American Politics & Foreign Policy Trade & Foreign Economic Policy Hoa Nguyen I

Question Some scholars advocate giving the US president broad authority to conclude trade agreements with other countries, subject only to “fast-track” review by Congress. Others argue that to ensure workers’ rights and environmental safety, Congress needs to avoid limiting its review and possible amendment of trade agreements. What are the bases of each argument? Should the US president have fast-track trade negotiation authority to protect national interests of the US? Or should the Congress have more sweeping review of trade agreements to protect domestic interests? Discuss in the context of current tug-of-war going on between President Obama and the US Congress over the Trade Promotion Authority. 2

What is fast track Formally known as Trade Promotion Authority (TPA), or ‘fast-track’ Congress delegation to the executive branch to negotiate international commerce Allows US president and trade representative to finalise trade deals without full Congressional oversight President must notify 90 days of entry to force Congress must vote to ratify within 60 days, no amendment, only up-or down vote A streamlining of the process by Congress in exchange for giving president ‘long detailed list of negotiating objectives’ 3

Executive branches Authority to negotiate and finalise trade deals 90 days notice to Congress before agreement taking effect Congress Right to regulate international commerce Within 60 days: No amendments on terms, up-or down vote only Constitution 4 Trade deal ratified/revoked

Where fast-track came from 5 1 World negotiation shifted from tariff to non-tariff issues Nixon 1973: proposed NTB negotiation rights 2 Congress cannot forfeit power to make law US negotiators needed some insurance of negotiated deals to partners 3 Compromise: the fast-track

Reasoning for fast-track 6 Fast-track facilitates trade promotion Stream lining the process Provide some weight to US negotiators Trade promotion is for overall benefits David Ricardo: comparative advantage theory US lead in a trade order that benefits the US

Unfavorable public view on fast-track and trade promotion 7 1 Trade agreements: trade deficits, millions job loss (low- skilled and high-skilled sectors), unchanged/depressed real wages 2 Who are the beneficiaries of trade agreements? Corporations? – a race to the bottom 3 Fast-track blocks Congress’ attempts to improve trade terms for the people

Trade negotiations secrecy 8 Trade negotiations are carried out in secrets TPP TTIP TISA Leaked TPP documents show problems no enforcement mechanism for environmental terms companies can sue states What else? Fast track facilitates such secret deals that.. favour big corporations and often harm other groups’ interests! (workers, environment..)

Checks & balances 9 Fast-track: exclusive rights of USTR and president to choose partners & terms When president reveal full text, it is a done deal Congress can not change terms Revocation possible, but costly. US credibility in negotiations -> eliminate checks & balances?

Fast track & The TPP Fast- track authorisation in current debate: controversial TPP Trans-Pacific Partnership 12 countries: US, JP, Mexico, Canada, AU, Malaysia, Chile, Singapore, Peru, Vietnam, NZ, Brunei Excludes China Covers IPR, financial regulations 10

TPP – Economic Benefits Member countries = 40% world GDP, 25% exports Expected to boost growth by $300 bn in next decade Big corporations : tariff reductions for products made overseas Consumers benefit too from cheaper products Job loss minimal as US factories are already in partner countries 11

TPP – Political Move Counter China influence in the region China: Asia-only economic bloc, RCEP (ASEAN +6), One Belt One Road Policy, AIIB Strategically important for US influence & inclusion in global trade game 12

Fast-track approval Clinton administration did not need fast-track to get trade deals signed But TPP is on another level with highly complex and controversial issues Without fast-track, it is possible that TPP may never be finalised US cannot afford to miss the TPP? 13

Fast-track approval Ability to conclude TPP, TTIP, TISA Personal motive: Legacy for Obama? Senate approved - possibly helped by donations from corporations! in favour (14 May) Over $1m donated by corporations Jan- Mar 2015 Average $17, donated to each of 65 “yea” votes. Average Republican member received $19, Average Democrat received $9, And more contributions to member facing re-elections 14

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Fast-track approval House vote? June – more difficult as many Democrats and TEA Republicans oppose House members represent their constituents Final result? 16

Fast-track Double bladed sword: facilitates trade but favours corporations at expenses of others US government may need to review the whole approach and process to trade 17

Thank you 18