international analysis and commentary

The domestic politics of trade agreements in the US

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From the very beginning of the talks over a Transatlantic Trade and Investment Partnership (TTIP), the landmark free trade deal between the European Union and the United States, the political calendar on either side of the Atlantic was expected to impact their pace. In 2014, elections for the European Parliament and the appointment of a new European Commission, as well as a new President of the European Council, slowed down political processes over the summer and the fall. In the United States, the looming midterm elections in November ensured that trade policy was all but absent from the Congressional agenda, as campaigns focused on more immediate domestic issues. Now, with electoral transitions behind them, policy makers in both the EU and the US are proclaiming a fresh start for TTIP negotiations.

On the US side this means that the focus is now on legislative action, specifically on the question of whether Congress will grant Trade Promotion Authority (TPA), the authority for the President to enter into trade agreements and to have the subsequently necessary legislation (formally writing a trade deal into US law) considered under expedited procedures. Although President Obama had requested this authority as early as July 2013, any efforts to pass it in Congress has so far been blocked.

With the midterm elections over, many observers now expect the new Republican majority in both houses of the legislature to be able to push TPA through more easily. This assessment is largely based on the widely held belief that Republicans are by and large more favorably disposed towards free trade and thus more likely to press ahead with negotiations.

However, this storyline overlooks two possible fault lines. First, a potential conflict of interest within the Republican Party may arise as TPA would hand a Democratic president the opportunity to conclude one, if not several major trade agreements (the Trans-Pacific Partnership, or TPP, is also being negotiated with several countries in East Asia), even before the 2016 presidential elections in the US. Secondly, while it is true that Republican leaders and the traditional, pro-business wing of the party are robust promoters of trade liberalization, the sentiment among the general public, including many Republican voters, differs significantly. Contrary to conventional wisdom, polls have found many Republicans to be exceedingly critical of trade deals. In a June 2014 Pew survey, 51% of “socially conservative populists” said that trade agreements were bad for the country. In other Pew polls, Republicans were as likely if not more likely than Democrats to state that trade destroys jobs (54% of Republicans agreed) and were highly skeptical even of increased foreign investments. More Democrats than Republicans believe the two major trade deals currently being negotiated by the US, TPP and TTIP, to be beneficial for the country. For example, in an April 2014 Pew poll, only 44% of Republicans (as opposed to 60% of Democrats) said that TTIP would be good for the United States.    

For the time being, these potentially challenging numbers are attenuated by the fact that trade in general and TTIP specifically are not featuring very prominently in the public debate. So the discussion remains confined to policy makers and organized interests – business associations, NGOs, and trade unions – on either side of the aisle. However, as TPP negotiations (which were started much earlier than those for the TTIP) near conclusion, the controversial issue of trade deals may finally spark the interest of people beyond the Beltway.

In light of these circumstances, it seems that passing Trade Promotion Authority as a bipartisan effort could offer crucial advantages for proponents of trade deals in both parties (including providing cover for potential no-votes). However, agreeing on a bipartisan TPA legislation could prove challenging. Earlier in the year, civil society groups stepped up pressure on Congress to reform TPA. Incidentally, such discussions mirror concerns in Europe, as new trade agreements like TTIP are seen as going far beyond traditional trade deals and touching on areas typically thought of as falling under the realm of domestic policy making. Passing truly bipartisan trade-related legislation in the US has proved tricky before. The last successful deliberations over the granting of TPA in 2002 saw a host of conflicts, for example over the non-inclusion of minimal enforceable labor standards, so that the original House version of the legislation passed by only one vote.

Given the fact that leaders of both parties have singled out trade policy as a potential issue for bipartisan agreement, it now seems likely that Trade Promotion Authority could be granted at some point in 2015. However, the highly partisan experience of the past six years and potentially overlooked conflicts within parties suggest that successful passage of TPA is not yet a certainty.