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President to Talk with Congressional Leaders on Advancing Trade Promotion Authority

Wednesday, December 10, 2014
Sandler, Travis & Rosenberg Trade Report

President Obama indicated in remarks to The Business Roundtable Dec. 3 that he will make a personal effort to advance trade promotion authority legislation, which supporters say is necessary to ensure that free trade agreements currently under negotiation with Europe and Pacific Rim countries have the best opportunity for congressional approval. Incoming Senate Finance Committee Chairman Orrin Hatch, R-Utah, said the same day that TPA will be a “top priority” for him when the 114th Congress convenes in January and that while he is willing to work with Democrats and the White House on it he will “not wait forever for everyone to be satisfied before moving forward.”

The president said he will be talking to the majority and minority leaders in both the House and Senate and “making a strong case on the merits as to why [TPA] has to get done.” He acknowledged that doing so will be “somewhat challenging” due to the perception that global competition has contributed to some of the stagnation in wages for U.S. workers. This is an “appealing argument,” he said, but is also a “half-truth.” While “there’s no doubt that some manufacturing moved offshore in the wake of China entering the WTO and as a consequence of NAFTA,” the president noted, “more of those jobs were lost because of automation and capital investment.” Further, he said, “over time, growth, investment, exports all have increased the capacity for working families to improve their economic standing.” It will therefore be important for leaders to talk directly to the public about why trade is “good for America, good for American businesses and good for American workers.”

The president also sought to downplay fears that further trade liberalization will lead to the loss of U.S. jobs to countries with lower regulatory burdens. “If somebody is wanting to outsource, if any of the companies here wanted to locate in China, you’ve already done it,” he said. “If you wanted to locate in a low-wage country with low labor standards and low environmental standards, there hasn’t been that much preventing you from doing so.” On the contrary, he added, trade agreements like the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership will actually require “some countries to boost their labor standards, boost their environmental standards, boost transparency, reduce corruption, increase intellectual property protection.” The president said he will therefore “have to engage directly with our friends in labor and our environmental organizations” to understand their opposition, while noting that there are “some of those same anti-trade impulses” among Republicans that will have to be addressed as well.

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