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Politics may end up costing U.S. a place in key global trade agreements

Politics at home may cost the United States a play in two key global trade agreements — the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. Together, the two encompass an estimated 64 percent of the world's GDP.
Politics at home may cost the United States a play in two key global trade agreements — the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. Together, the two encompass an estimated 64 percent of the world's GDP.
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World leaders are setting the stage for the future of global economic growth as they discuss two game-changing trade agreements. Sadly but not surprisingly, politics on both the far right and far left could cause the U.S. to be left out. And as one of the few states in the nation with a trade surplus, an estimated $5 billion annually, Utah’s economy will be directly impacted by the decision for the U.S. to either be part of the trade agreements or sit on the sidelines.

The Trans-Pacific Partnership (TPP) includes 12 countries throughout the Asia-Pacific region, which represent some of the most promising markets in the world. The Transatlantic Trade and Investment Partnership (T-TIP) is a high-standard trade agreement between the U.S. and the European Union that offers significant benefits through strengthening existing bonds and eliminating trade barriers. Together TPP and T-TIP encompass an estimated 64 percent of the world’s GDP. That is a lot of money and represents a lot of potential customers for Utah businesses.

The truth of the matter is that the countries involved in TPP and T-TIP will not wait for the United States forever. If need be, they will move forward with the trade agreements on their own. This begs the question, why wouldn’t a nation built on capitalism and free markets want to be part of eliminating tariffs, lowering trade barriers, harmonizing regulations and leveling the playing field globally?

Although these trade pacts are just now entering the public consciousness, they have been evolving for nearly a decade with teams from each country participating in detailed negotiations. The reason for the recent attention is two-fold: procedural and political.

The procedural issue is that the president needs trade promotion authority (TPA) from Congress to negotiate the final items of the agreements. Some argue this takes away congressional authority and input, when, in fact, the opposite is true. The bill currently before Congress, and sponsored by Sen. Orrin Hatch, allows our congressional representatives to set the parameters and establish the priorities by which the deal will be finalized. In essence, the bill tells the president what Congress wants to see in the deal before he brings it back for approval in an up-or-down vote.

Understanding congressional hesitation requires a close examination of the politics. Some on the far right oppose TPA, not on the policy substance of free trade, but because they are loath to give more power to someone they view as an already lawless president. This perspective was evidenced by Sen. Mike Lee voting against Hatch’s bill moving forward this past week.

The left is driven by opposition to free trade by the two Democrat power bases, labor unions and the environmental lobby. Thus, the issue pits the president against many in his own party. This divergence was evidenced starkly a few days ago when only one Senate Democrat voted with the president to move the bill forward.

The political waters for the free trade agreements have grown even muddier as presumptive Democratic presidential nominee Hillary Clinton has been conspicuously silent on the issue.

While it’s not unusual for political candidates to hedge their bets on contentious issues, Clinton’s silence is particularly noticeable and egregious because as secretary of state under President Obama, she traveled the globe advocating strongly for the very free trade agreements she now appears to distance herself from. Her changed position may not be based on the merits of free trade or the specific trade agreements as much as the change in job title from Secretary Clinton to Candidate Clinton.

While her shifting stance may be disappointing to her former colleagues still engaged in negotiations surrounding the agreements, it is not surprising given Clinton’s need to cozy up to the left wing of the political party she hopes to represent in the upcoming presidential election.

More than 20 years ago, Bill Clinton showed courage in bucking his political party by staunchly supporting NAFTA. This trade agreement not only boosted the economy, it has become a cornerstone of his administration’s legacy. For a president that many criticized as being too overtly political and willing to say anything to curry favor and maintain power, NAFTA was a laudable example of putting principle above politics.

Let’s hope the person seeking to become the next President Clinton is able to muster that same kind of courage in defending the free trade agreements she advocated so strongly for not long ago, rather than giving into that less desirable characteristic of political expediency.

Derek B. Miller is the president and CEO of World Trade Center Utah. Previously he was chief of staff to Gov. Gary Herbert and managing director of the Governor’s Office of Economic Development.