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Senator Jeff Sessions issues Critical Alert against Fast Track
Howard Richman, 5/4/2015
Senator Jeff Sessions was one of the Republicans heroes who voted in the Senate Finance Committee to include a prohibition against currency manipulation in the Trans Pacific Partnership treaty that President Obama is now negotiating with 11 Pacific Rim countries. Unfortunately, the amendment that he supported did not pass in committee.
As a result, President Obama was directed by the Senate Finance Committee to negotiate a treaty with 11 countries that would be "free trade" in name only. Our trading partners would be given implicit permission to manipulate exchange rates in order to give their products hidden subsidies and American products hidden tariffs.
But that was just a committee vote. The Senate as a whole has not voted to give Obama "Fast Track" power, called Trade Promotion Authority (TPA), to negotiate trade treaties without the possibility of Congressional amendment. On Sunday night, Sessions issued a "Critical Alert," listing his Top Five Concerns with Trade Promotion Authority:
1. Consolidation Of Power In The Executive Branch. TPA eliminates Congress’ ability to amend or debate trade implementing legislation and guarantees an up-or-down vote on a far-reaching international agreement before that agreement has received any public review. Not only will Congress have given up the 67-vote threshold for a treaty and the 60-vote threshold for important legislation, but will have even given up the opportunity for amendment and the committee review process that both ensure member participation. Crucially, this applies not only to the Trans-Pacific Partnership (TPP) but all international trade agreements during the life of the TPA. There is no real check on the expiration of fast-track authority: if Congress does not affirmatively refuse to reauthorize TPA at the end of the defined authorization (2018), the authority is automatically renewed for an additional three years so long as the President requests the extension. And if a trade deal (not just TPP but any trade deal) is submitted to Congress that members believe does not fulfill, or that directly violates, the TPA recommendations—or any laws of the United States—it is exceptionally difficult for lawmakers to seek legislative redress or remove it from the fast track, as the exit ramp is under the exclusive control of the revenue and Rules committees....
2. Increased Trade Deficits. Barclays estimates that during the first quarter of this year, the overall U.S. trade deficit will reduce economic growth by .2 percent. History suggests that trade deals set into motion under the 6-year life of TPA could exacerbate our trade imbalance, acting as an impediment to both GDP and wage growth. Labor economist Clyde Prestowitz attributes 60 percent of the U.S.’ 5.7 million manufacturing jobs lost over the last decade to import-driven trade imbalances. And in a recent column for Reuters, a former chief executive officer at AT&T notes that “since the [NAFTA and South Korea free trade] pacts were implemented, U.S. trade deficits, which drag down economic growth, have soared more than 430 percent with our free-trade partners. In the same period, they’ve declined 11 percent with countries that are not free-trade partners… Obama’s 2011 trade deal with South Korea, which serves as the template for the new Trans-Pacific Partnership, has resulted in a 50 percent jump in the U.S. trade deficit with South Korea in its first two years. This equates to 50,000 U.S. jobs lost”....
3. Ceding Sovereign Authority To International Powers. A USTR outline of the TransPacific Partnership (which TPA would expedite) notes in the “Key Features” summary that the TPP is a “living agreement.” This means the President could update the agreement “as appropriate to address trade issues that emerge in the future as well as new issues that arise with the expansion of the agreement to include new countries.” The “living agreement” provision means that participating nations could both add countries to the TPP without Congress’ approval (like China), and could also change any of the terms of the agreement, including in controversial areas such as the entry of foreign workers and foreign employees. Again: these changes would not be subject to congressional approval....
4. Currency Manipulation. The biggest open secret in the international market is that other countries are devaluing their currencies to artificially lower the price of their exports while artificially raising the price of our exports to them. The result has been a massive bleeding of domestic manufacturing wealth. In fact, currency manipulation can easily dwarf tariffs in its economic impact. A 2014 biannual report from the Treasury Department concluded that the yuan, or renminbi, remained significantly undervalued, yet the Treasury Department failed to designate China as a “currency manipulator.” History suggests this Administration, like those before it, will not stand up to improper currency practices. Currency protections are currently absent from TPA, indicating again that those involved in pushing these trade deals do not wish to see these currency abuses corrected. Therefore, even if currency protections are somehow added into TPA, it is still entirely possible that the Administration could ignore those guidelines and send Congress unamendable trade deals that expose U.S. workers to a surge of underpriced foreign imports. President Obama’s longstanding resistance to meaningful currency legislation is proof he intends to take no action. The President has repeatedly failed to stand up to currency manipulators. Why should we believe this time will be any different?
5. Immigration Increases. There are numerous ways TPA could facilitate immigration increases above current law—and precious few ways anyone in Congress could stop its happening.....
Sessions concluded that perhaps Congress should preserve its power, instead of giving it to President Obama:
Our job is to raise our own standard of living here in America, not to lower our standard of living to achieve greater parity with the rest of the world. If we want an international trade deal that advances the interests of our own people, then perhaps we don’t need a “fast-track” but a regular track: where the President sends us any proposal he deems worthy and we review it on its own merits.
Sessions is entirely correct here. President Obama would use Fast Track power to negotiate a treaty that would increase America's trade deficits, thereby reducing America's long-term growth and living standards.