The U.S. labor movement may have the Republican-led Congress to thank for its biggest victory this year. But it would be a short-term triumph, and one not necessarily in the best interests of American workers.
That would be the defeat of the Trans-Pacific Partnership, the free-trade deal that the Obama administration negotiated with 11 other nations on both sides of the Pacific Ocean. Organized labor and their Democratic allies in Congress vehemently oppose the agreement, arguing that it would cause more jobs to flee the U.S. in favor of lower-wage (and less union-friendly) trading partners.
The top Republican in the Senate, Majority Leader Mitch McConnell of Kentucky, appeared to hammer the final nail into the TPP coffin last month when he told a breakfast gathering of the Kentucky Farm Bureau that the trade pact “will not be acted on this year.” McConnell said the TPP can still be “massaged” by the next administration if it can drum up bipartisan support in Congress, eliding the fact that any changes would have to be negotiated with 11 other nations — and that both Democrat Hillary Clinton and Republican Donald Trump have called the pact a bad deal and have pledged to kill it if elected president.
With time running out in President Obama’s term, it looks like five years of delicate negotiations may be rendered moot by the toxic politics of the 2016 elections. That’s a shame, because whatever flaws the TPP has, it is still in the country’s best interests in the near term, and in U.S. workers’ best interests in the long term.
Opponents of the deal have focused on the failings of the 22-year old North American Free Trade Agreement and other trade deals, whose effects on the U.S. economy have been decidedly mixed. U.S. manufacturing jobs in particular have contracted since China was admitted to the World Trade Organization in 2001, cutting tariffs and helping to speed China’s rise as an exporting superpower.
But that transformation was happening anyway, powered by technologies that are shrinking the effective distance between countries and globalizing manufacturing supply chains. The question for policymakers isn’t how to reverse the irreversible. It’s how to steer globalization toward a set of rules that open markets, raise global standards of living and allow companies in the United States, with its comparatively high wages and regulatory costs, to thrive.
That’s the point of the TPP. In exchange for opening the markets wider in highly developed countries such as the United States and Japan, the agreement requires less developed nations such as Vietnam and Malaysia to set higher standards for wages and hours, worker safety and environmental protection, while also mandating more freedom to do business online and more respect for patents, trademarks and copyrights.
Some critics contend that the deal does not set the standards high enough, or that it will be too hard to enforce. Those are valid concerns; the United States hasn’t been aggressive enough about enforcement in the past. Nor has it done a good job helping U.S. workers and communities adapt to the changes wrought by globalization. Meanwhile, other critics say the standards are too high, particularly when it comes to patents on prescription drugs, potentially threatening the supply of affordable medicines in poor countries. But protecting U.S. drug patents overseas wouldn’t necessarily cut off that supply; instead, it would give patent holders more say in who the supplier will be.
Another point of the pact is to give Pacific Rim nations more access to markets in Japan and the West so they won’t be so dependent on China, which has been actively negotiating bilateral free-trade deals of its own. Unlike the U.S., China isn’t pushing its trading partners to adopt minimum-wage laws or cut back on pollution. Letting China define the trading rules for globalized commerce would in no way be good for U.S. workers.
Abandoning the TPP now would be a huge blow to U.S. influence in Asia. That point was made clear by Singapore Prime Minister Lee Hsien Loong, who said in a recent visit to Washington, "For America's friends and partners, ratifying TPP is a litmus test of your credibility and seriousness of purpose."
The long-term effect of free-trade deals such as the TPP is to spread prosperity and growth, which means more initially to the less developed world than to the United States. Yet, by improving wages and working conditions around the world, they eventually reduce the pressure on U.S. companies to slash their workforce or offshore their manufacturing. Although that’s a slow process, it is happening. The TPP would move that process forward, setting higher and more enforceable standards than previous free-trade deals. Rather than punting on TPP, Congress should give Obama’s signature trade deal a chance to pass before he leaves office.
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