One bright spot exists for President Obama in the Republican take-over of the U.S. Congress as a result of the 2014 mid-term elections. That is a shared agenda on trade. Republicans tend to be supportive of trade negotiations and tout their potential for economic growth and job creation. The Democrats, on the other hand, typically reflect the concerns of their constituents — trade unions and environmentalists concerned about potential negative impact of such agreements on jobs, labor standards and the environment.
The U.S. Constitution gives shared responsibility to the President and the Congress for the US trade agenda. While it is the President, through his US Trade Representative, who conducts trade negotiations, concluded agreements must be approved by a two-thirds majority of the Senate in order to become law.
The United States is currently negotiating two large trade agreements. The Trans Pacific Partnership (TPP) is being negotiated among twelve countries – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. The TransAtlantic Trade & Investment Partnership (TTIP) negotiations between the United States and the European Union will create the world’s largest trade bloc.
To facilitate such negotiations, U.S. Presidents over the past thirty (30) years have relied on the Trade Promotion Authority (TPA) legislation passed by the US Congress. TPA defines US trade negotiating objectives to which the President must adhere in concluding trade agreements. In return, the US Congress accepts, or rejects, the negotiated agreement in its entirety. This process provides some assurance to US trade partners that the agreements they sign with the United States will not be subjected to further requirements in order to win Congressional approval.
The last grant of Trade Promotion Authority to the President expired in 2007. President Obama first sought renewal of TPA in 2012. Under the Democratic-led Senate, the response to this request has been a resounding and consistent “no”.
Meanwhile, the Republican Party’s platform on trade includes the demand to “restore Presidential Trade Promotion Authority”. The document goes on to say that international trade is crucial for the US economy because it means more jobs, higher wages and better standard of living.
As a result of the November 4, 2014 elections the Republicans now hold a majority in the Senate, as well as the House. The incoming Senate Majority Leader, Senator Mitch McConnell (R-KY) has already signaled his desire to work with President Obama on trade:
“I’ve got a lot of members who believe that international trade agreements are a winner for America.”
This is why, on this front at least, President Obama may be able to find a silver lining in this changed political environment. The Republicans may keep trying to repeal Obamacare, but are more likely to approve his trade deals.