Last week’s vote by the U.S. House of Representatives in substance against the Trade Act of 2015 was, potentially tragically, a vote against American jobs, the environment and the American economy. Organized labor is distressed, as it should be, with income inequality and with the apparent decline of the promise of America that each generation of Americans would be better off than the preceding one. Environmentalists fear that foreign tribunals would gut domestic laws. Some others perhaps just want America to disengage from the rest of the world. Together, they lashed out against trade agreements, being unable credibly to attack technological progress or the myriad failures of public policy including a rotting infrastructure, a mountain of student debt and grossly inadequate worker training, that threaten American competitiveness in an interconnected world.
Here are 4 myths against the trade legislation, and why we shouldn’t believe them
Myth #1 Although the bill would require extensive consultations with Congress, that body would have to vote up or down a trade agreement presented by the president and could not kill it by delay – depriving Congress of its constitutional role.
Under the Constitution, only the President has the foreign affairs power. Congress can either implement an agreement or not. Congress was never able to dictate what would be in an agreement. It would undermine the structure of international commercial arrangements for it to be otherwise. To do so would see a repeat of last week’s maneuver, which was to attack an element of a package in order to prevent that package from being approved, demanding changes in an agreement that could not be negotiated while claiming to be for the agreement itself. That is how the League of Nations went down to defeat. It is up to each President to convince each Congress that what has been negotiated is worthy of approval.
Myth #2 The first likely agreement, the Trans-Pacific Partnership, has been negotiated in secret.
This is not the case. The representatives designated by Congress to be fully informed about the agreements have full information. Also, no negotiation can succeed where every initial negotiating position is locked in by it being announced publicly, so that every compromise to a sensible middle ground can be painted as a retreat, a give-away.
Myth #3 Future trade agreements can only result in net job losses.
The U.S. market is already very open, and we already provide legal safeguards for all – whether a product, service or investor is of foreign or domestic origin. Most of the world’s markets and consumers are outside the U.S., and those markets are generally not as open as ours is. U.S. companies and their workers need guaranteed market access abroad and the creation of an improved set of rules governing commerce. There is no other way to meet those objectives other than through international trade agreements.
Myth #4 The U.S. will lose control of its ability to regulate the environment.
This is a charge levied because parts of trade agreements give a right to investors to go to arbitration with a government that takes an investor’s property without paying fair compensation. Well, first, our government does not take property without having to pay compensation. We have a constitutional protection for that. Secondly, no arbitration panel can make a change in any domestic law. All it can do is hold a government accountable for living up to its agreement. The U.S. has no problem with that and never has. We do need those protections in other countries.
Is there something about the vote that is even more troubling than the false fears raised by opponents? Was the vote something more than payback for a president who was to give voice to a resurgence of national purpose but who was said to have lost that voice upon election, appearing to some to be out of touch, isolated in an age of growing individual isolation; someone given to compromise in a time in national politics that provides very few examples of that practice.
This appears to be a time of disunion, when there is a loss of common purpose. Prior generations of Americans were raised to believe in an America as a place where there could be unbounded opportunity, a place of rugged individualism but with a strong sense of national identity forged out of the Revolution and the Civil War, and annealed by the good war fought by the greatest generation. American public policies established an economic world order through the Bretton Woods agreements establishing the World Bank and the International Monetary Fund, rebuilt much of the world economy through the Marshall Plan (“the most unsordid act in history” according to Churchill) and development assistance, enacted the GI bill to educate a generation of returning veterans, put into place a nation-wide interstate highway system, created the highest international ranking of students, schools and research universities making possible the conquest of diseases such as polio.
America’s government from FDR forward was to be an instrument of progress, and the United States was to be a paramount leader in world affairs for global progress. Is last week’s vote against the only means for the United States to set better standards for international trade an aberration, or is it an inflexion point, with America turning inward, at least for some period? The latter poses many more dangers than moving forward with trade promotion authority.
Alan Wolff is chairman of the National Foreign Trade Council and practices law in Washington D.C.