll right. And without it, what could be the next step?
TANKERSLEYWell it doesn't -- if this package stalls, it doesn't mean the Trans-Pacific Partnership is dead. It just means it's a lot harder. The president has said he needs this Trade Promotion Authority to make it (word?) -- to complete the deal. It's possible he could still try to negotiate it but then it would be much harder to get through Congress once he had. And it's, frankly, going to be much harder to complete the negotiations without it. So the likely outcome would be a stalling of the trade agenda at least until the next president takes office.
REHMJim Tankersley of The Washington Post. And to you, Thea Lee, of the AFL-CIO. Labor unions have been fighting this deal for quite a while. What are the objections?
LEEWell, we've been fighting to change this deal for quite a while. And we really did start five or six years ago, meeting with the administration, giving a lot of advice -- very concrete, constructive advice -- about what kind of a trade agreement we wanted to see. Our basic point is that trade, as we currently engage in trade policy in the United States, has not worked for working families. It has both cost jobs in the manufacturing sector, but it's also eroded our tax base in a lot of communities. And it's also put downward pressure on wages for a lot of workers in the United States. And it hasn't done very much to help workers in other countries exercise their basic human rights.
LEESo -- but I think the one way to sum it up is to say that this about shifting the balance of bargaining power in the global economy from working families to multi-national corporations. That there's too much in this agreement, on balance, that really helps corporations bully workers, bully governments -- democratically elected governments -- and that, on balance, this just fails the test. It doesn't do enough to bring our trade policy into the 21st century, to do the kinds of reforms that we need so that we can really get out of this vicious cycle of offshoring and undermining wages and lost jobs for the United States and for our trading partners.
REHMAre these the same kinds of arguments we heard against NAFTA?
LEEThey are the same kinds of arguments and the trade debate has evolved over the last 20-some-odd years and the trade agreements have evolved. But this particular one, I think, one of the problems is, it has not evolved enough. That President Obama sort of chose to take the template of past trade agreements and do a few tweaks around the edges. We had -- we had thought maybe this would be the time we would re-think how we deal with currency manipulation, with investment, with intellectual property rights and with really thinking about how we can strengthen and build on the foundation of the labor and environment protections that we've been fighting for all these years. But most of that didn't happen.
REHMThea Lee of the AFL-CIO. Jeffrey Schott, as you've heard, many people are wary because of what happened with NAFTA. How is this different?
SCHOTTThe international environment in which we live in and which international trade operates is totally different. Twenty years ago, 25 years ago, when NAFTA started negotiations, international trade was totally different. And people didn't talk on cell phones all the time. There were different ways of transporting goods. New technologies have made a big difference in the way international trade operates. Financial markets were a lot different. And so the world is a lot different.
SCHOTTAnd so the rhetoric that you hear that we should be having new trade rules to meet the challenges of the 21st century, those are in areas where the United States has huge advantages because of our technological advances in information technologies, in particular, but also transportation technologies. And those are areas where we can build in new rules and set the standards for the world trading system.
REHMBut at the same time, would you agree that NAFTA was somewhat oversold and that people are wary because of exactly that in regard to the TPP?
SCHOTTI'd say that NAFTA was incorrectly sold. Politicians oversold it in terms of job creation, in terms of increased employment. Because trade agreements don't increase employment by -- in and of themselves. They changed the composition of employment and encouraged the movement towards higher-paying, better jobs -- more secure employment. But they don't change the actual level. And politicians, both Democrat and Republican, for a long time, have misled the public debate in that because it's so simple to say, we're going to create more jobs. But the area where they have been incorrect is in saying how much the overall economy gains from trade agreements.
SCHOTTAnd there they have grossly underestimated the gains that have accrued from NAFTA and other trade agreements. And that has -- it takes a while to get that data because the agreements have to be implemented and sometimes it takes 10 or 20 years for that to happen. But they have -- almost every trade agreement has grossly overperformed what the original estimates have been. And the big problem that Thea has is, what do you do with those gains? And the domestic policies to redistribute the gains among different constituencies in the economy are where we have fallen flat. We haven't taken the steps to improve our competitiveness to deal with the plights of dislocated workers.
SCHOTTAnd so there is a good part of what she says that's correct.
REHMJeffrey Schott, he's senior fellow at the Peterson Institute for International Economics. Do join us, 800-433-8850. Jim, it could be proven that, as Jeffrey has said, the economy improves overall. But some sectors of the economy benefit a lot more than others.
TANKERSLEYAbsolutely. And I think, you know, what we've seen -- and sometimes sectors can improve but workers within those sectors might not improve. Manufacturing, for example, has continued to grow in output, even through all these -- the trade deals that have impacted manufacturing. But we have far fewer jobs in manufacturing now. And workers are generally, like the wage premium that a manufacturing job paid over another job in the economy, has shrunk fairly dramatically in the last couple of decades. In the case of the TPP, what's being negotiated, for example, one of the big sectors that appears to be a winner has breakdowns in who would be winners and losers, that's the pharmaceutical sector.
TANKERSLEYSo if you make big-name drugs that you can have a patent on, TPP appears to be very good for you because it would strengthen your patent protections internationally. If you make generic drugs and you care about getting lower cost generic drugs to more people around the world, it's a -- it appears to be a bad thing for that exact same reason.
REHMJim Tankersley, he's economic policy correspondent for The Washington Post. Short break here. I see we have lots of callers. We'll talk a little more and then take your calls and emails. Stay with us.
REHMAnd welcome back. We're talking about the Trans-Pacific trade deal and the efforts on behalf of some to stop the president from having fast-track trade authority and the bill that would have provided worker assistance was voted down last week. There is some thought that it will come up again. But there is time, lots of time, the end of July I think you said, Jim Tankersley. He's here in the studio. He's with The Washington Post. Also Thea Lee of the AFL-CIO and Jeffrey Schott of the Peterson Institute for International Affairs.
REHMJeffrey Schott, I wonder about the secrecy behind this deal and whether that has made people so anxious and really even more upset than they might have been had the whole thing been done in the open. Why the secrecy?
SCHOTTWell, you can't negotiate in the open. You can provide a lot more information about what the negotiations are trying to achieve. You can provide a lot more information about the possible changes that occur in domestic policies if the agreements are completed.
REHMBut haven't some of the largest industries had input into these negotiations?
SCHOTTYes, they have. And so has Thea and her colleagues. One of the things where the United States is far better than any other country is in the extent that private sector groups, non-governmental organizations, participate in advisory groups that give their opinions to the federal government. Some of those groups work better than others. And I suspect that the groups that I sit on, where we have proactive recommendations for U.S. negotiators, have been more constructive than some of the other groups.
REHMThea, why do you think this secrecy has been in place? And why does it seem so necessary?
LEEWell, I don't think the secrecy is necessary and I think it has backfired on the Obama administration. And the truth is that maybe 90 percent or even more of what's in the TPP, the draft TPP right now is identical to what has been in past trade agreements, like the Korea Trade Agreement. They take a template and they redo it. And so there aren't a lot of state secrets, honestly, involved there. But the fact that it's been kept so secret has been -- made it very, very difficult. Yes, I have access to some texts, what the U.S. government puts on the table. President Trumka is a member of the Labor Advisory Committee on Trade Policy and Negotiations. And he has security clearance, I have security clearance.
LEEBut it doesn't do me that much good, if I can read the text. And, first of all, nobody in USTR takes our opinions or views or suggestions into account. And, second of all, because I cannot talk about it to anybody outside of the security clearance. But, you know, one thing I think, for example, the Labor Advisory Committee wrote a report to Congress -- a detailed report about the TPP, about the draft TPP -- what we thought was problematic, what we thought they should do instead. And we sent it to USTR and we asked to give it to Congress. Now, Congress has security clearance, so I think this gives you a good example of why the secrecy is dysfunctional. It took them six weeks before they -- the lawyers at USTR could agree that they could pass...
REHMThe U.S. Trade Representative's office.
LEEAt the U.S. Trade Representative's office. And so, you know, we had this input that we wanted Congress to have, that Congress had asked for. Senator Mazie Hirono and 20 other senators asked to see this report. And yet they were delayed until after the Senate vote actually took place.
LEESo that -- that's not working for anybody.
REHMAnd here's an email from Q. in Cedar Key, Fla. He says, "My objection, as a loyal lefty progressive, was the secrecy. I'd have been able to consider the whole agreement more clearly if details weren't so secret." So, Jim Tankersley, did the secrecy benefit or backfire?
TANKERSLEYWell, I certainly think that it became an effective attack -- secrecy became an effective attack on the Obama administration, particularly from the left, but also from some of the grassroots conservative groups who are concerned about giving Obama, who they reflexively are wary of, this authority. Now, it's also important to know that giving the president Trade Promotion Authority is not akin to passing the deal. It just means that there would be a vote later, most likely, on a fully-negotiated deal. And no one is saying that that deal would be voted on in the dark. There would be some amount of public time to consider and debate the deal. It's just it couldn't be amended by Congress. It'd be an up-and-down vote.
REHMBut who said it had to be negotiated in this kind of secrecy, Thea?
LEEWell, you know, each administration -- I mean, Jeff is right. This is normally the way trade negotiations roll. And this is something that is an issue in other countries also. We are in touch with the unions and some of the (word?)...
REHMBut who does it benefit?
LEEWho does it benefit? Well, I think it's not benefiting the Obama administration because, if we could -- I mean, look at the chapters that have been leaked by WikiLeaks. You've had an investment chapter. You've had the pharmaceutical chapter, the intellectual property rights chapter. They've been leaked. That has not tanked the negotiations by any means. The other governments of the other countries already have this text. So it's not a secret from them. And I think it was Lloyd Doggett -- Congressman Lloyd Doggett said that the Vietnamese Politburo knows more about what's in the TTP than the U.S. Congress does.
REHMAnd according to the Communications Workers of America, Jeffrey Schott, this is part of an overall corporate and Wall Street agenda to make the world safer for corporate investment. It's going to allow trade without necessary regulation. It removes legal protections and undercuts workers' rights, dismantles labor, environmental health and financial laws and reduces labor costs.
SCHOTTWell, I think every one of those points is absolutely wrong. And -- but it comes from the fact that people who don't know what's going on, fear the worst. And that's why I said before, it's important to provide information about the objectives. Thea is right, most of what is in the trade agreement is modeled after...
SCHOTT...the -- it's actually almost the exact same words. If you look at the Korea-U.S. Free Trade Agreement, the previous and most expansive trade agreement that the United States has entered into, much of what is in the TPP echoes what is in the Korea deal. And so to say that all of these things are going to occur, there is no basis in fact for any of those charges. But there are fears.
LEEWell, most of the basis in fact has to do with the investor-state dispute settlement. I mean, that is one of the huge criticisms that a lot of people have -- not just in the United States, but around the world, and it's not just labor and environmentalists, but Democrats and Republicans -- are afraid of giving multi-national corporations the right to sue governments over legitimate environmental and public health regulations. And it's happened. We have decades now of experience with the investor-state dispute settlement. It's been very problematic. Sure, it's true that they don't automatically get to overturn laws. But they get to challenge laws. And what they do is they put governments on the defensive.
LEEIt's almost like, you know, the free-shot where the governments are just defending against the free-shots over and over and over again. And yeah, they get to defend most of them and they get to knock them out of the way. But every once in a while, one goes in. And then you have examples, like in Canada, where the Canadian government had denied a permit to aid a mining company, because you had an environmentally sensitive area in the Bay of Fundy. The U.S. company sued under NAFTA and won. So you had a lot of things -- that's not crazy to be afraid of what the impact is going to be over the next couple of decades.
REHMAnd, Jeff, you said that the deal would create new jobs. Where? In what sector?
SCHOTTI said the agreement would change the composition of employment and benefit those industries and U.S. farmers and U.S. workers who work in areas -- service industries, some manufacturing, certainly a lot of the farm communities and farm distribution -- where we can increase our exports, where we can get increased investment in the U.S. economy as well as investments abroad, to improve our competitiveness. Part of the job creation comes from being able to compete more effectively against imports that have been coming into the United States and will continue to come into the United States.
TANKERSLEYI think one of the most interesting things about the breakdown in the vote that happened on Friday was how you don't necessarily see members of the Congress voting on the potential economic impacts to their districts. That lots of Democrats, for example, who represent high export areas, which you might consider to be winners under this (word?), they can do more exporting -- voted no. And that some of them voted yes but it didn't match up perfectly. My former colleague Ron Brown has seen it. The National Journal has done great work on this. And it's fascinating to look at.
TANKERSLEYAnd I think it comes down to, it is hard for a member of Congress now to sell constituents on the idea that, hey, more trade is going to be good for us, unless you have really concrete examples. So if you look at my home state of Oregon, where there are real concrete examples of how they've been exporting, where a company like Nike says, there are bigger -- there are bigger markets for us out there that we're going to get access to, it's an easier sell. And 20 percent of the democratic votes for TPA came from Oregon. So I think most of the country you don't see that. And it's much easier to say, look, here are the jobs that have gone away under past trade deals. And you can point to and you can absolutely say, you know, NAFTA hurt the textile industry and here's how.
REHMThe president actually admitted to Kai Ryssdal on Marketplace that, in fact, there would be a loss of jobs. But that it would be good for the overall economy. How do you balance that, Thea?
LEEWell, that is the question. Is it good for the overall economy? What is the overall economy? There are real human beings underneath that. And if you look on net, I mean, I think one of the reasons that labor is so fed up and fought so hard against this particular deal is that we've had decades of broken promises around trade agreements. We actually hear the exact same rhetoric every time, starting with NAFTA, going through CAFTA and China Permanent Normal Trade Relations. And each time they say, this one's different. This is going to create lots of jobs. We're going to export.
LEEDon't you want to be part of the global economy? Of course, we want to be part of the global economy. Of course, we recognize that we need to trade. We need to invest. We need to have rules that are good for working people. But the truth is, our economy stinks right now for working people. We have enormous, grotesque inequality -- levels of inequality. And the trade agreements have exacerbated it. They have contributed to the inequality. They aren't part of the solution.
LEEAnd that's what people like Nobel Laureate Joe Stiglitz has said, Jeff Sachs from Columbia University, people who have been free traders all their lives are looking at this agreement and saying, hold up. It's not enough just to say this is a free trade agreement and therefore, because we passed Econ 101, it must be good. We need to look at the details. And when we look at the details and you unpack, the investors state that intellectual property rights, which as Jim said, you know, could be good for pharmaceutical companies. They have high profits already. But it might be bad for poor people in developing countries who need access to generic drugs. So, you know, a lot is at stake here.
LEEAnd then, you know, one more important thing, on currency manipulation, we're going to open markets by removing tariffs. And yet our administration hasn't done anything to address the most important competitive disadvantage for American manufacturers and workers, which is currency manipulation.
REHMThea Lee of the AFL-CIO. And you're listening to "The Diane Rehm Show." Jeffrey, what about currency manipulation? Will that be part of the agreement eventually?
SCHOTTNo. And that's not just because I was a former Treasury official. It's because it's very difficult to define what currency manipulation is. But under almost any standard that one would develop, major trading nations are not engaging in currency manipulation right now.
SCHOTTEven China. Particularly China. This is a problem that was very difficult and very strong a decade ago. And there's been a big change in Chinese policy. Now a lot of the political fire is still directed at China. But if you put in everything that Thea wanted on currency manipulation in the TPP, it wouldn't have any effect immediately. The desire would be, well, you put in a deterrent to prevent countries from going back to the bad old ways of the past. But that is something that should be done and is being done through financial diplomacy. The Treasury has made great strides with China and with other countries. And there needs to be more done through the International Monetary Fund, which hasn't done as much.
LEEWell, Jeff Schott, as a former international trade negotiator, that was a terrible answer. The fact that countries may not be, at this moment, manipulating their currencies, is not a reason not to include this in the TPP.
REHMBut do you agree that, right now, China and other countries are not manipulating currency?
LEEI don't totally agree. I think China still is guilty. China runs enormous trade surpluses and has enormous -- I think $4 trillion worth of -- reserves of foreign currencies. And so I think, first of all, when you negotiate TPP, it is eternal. It's not -- you're not going to go back and add currency three years from now when you might have a problem with it. It ought to be easy to negotiate currency provisions, if in fact countries are not manipulating their currencies and don't plan to.
SCHOTTIt isn't easy because, first of all, negotiators don't know how to do it in a trade agreement. And you can do it in a way that really screws things up. And the financial system is far too important to let amateurs get in the way. But it is an issue that requires high-level attention by finance ministers and central bankers.
REHMBut you're saying it doesn't belong in the trade agreement, itself.
REHMAnd why is that?
SCHOTTWell, because this is an area where you're dealing with factors that involve the policies that affect the macro economy. And the policies that are done, like the Fed's quantitative easing, will be considered by many of our trading partners to be manipulating or leading to a decline in the U.S. currency. It had that effect. But that wasn't the purpose of the actions by the Fed, nor should it be subject to disciplines in our trade agreements.
REHMHow much is currency manipulation a concern within that entire trade agreement, Jim?
TANKERSLEYWell, right now, I mean, I think there's two ways to look at this, both in the grand scheme of things, like Thea is saying long term. I think, in the short term, the IMF says China is no longer manipulating its currency. This Treasury Department has yet to declare them a currency manipulator. You have plenty of economists and politicians who disagree. But I do think the long-term question is the important one here.
REHMJim Tankersley of The Washington Post. Short break. When we come back, it's your turn. I look forward to hearing from you.
REHMAnd welcome back. Time, pardon me, to open the phones to Ron in Louisville, Kentucky. You're on the air, Ron.
RONHi. I just wanted to point out that this is an ironic time -- this is coming at an ironic time because the -- we're just now changing our laws to not allow for or not require country of origin on meat products and other agricultural products as a result of a former trade agreement. And so right at the same time that we are complying with a WTO directive not to have these laws, the -- we're negotiating another trade-back, which is going to subject us to more international court things that will not allow the United States to set its own rules.
REHMWhat about that, Jeff?
SCHOTTWell, generally we draft international agreements that comply and basically confirm what we're already doing. That's what U.S. negotiators like to do, essentially just codify U.S. practice. But unlike other countries, when we reach an agreement, we have to change U.S. laws to comply with the new obligations. The agreement itself doesn't become a part of the body of U.S. law. And there are interpretations that can differ in some areas, where other countries will challenge the way we have modified our laws. And this case that the gentleman brought up is one of those.
LEEI think Ron raises a great point. The country of origin labeling for meat, do customers want to walk into the supermarket and know where the meat comes from? And what we were just told by the World Trade Organization is that we are not allowed to put that label on meat because it's unfair to Canadian and Mexican meat, and I think that's crazy. And this is also very contrary to what President Obama has told us. He says nothing in these trade agreements is going to force us to change any of our laws.
LEENow Jeff is right, you know, the trade agreements don't automatically go into the U.S. legal system and change our laws, but we are presented with a choice that if we don't change the law, we end up having to pay penalties to other countries.
REHMBut what about food safety and concerns about food safety, then, in regard to this agreement, Jim?
TANKERSLEYI mean, I think that the argument, to play a little devil's advocate here, I think the argument would also be that, you know, we have stronger food safety laws than a lot of the countries that we enter into these agreements with, and so therefore, you know, if we start harmonizing regulations, the idea would hopefully be that they would have to adopt safer practices themselves. They would not be able to discriminate against our agricultural products, which is a big point that farmers, who tend to be in favor of many of these agreements, make.
REHMSo overall, you think it could be a benefit because those countries would have to adopt our rules?
MS. MELISSA SILVERSTEINI think one of the arguments in favor of these agreements has been, traditionally, that we can open more access for our products and get more countries to adopt better regulations than they have now. That is one of the arguments for it.
REHMAnd you don't believe that can happen?
LEEWe don't have a lot of faith that that is going to happen. And, you know, first of all, in terms of customs enforcement, we don't even have -- you know, we inspect maybe one percent of the produce and products that come across our borders. We aren't sending inspectors into factories in Vietnam or Malaysia or Mexico. And so, you know, whether we accept as equivalent the standards in other countries, I think that is undermining to U.S. producers, who have very high standards, who should have high standards, and I think consumers, American consumers, expect that we will be able to, when you walk into a store, have confidence that that product is safe.
REHMAll right, let's go to Port Orange, Florida. Hi there, Lance, you're on the air.
LANCEHi Diane, really appreciate the show. You know, I wanted to make a statement. You know, I think it would be impossible to inspect everything that came into this country. The amount of people that we would require to do that would be immense, and we don't have the finances to do that. One other thing, you know, I voted for President Obama, and on some level in voting for him, I basically said that I trust this man. And, you know, of course people are going to have different perspectives and different points of view, which I think is healthy, but on some level, when do we give this guy the opportunity to either succeed or fail? You know...
REHMThat's a thoughtful comment.
LEEWell, I voted for President Obama, too, and I have a lot of faith in him, and I've supported him through thick and thin up until now, but we have a fundamental disagreement about the direction of trade policy, and I think he made a mistake with the TPP. I think he gave the wrong instructions to his negotiators, and they negotiated an agreement that has serious problems and shortcomings. And this is our job, is to make that agreement better, not to kill it, not to kill trade, not to stop trading with the rest of the world but to make that agreement really live up to its potential.
LEEAnd that's why we're so engaged.
REHMTo Mike in Cincinnati, Ohio, you're on the air.
MIKEHi. I had two comments. One, you had mentioned what Obama had said to Kai Ryssdal about the loss of jobs.
MIKEAnd I just think it's unconscionable because Obama's done nothing for jobs. I remember he set up -- you know, he got Jeffrey Immelt to be his job czar, and Immelt set up a really cool website, but that's about it. And Obama hasn't really talked about jobs other than when he was forced to during the '08 campaign, you know, I mean, I'm sorry, the '12 campaign. And then my second comment had to do with transparency and, you know, keeping this legislation secret.
MIKEAnd I remember one of the cornerstones of Obama's '08 campaign was, you know, government transparency, and he had said specifically that we would not pass any legislation unless it was made public for five days for the public to review and comment on.
REHMI wonder, is that built in at the end, Jeffrey?
SCHOTTWell, it's critical to disabuse the caller of the - on the jobs issue. President Obama came into office in January 2009 when the economy was in freefall, and hundreds of thousands of people were losing their jobs every month. He took very dramatic and immediate action. He saved the U.S. auto industry, tens of thousands of auto worker jobs. He righted the economy in only about nine or 10 months, and that effort really was - involved a massive amount of political bargaining and capital with the Congress, and he succeeded.
SCHOTTAnd it was the first year of his presidency, so people are maybe forgetting it now, but boy, if - when history looks back at President Obama's two terms, they're going to say that first year was when he really saved our country.
REHMI think our memories are short, and we always ask what have you done for me lately.
LEEI totally agree with Jeff on this point. I think President Obama worked hard. He walked into office in the middle of a deep, deep financial crisis. He worked hard for the stimulus package, for investment, and he's worked hard for the Affordable Care Act, which has been good for jobs, as well. But I think the key thing is right now in terms of the timing of the Trans-Pacific Partnership and the fast track battle. We would have really liked to see, if President Obama's going to look for one thing for his legacy, what about infrastructure.
LEEThis is an area where there has been traditionally business and labor support, Republican and Democratic support, where our country has a $3 trillion deficit in infrastructure.
REHMSo you're saying the country needs to see that at the same time it sees these new trade deals.
LEEAbsolutely, to see the same level of energy from President Obama to fight for a real, significant investment in infrastructure now, before we barrel ahead with this fast-track and trade deal.
TANKERSLEYI mean, I would point out, though, that the president has been talking about infrastructure for a long time. He puts it in every State of the Union speech. He's been calling for it forever. He's put numbers on it. And I would also point out that yes, people realize that President Obama, they also elected a Republican House and a Republican Senate, and I believe that what the president saw in trade was a potential to do a priority of Republicans and the business community that also has traditionally had some support from Democrats and which he personally supports and that he believes is part of his economic job creation goal of boosting exports.
TANKERSLEYNow I believe what happened was he ran into a coalition of progressives and Tea Party Republicans who don't share his opinions on that.
REHMAll right, to Melinda here in Washington, D.C. You're on the air.
MELINDAHi, thanks for taking my call. My comment is about the fact that the only U.S. government study on the likely impact of the TPP on U.S. economic growth concluded that it would produce exactly zero economic growth for the United States. Meanwhile, the TPP includes U.S. job offshoring incentives that were included in NAFTA, and it would pit U.S. workers against workers in Vietnam that make less than 60 cents an hour, which would put downward pressure on our wages.
MELINDASo it's little wonder that economists who supported past trade deals, from Paul Krugman to Robert Reich, have come out against the TPP.
SCHOTTWell, there have been a number of very good studies done on the potential for the TPP, and they all have concluded that the TPP would result in significant increases in U.S. output and trade.
REHMAll right, output and trade, but what does that mean for jobs?
SCHOTTIt means that Americans have more money to spend for consumer goods...
REHMBut what does it mean for jobs here in this country?
LEEAnd Americans don't have more money to spend, Jeff. That's exactly the problem with the U.S. economy. Eighty percent of America's citizens are worse off than they were in terms of income. I mean, you talked about the shift to better-paying jobs, I'm sorry, but we have not seen a shift to better-paying jobs with trade agreements.
SCHOTTWe don't have the TPP yet, Thea.
LEEOh, but we have everything else that you advocated for, and none of them delivered on those same, those same kinds of promises. In terms of jobs, I think, you know, you do see, first of all, the market access is not that big a deal because we have trade agreements with more than half the TPP countries. So you're really looking at a small group. You're looking at Japan, Vietnam, Malaysia as the major countries, and then New Zealand and Brunei, which are very small.
LEEWe already have, you know, pretty good access to - I mean, Japan doesn't have high tariffs. What they have is non-tariff barriers. And it's not clear at all that our trade negotiators know how to open a closed market that has non-tariff barriers.
REHMSo what happens to the industries that would be affected if there is no trade deal, Jeffrey?
SCHOTTWell, the first thing that happens if there's no trade deal is that we - the status quo in terms of access to the U.S. market remains, you know, remains the same. Foreigners still have good access to the U.S. market, and U.S. firms and workers and farmers don't have better access to foreign markets. But everyone else is changing their policies to become more productive, and in a very dynamic world economy, standing pat means falling behind, and we are falling behind if we don't move forward not only on our trade agenda but also on our domestic agenda and infrastructure.
LEEAnd that's where we failed. We failed to invest in infrastructure. We failed to invest in education and skills that American workers need to be competitive in the global economy. We're putting the cart before the horse. We need to invest at home to be more competitive, and we need a different and a better kind of trade agreement that will achieve that.
REHMAll right, and to, let's see -- Old Lyme, Connecticut, Dave, you're on the air.
DAVEHi, my question is about two commentaries I heard by Jim Hightower on public radio. And in addition to the trade aspects of this agreement, he thought - he felt it was not a trade pact at all, but it gave foreign governments and corporations the rights to tell states what they can and can't do on their own land about things like coal pollution and fracking, things of that nature.
DAVEAlso, he said there are four provisions that are classified until four years after this would go through. So we don't even know what we're agreeing to.
REHMAnd you're listening to the Diane Rehm Show. Thea, do you want to respond?
LEEDave is exactly right. This is not just a trade agreement. It's a trade and investment agreement, and that's really where we fall down. If we think about just opening export markets, we have to think also about what is going to be the impact on our domestic regulatory structure, on our decision-making, and the investor-state dispute settlement chapter is unnecessary. It's unnecessary, it gives corporations rights that nobody else in the agreement has. Unions or environmental groups or individuals do not have the right to sue governments over regulations they don't like, and yet we've granted that under the TPP and other trade deals.
REHMJim, do you want to comment?
TANKERSLEYI mean, I just think this is going to be one of the -- I mean this is clearly one of the big points that is sinking the negotiations or the votes in Congress right now. I would also add, though, and I feel like I keep making the Obama's administration's arguments for them, but they're not here. One of the arguments that they have made, which has been interesting in how it has fallen very flat among Democrats in particular, is this idea that this is not just a trade deal, this is about global leadership. This is a national security deal because it shows the United States is back in the driver's seat, and it's using diplomacy in a way that - to substitute for military power.
TANKERSLEYThey -- the Obama has made that argument a lot, they've made it a lot to Democrats, and it appears to have had very little sway on them.
REHMWhat do you make of the fact that Hillary Clinton has not come down on either side?
TANKERSLEYWell, she sort of came down this weekend and basically endorsed what Democrats did in voting against the trade adjustment...
REHMEndorsed Nancy Pelosi stepping away from it.
TANKERSLEYEndorsed Nancy Pelosi. Hillary Clinton has also spoken several times in the past in favor of the negotiations for the Trans-Pacific Partnership, when she was secretary of state. Look, she's running for president, she has a base to reach out to, and she also has always had a very tough, thin line to walk on trade in these campaigns because, again, of the experiences of NAFTA and the way that the Democratic base voters in particular feel like, you know, a deal her husband pushed through absolutely affected their jobs.
REHMNow Jeffrey, if this doesn't go through, will there be another chance?
SCHOTTIf the legislation doesn't go through, there better be more efforts because right now, we're basically going to be in a very difficult position and seen as an unreliable partner in Asia, both for commercial relations and for strategic relations. And that's going to mean that other countries are going to start thinking, well, maybe I have a little more room to make mischief than I otherwise would have.
REHMWhat kind of mischief?
SCHOTTBoth commercial and strategic, and you see that with operations in the South China Sea, you can see that with provocations with regard to North Korea. There are just a lot of reasons why countries in Asia want the U.S. engaged and wanted the U.S. to be in the Trans-Pacific Partnership well beyond the commercial reasons, because they already have good access to the U.S. market.
REHMAll right, I'll give you the last, brief word, Thea.
LEEWell, I think the failure of this vote should be a wakeup call both to our negotiators and maybe to the other countries to really rethink what do we need in this. And the truth is that some of the things that are unpopular in the United States, like the investor-state dispute settlement, are unpopular in the other TPP countries, as well, as well as the 12-year monopoly on biologics, the unfair pharmaceutical provisions that are there. So we should go start fresh.
REHMAnd your prediction, Jim, will they vote again soon or - sooner or later?
TANKERSLEYThere will be a vote. I don't know how soon it will be, and I don't know what will happen.
TANKERSLEYThe fun drama of D.C. right now.
REHMJim Tankersley at The Washington Post, Thea Lee deputy chief of staff, presidents office, AFL-CIO, and Jeffrey Schott of the Peterson Institute for International Economics. Thank you all so much.
LEEThank you so much, Diane.
TANKERSLEYThank you, Diane.
REHMAnd thanks, all, for listening. I'm Diane Rehm.
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