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Tuesday, May 29, 2007

Thomas Palley: R.I.P. Trade Promotion Authority

Thomas Palley, one of the people interviewed in Chris Hayes' recent Nation article "Hip Heterodoxy," and "a dissident economist who received his PhD from Yale and once worked for the AFL-CIO, " sends along his latest on fast-track authority for trade agreements. [On the subject of heterodoxy, there is currently a nice discussion at TPM about heterodoxy in economics and I hope to contribute something to the discussion tonight or tomorrow, time permitting.]

Here's Thomas Palley expressing dissidence over trade promotion authority:

R.I.P. Trade Promotion Authority, by Thomas I. Palley: Trade promotion authority (TPA) - formerly known as fast-track negotiating authority - is set to expire on June 30, 2007. As a result, the Bush Administration and business interests are now lobbying Congress for its renewal. However, there are strong reasons to not just let TPA temporarily lapse, but also to permanently bury it.

After the November 2006 elections giving Democrats control of Congress, renewal of TPA appeared unlikely owing to the high degree of distrust and animosity toward the Bush Administration. Now, with Democrats and the Administration agreeing to include formal language on labor and environmental standards in the Peru and Panama free trade agreements, some are arguing for extending this newfound cooperation to renewal of TPA. That would be a serious mistake.

Not only would TPA renewal betray voters who no longer support the Administration, it would also miss a major opportunity to begin correcting course on globalization. Behind today’s flawed globalization lies a profoundly flawed policy process, and TPA is at the heart of that process.

The constitution gives Congress the right to decide upon trade relations with other countries. TPA has Congress ceding part of those rights by giving the President power to negotiate trade agreements that Congress can approve or disapprove but cannot amend or filibuster.

Opponents of TPA renewal have focused on two arguments. One argument is that such ceding of constitutional power is inappropriate, and Congress should reclaim this power as part of restoring a more balanced relationship between the legislative and executive branches.

A second argument is that absence of TPA would make it more difficult to sign new “free trade” agreements. This is because absent an up or down vote, agreements would get bogged down in Congressional special interest horse-trading. This is probably true, but it also constitutes a purely tactical argument for opposing TPA rather than an argument of principle.

An alternative argument for burying TPA concerns its distorting effect on trade policy. Over the last two decades the power of corporations has increased dramatically while that of labor has fallen. That power shift is reflected in the increased numbers of Washington K Street lobbyists working on behalf of corporations, which has increased corporate influence over policy and legislation. TPA plays into and amplifies this power shift.

Trade deals are negotiated by the office of the US Trade Representative (USTR), and then sent to Congress for approval. This negotiating process is stacked in favor of business. First, corporations get front seats at the negotiating table through regular detailed consultations, ensuring their interests are fully represented. Second, the trade bureaucrats who do the negotiating are subject to corrupting influences that bias negotiations.

One problem is that negotiators’ metric of success too easily becomes the number of deals signed, rather than getting good deals done. A second problem is that, as with other branches of government such as the Pentagon, there is a revolving door between USTR and business. Thus, trade negotiators who do good work for business are rewarded with plum K Street lobbying jobs, and Washington’s trade scene is crammed with persons who have followed this route. Furthermore, these lobbyists then have insider access to their former colleagues, thereby amplifying corporations’ representation advantage. The net result is business interests almost always trump those of workers.

TPA reinforces this jaundiced structure by reducing Congressional over-sight of trade, thereby short-changing the electorate’s interest. Bad agreements pass because the political costs of voting them down on account of specific problems are perceived as too high. Moreover, TPA provides individual congressmen with political cover, enabling them to retain favor with corporate sponsors without having to explain to constituents their lack of action.

The bottom line is that the balance of power and process of trade negotiation already favors corporate interests over those of ordinary people. TPA aggravates this pattern, which speaks for burying it and letting TPA rest in peace.

    Posted by on Tuesday, May 29, 2007 at 02:07 PM in Economics, International Trade, Politics | Permalink  TrackBack (1)  Comments (7)

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    Thomas Palley argues that we ought to let TPA lapse: Over the last two decades the power of corporations has increased dramatically while that of labor has fallen. That power shift is reflected in the increased numbers of Washington K Street lobbyists ... [Read More]

    Tracked on Tuesday, May 29, 2007 at 03:52 PM


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