In his State of the Union address, President Obama made a passing reference to something called “trade promotion authority.” It is a tool that Congress in the past has given to the president, Democratic and Republican, for negotiating trade agreements. Lawmakers set guidelines for the White House in striking a deal. They also agree to a simple up-or-down vote on the final product — no amendments permitted, as they weigh whether to give their approval.
George W. Bush saw the authority expire in 2007. Barack Obama wants the authority renewed so that he can proceed on two fronts, concluding complex and promising trade agreements, the Transatlantic Trade and Investment Partnership, involving the European Union, and the Trans-Pacific Partnership, covering Japan and 10 other countries. Without the renewal, the agreements won’t be completed.
Thus, Americans will lose the opportunity to open new export markets overseas, where businesses can sell their goods, spurring growth and job creation. Northeast Ohio should be particularly keen on achieving the agreements. Expanding exports are crucial to the region’s prosperity, to its manufacturing sector and quality of life.
President Obama drew the connection, noting that 98 percent of our exporters are small businesses. Europe is this country’s largest export market, with $458 billion in goods and services in 2012. That stands to increase with tariffs eliminated and the differences in regulations and standards reduced. The same thinking applies to removing trade barriers in the Pacific Rim.
Unfortunately, on Wednesday, Harry Reid, the Senate majority leader, all but closed the door to renewing trade promotion authority. “I’m against fast track,” he declared, using the abbreviated description. He long has sided with many other Democrats who hold trade policy primarily responsible for lost jobs. He also is navigating the political landscape, seeking to maintain the Democratic majority in the Senate.
No doubt, trade has been part of the wrenching changes in an increasingly global economy. But it hardly has played a dominant role, say, compared to changes in technology. What also is clear is that expanded trade has created jobs, the American economy benefiting overall, even from the controversial North American Free Trade Agreement, now two decades old.
There are better ways to ease the rough aspects of trade than removing opportunities to move into new markets, or essentially shutting down the process of trade negotiations.
Trade agreements often are broad and many-layered, requiring difficult concessions from all sides. Fast-track, or trade promotion, authority makes more likely the deals coming together. Negotiators have confidence that once a compromise is reached, it will be in the agreement when Congress, or another country’s legislature, votes to approve or not.
Without such an arrangement, the process almost certainly becomes unmanageable, lawmakers, often echoing narrow interests, wanting to revamp provisions. Other countries then seek to do the same. So compromises break down, and the agreement collapses.
In that way, Harry Reid has taken a shortcut, the agreements out of reach with the president lacking the authority. That’s too bad. A struggling economy promises to gain momentum through expanded trade.