The news this morning from Atlanta is that negotiators have struck a deal on the Trans-Pacific Partnership (TPP). This was a long time coming, from the time the Bush Administration announced the US intention to join (if we’re measuring in years) to the time this ministerial was meant to conclude (last Thursday).
So, is it time to break out the champagne? That’s harder to answer. As I wrote last week, the difference between the best possible outcome and the worst possible outcome did not hinge on whether a deal was struck. It hinged on whether the deal could win majority support in both houses of Congress.
The early returns this morning are worrisome. The administration’s trade negotiators had two jobs this weekend: 1. Reach a deal with 11 other countries; 2. Make sure key supporters in Congress remained happy. Oddly, the administration seemed to regard House Ways and Means Ranking Minority Member Sandy Levin (D-MI) as a key supporter, even though he has consistently questioned the TPP.
No, if the administration were being practical, particularly in a time of House leadership flux, there were two figures who needed to be made happy: Senate Finance Committee Chairman Orrin Hatch (R-UT) and House Ways and Means Committee Chairman Paul Ryan (R-WI). They chair the committees that oversee international trade agreements and their opinions will carry a great deal of weight within the Republican caucus (the caucus which provided over 85% of the votes for trade negotiating authority in June).
If this had been done well, Ryan and Hatch would have come out with ringing endorsements at the same time as the announcements. Instead, Chairman Ryan released a statement on the TPP: “only a good agreement—and one that meets congressional guidelines in the newly enacted Trade Promotion Authority—will be able to pass the House. I am reserving judgment until I am able to review the final text and consult with my colleagues and my constituents.”
That actually sounds good compared to Chairman Hatch, who opined that the TPP deal “appears to fall woefully short.”
Open trade is good for the country and a high-quality TPP would be a welcome signal of the US commitment to the Asia-Pacific agreement. A deal that fails to win support in Congress would be highly problematic.
Phil Levy is senior fellow on the global economy at The Chicago Council on Global Affairs. Previously he was associate professor of business administration at the University of Virginia’s Darden School of Business. He was formerly a resident scholar at the American Enterprise Institute and taught at Columbia University’s School of International and Public Affairs. From 2003 to 2006, he served first as senior economist for trade for President Bush’s Council of Economic Advisers and then as a member of Secretary of State Rice’s Policy Planning Staff, covering international economic matters. Before working in government, he was a faculty member of Yale University’s Department of Economics for nine years and spent one of those as academic director of Yale’s Center for the Study of Globalization.
His academic writings have appeared in such outlets as The American Economic Review, Economic Journal, and theJournal of International Economics. He is a regular contributor to Foreign Policy magazine’s online Shadow Government section and writes on topics including trade policy, economic relations with China, and the European economic crisis. Dr. Levy has testified before the House Committee on Foreign Affairs, the Joint Economic Committee, the House Committee on Ways and Mean, and the US-China Economic and Security Review Commission. He received his PhD in Economics from Stanford University in 1994 and his AB in Economics from the University of Michigan in Ann Arbor in 1988.
Overshadowed by global trade conflicts, the pending EU-Mercosur trade pact underlines the shifting global trade landscape
Despite hopes for a comprehensive trade pact post-Brexit, a deal between the United Kingdom and the United States is far from a certainty.
Multilateralism may face skepticism in the United States, but it remains a core value for a vital American ally
A meeting in Canada could generate creative solutions for the future of the WTO, if only for the size of the economies participating
Will the new NAFTA deal pass through Congress? The answer may depend on how it treats labor rights.
The anti-trade rhetoric of the 2016 presidential campaign resonated deeply in the Midwest, especially for individuals most directly affected by deindustrialization and the resulting job losses: those without postsecondary training and skills.
Inking the Asia Pacific trade deal is only step one, as obstacles remain to implementation.
Nearly four months into the NAFTA renegotiation, Mexico and Canada have potentially developed an effective response to the Trump administration's trade skepticism.
Nothing productive arises from criticizing Germany for its bilateral trade surplus, much less its auto exports.
It will be difficult to expedite the renegotiation of the 23-year old agreement in 2017, if not 2018
Targeting a realistic GDP growth rate requires more than a bidding war.
President Trump flipped his stance on labeling China a currency manipulator. But what qualifies as currency manipulation in the first place?
The bill for forgoing TPP is coming due. Perhaps its price will make the administration reconsider.
The clarion call of the disaffected, low-skilled worker became the soundtrack of the 2016 election. Indeed, President Trump claimed the presidency in no small part by promising to reverse the effects of globalization, railing incessantly against the US’s “horrible” trade deals. It does beg the question, though: Why didn’t anyone consider helping those alienated before? In fact, they did.
Mr. President! So glad you called. No, it’s not too early; I was up anyway. You wanted to know whether a strong dollar or a weak dollar is good for the economy. Excellent question.