Trade is a big topic in this election cycle, but I wonder if the trade negotiation process will change when the shouting’s over. Inside-the-Beltway people are used to their old ways. As the Office of the U.S. Trade Representative is within the Executive Office of the President, it will be up to the new President to change the negotiation culture. Culture change is hard work: will they have the focus and determination to do it?
First, a guide to the old ways: after World War II, the United States participated in rounds of negotiations with many other countries simultaneously, under a U.N. protocol. Protocol members would gather in Geneva; their negotiators would concentrate mostly on cutting tariffs. The last completed round was in the 1990s.
A new round of talks was begun in the last decade, but it stalled; now it’s on life support. Why? Partly because U.S. business support for another big round was lagging, but mostly because negotiations were becoming more difficult.
Negotiations in the 20th century were about cutting tariffs and by what percentage. As in, Country A says to Country B, I’ll cut my tariffs by 10 percent on Product X, if you cut yours by 20 percent.
Today’s negotiations are more complex. For example, as a USDA trainee in the 1990s, I saw how U.S. iris bulb growers limited their orders to Japan to 99 bulbs per shipment. At 100 bulbs, Japanese agricultural inspectors would put the shipment in a queue; often the bulbs had rotted away by the time they managed to look inside the box. That’s a trade barrier.
Having the People’s Republic of China as a WTO member (a goal of Bill Clinton’s final years as president) adds its own complexities. Negotiating worldwide trade deals with a huge nation whose government still controls (and sometimes owns) the production of goods is, frankly, impossible. China’s size and economic structure makes enforcement of trade rules nearly impossible.
Thus, instead of worldwide negotiations in Geneva, we now have President Obama’s Trans-Pacific Partnership (TPP).
But one thing is consistent – and has been since the early days of trade negotiations: the belief that free trade in general is good for America. (The main exceptions are sugar and dairy products, but that’s another story.)
In practical terms, U.S. negotiators are assigned certain sectors. They have discussions with their foreign counterparts – a process that can take years. To inform and update the relevant companies/trade associations, negotiators provide briefings to “Trade Advisory Committees” — a President Nixon initiative. Members have security clearances, and briefings take place behind closed doors.
If you’ve stuck with me this far, think about this: what about communities affected by the negotiations? Example: U.S. negotiators strike a deal on Product X – with the end result being the closure of Littletown’s manufacturing plant and the town’s demise. Who speaks for the Americans of Littletown?
The logical answer: Littletown’s House and Senate members. But the Product X deal is buried inside thousands of pages of negotiation records, and they’re not in plain English either.
Plus, in the case of TPP, those records were locked in a basement room in the Capitol and could not be removed – limiting the ability of Congress to closely inspect the various deals contained therein. However, Congress voted for TPP and it is now in force.
That’s why Senator Jeff Sessions (R-AL) was so angry about the TPP documents being locked up. He wasn’t buying the ‘national security’ excuse – his attitude was: ‘what are they hiding?’
It gets worse. According to a recent Tufts University analysis, the United States is the loser in the TPP deal. Specifically, TPP will cause the loss of 448,000 U.S. jobs and shrink our Gross National Product.
As I once worked for a U.S. Trade Representative (USTR), I have a few suggestions for the future President.
- Have your USTR pile up airline miles in America, getting first-hand experience of the impact of other countries’ trade barriers and the impact of past U.S. trade deals. Find a USTR who’s media-savvy and can talk about countries that aren’t living up to their obligations or use tricks (e.g., 99 vs. 100 iris bulbs) to get around them.
- Give our negotiators a shock to the system: Declare a time-out on any negotiations, including any TPP follow-up deals.
- Reassign TPP staff to other duties.
- Declare the Doha Round dead, shut down all work and close all offices related to it.
- Have the Census Bureau conduct a county-by-county impact statement regarding TPP. (Members of Congress who voted for TPP may be in for an unwelcome surprise.)
- Adopt a truly tough stance against countries that steal U.S. intellectual property and violate human rights. Our President already has tools to punish violators, but no President, of either party, ever does. No matter how egregious the violation, the State Department always vetoes any punishment and forces the White House to issue a tut-tutting meaningless report. Stop the State Department’s veto power over trade violations.
- Tell the Trade Advisory Committees how under your Administration, any action on trade will be for the good of the entire nation, and not just for a particular business or industry.
- Make it clear to all that the era of hiding trade agreements behind locked doors is over.
TPP’s job losses have the power to extend our country’s Great Recession for years. Americans don’t believe free trade happy-talk as we see shuttered factories and entire towns dependent on Social Security disability checks.
The new President will have the power to change this, first by disavowing the belief inside the government that free trade is always good. Our candidates talk a lot about trade, but are they willing to affect real change in the trade bureaucracy? Time will tell.