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Senate Democrats Block Plan to Fast Track Obama’s Secretive Asian Trade Agreement

The president says the Trans-Pacific Partnership will boost the US economy, but it has brought him into direct conflict with powerhouse members of his own party.
Photo by Kevin Lamarque/Reuters

The Senate declined to fast track a secretive trade agreement between the United States and Asian countries that has brought President Barack Obama into direct conflict with powerhouse members of his own party, including Senator Elizabeth Warren.

Obama asked Congress to grant the Trans-Pacific Partnership (TPP) "fast track status," which would prevent lawmakers from shaping the agreement but still allow them to vote on whether to implement it once negotiations are complete. Senate Democrats declined to vote on the topic on Tuesday.

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Though the exact language and details of the agreement are being kept secret by the Obama administration, summaries and descriptions indicate that it will affect tariffs, workers' wages, intellectual property, and environmental regulations in the US and 11 Asia-Pacific countries. The Peterson Institute for International Economics estimated the US could gain $78 billion per year under the agreement.

The partnership excludes China and sets up a robust trade agreement between North America and some of China's nearest neighbors. Obama has said that it is important for the US to pass the trade deal so that it can set an economic framework for the region before China does.

"If we don't write the rules, China will write the rules out in that region," Obama told the Wall Street Journal. "We will be shut out — American businesses and American agriculture. That will mean a loss of US jobs."

The president also argues that the TPP will boost exports of goods made in America, particularly machinery, autos, and oil, and toughen labor and environmental regulations in the member countries. Labor leaders, however, are skeptical of these claims, suggesting the agreement will help Wall Street more than the average American worker.

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"No one has been able to explain how an agreement that seems focused on helping US companies use their control over supply chains to move work to low-wage countries will help the United States or the people who live and work here," AFL-CIO president Richard Trumka said in a speech last month. "Frankly, after what happened with NAFTA, and China PNTR, and the Korea Trade Agreement, I don't understand how anyone can make these arguments with a straight face."

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Trumka and other labor leaders argue that passing the TPP will mean a loss of US jobs because goods can be manufactured more cheaply in Vietnam, Malaysia, and other countries where workers are often paid meager wages.

The AFL-CIO told VICE News that it made nearly 100,000 phone calls to members of Congress and purchased advertisements pressuring lawmakers to vote against the fast track status.

"The American labor movement has long said, loud and clear, that good trade agreements must improve wages and working conditions for workers around the globe, not just here in the United States," Trumka said.

The liberal wing of the Democratic party has come out swinging against the agreement, with Warren, Senator Harry Reid, and House Minority Leader Nancy Pelosi all voicing opposition. Robert Scott, the director of trade and manufacturing policy research at the Economic Policy Institute, told VICE News that the public portions of the TPP point to a deal that could erode US jobs and put downward pressure on US wages.

"Certainly, experience tells us that when we negotiate trade and investment deals — like the Korea deal, like NAFTA, like the agreement to bring China into the WTO — what we've experienced is not just growing exports but imports, and as a result the losses of millions of jobs," Scott said.

The TPP could affect the wages of 100 million American workers, costing each an average of about $1,800 per year, Scott said, citing EPI research.

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"Everybody with a similar skill set, essentially all workers in the domestic economy who don't have a college degree… could lose $1,800 a year," he said. "Those are the most salient statistics for most working Americans. That's why there's such broad public concern about the effects of these trade deals."

Scott said labor unions are among the groups that will be most negatively affected by a new trade agreement.

"What we have found is that these agreements tend to benefit large multinational corporations," Scott said. "Wall Street wins, workers lose, and Main Street firms often lose as well."

Labor leaders and liberals have also criticized the deal for the role multinational corporations and Wall Street firms have had in its development.

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Warren, a potential 2016 presidential candidate, wrote an opinion piece for the Boston Globe pointing out that, although the public has been blocked from seeing the TPP, 28 trade advisory committees helped craft it. Of the 566 committee members involved, 480 were senior corporate executives or representatives from industry lobbying groups, Warren said.

Scott said it's no surprise that Obama has opted to involve industry leaders so completely in the negotiations. "President Obama has surrounded himself with advisors who come from Wall Street and economists who have strong ties to Wall Street," he said, pointing Timothy Geithner and Jack Lew, the former and current Treasury Secretaries, respectively, as examples. "It's just an enormous revolving door. The president has chosen to surround himself with these people."

Though the left is attacking Obama for the secretive nature and potentially damaging effects of the TPP, Benjamin Cohen, a professor of international political economy at the University of California Santa Barbara, told VICE News that Obama is following precedents set by both Democratic and Republican presidents before him.

"Presidents tend to take a broader view of what's in the best interest of the economy as a whole, while liberals, obviously, and most Democrats have a constituency that would include many of the people who will be hurt by trade liberalization," Cohen said. "It always hurts some and gives gains to others."

Follow Colleen Curry on Twitter: @currycolleen