President Obama is testing one of the hard-and-fast rules of Washington politics: don’t try to pass a trade deal during a presidential election year. The White House would be helped in defying the conventional wisdom if some of the current crop of presidential candidates came out in favor of the Trans-Pacific Partnership (TPP). But so far it looks as if candidates are rallying against TPP rather than for it.
The White House has always known that TPP would be a tough sell to Democrat presidential candidates. Trade deals aren’t popular with the Democratic rank-and-file, so it’s hardly surprising that they aren’t popular with candidates trying to win over those voters.
Senator Bernie Sanders is a long-time critic of U.S. trade policy. He is blunt. He has yet to see a trade deal that he likes:
Martin O’Malley took up the say-no-to-trade-promotion-authority (TPA) cause when he joined the campaign. He now says he is "against the Trans Pacific Partnership” and that he “let people know that from the outset." The White House probably hoped that Hillary Clinton would embrace the trade deal she once touted as the “gold standard” and thereby offset criticism from Sanders and O’Malley. But she came out against TPP earlier this fall.
In theory, TPP should be receiving a warm reception among Republican presidential candidates. After all, Republicans have been big supporters of free trade ever since the end of World War II. But so far that hasn’t happened. The only GOP candidate to support TPP unabashedly is Jeb Bush. He says he has “no problem supporting TPP.” But he also is trailing in a nomination race he was once expected to dominate.
A few Republican candidates are keeping the door open to supporting TPP. Ben Carson’s spokesman says that the former pediatric neurosurgeon “is now inclined to support TPP.” The spokesman added, however, that Carson’s support comes “with reservations” that he didn’t spell out.
The Trans-Pacific Partnership…will further our strategic goals in Asia and increase prosperity at home. It will advance economic liberty and unleash free-market forces in the world’s most dynamic region. It will create the opportunity for emerging economies to become the next “tigers” of Asia and enhance linkages between nations in the Western Hemisphere and East Asia.
But a Rubio spokesperson said last week that the Senator has yet to decide whether to support TPP. And while TPP came up as a topic at Tuesday night’s GOP debate, no one thought to ask Rubio where he stood on the issue.
The moderators also didn’t ask Ted Cruz where he stands on TPP. Back in April he co-authored an op-ed with Paul Ryan on why TPA is a good thing. But Cruz turned against TPA when it came before the Senate in June, decrying the process that produced it as another example of the “Washington cartel.” His website now says that Cruz “will wait until the [TPP] agreement is finalized and he has a chance to study it carefully to ensure that the agreement will open more markets to American-made products, create jobs, and grow our economy.”
Tuesday night’s debate moderators did ask Donald Trump about TPP. He left no doubt that he is firmly and unequivocally against it:
The TPP is horrible deal. It is a deal that is going to lead to nothing but trouble. It’s a deal that was designed for China to come in, as they always do, through the back door and totally take advantage of everyone. It’s 5,600 pages long. So complex that nobodies read it.
One might ask, if no one has read the full text of the deal, how do we know it’s a bad deal? But put that quibble aside. Trump has a specific objection to TPP: it doesn’t prevent countries from driving down the value of their currency relative to the dollar in a bid to boost their exports:
Well, the currency manipulation they don’t discuss in the agreement, which is a disaster. If you look at the way China and India and almost everybody takes advantage of the United States — China in particular, because they’re so good. It’s the number-one abuser of this country. And if you look at the way they take advantage, it’s through currency manipulation. It’s not even discussed in the almost 6,000-page agreement. It’s not even discussed.
Trump is by no means the only one who thinks currency manipulation is a major problem in the global economy. But he failed to note that TPP comes with a side agreement on how the twelve signatories to the deal plan to tackle the problem. That side deal was good enough to persuade Fred Bergsten, the former president of the Peterson Institute for International Economics and one of the leading voices in calling for TPP to address currency manipulation, to say that the Obama administration had ”achieved an important distinction in the annals of debates over trade policy.”
Carly Fiorina also opposes TPP, though like Trump she is quick to say she favors free trade. Her knock on TPP is that “there’s a whole bunch of stuff in there that can only be described as crony capitalism, special giveaways to certain industries.” Of course, trade deals almost by definition give industries something or take something away. Which is which frequently lies in the eye of the beholder. For instance, TPP’s provisions on the duration of intellectual property protection for biologics, a new class of drugs, has been denounced both for giving pharmaceutical companies too much protection and too little. Fiorina hasn’t said which industries she thinks got a better deal than they deserved.
Fiorina says that rather than pursuing a multilateral deal like TPP, the United States should negotiate with other countries one-on-one:
Bilateral agreements are always more effective. We have more leverage.
Trump pressed the same point in Tuesday night’s debate:
I’d rather make individual deals with individual countries. We will do much better.
The United States has negotiated bilateral trade deals. The U.S.-Korea Free Trade Agreement, which went into effect in 2012, is one notable example. But historically multilateral trade agreements have been far more effective and significant for the United States precisely because they bring more countries into the liberal economic trading order. Indeed, most economists would agree that multilateral trade rounds conducted under the General Agreement on Tariffs and Trade were a major factor in stimulating global growth in the half century after the end of World War II.
None of these details about trade policy are likely to matter much to voters. The bigger lesson here is that what voters are hearing from the major presidential candidates are lots of reasons to dislike TPP and not many reasons to favor it. And that one-way political conversation will make it much harder for President Obama to rewrite the rules of Washington politics.