The Obama administration continues to push a fast track to nowhere. U.S. Trade Representative Michael B. Froman now has launched charm offensive, meeting with legislators, consumer, union and environmental groups to try to defuse growing opposition to fast track trade authority.
Fat chance. Senate Majority leader Harry Reid says he has no intention of bringing fast track up on the Senate floor (at least before the election). House Speaker John Boehner couldn't even round up a Democratic co-sponsor for the bill. Democratic leader Nancy Pelosi has voiced her opposition.
Froman's strategy now is to try to move the negotiations over the twelve nation Trans-Pacific Partnership (TPP) towards completion, using the treaty to convince legislators to pass fast track. Administration officials are reportedly hoping that they can mobilize enough Wall Street and corporate America muscle to cobble together sufficient votes in a lame duck session after the elections to move forward.
Froman is a competent advocate, unflappable in the face of criticism, willing to mix it up with his opponents. But the debate quickly disintegrates into hoary old, dishonest tropes. Froman claims the treaty will expand exports and jobs, while saying little about imports or the jobs lost to them. He says America can't be protectionist, as if that were an option. He claims this treaty is unlike all others because it will include enforceable provisions on labor rights and environmental protections. (Can anyone imagine enforcing labor rights in Mississippi, much less Da Nang?) He dismisses concerns that corporations are extending their grant to sue nations for damages to projected profits for consumer and environmental regulations. He argues that if we don't act rapidly, the Pacific nations will be seduced to join China's economic order, despite centuries- old enmities and fears.
All this seems like dancing on the rubble. The inescapable reality is that the U.S. has pursued a globalization strategy that is a calamitous failure. This isn't the time to pursue more, better, bigger trade accords. This is a time for a fundamental reassessment. This isn't a radical conclusion. Consider three perspectives:
The leading global economic powers -- the G-20 -- gathered in Pittsburgh after the global financial collapse in 2009 and concluded, as Republican Federal Reserve Chair Ben Bernanke argued, that the enormous global trade imbalances contributed directly to the global financial crisis. All agreed -- including China and Germany -- that both surplus nations and deficit nations had to move to more balanced trade and financial flows in the future.
President Obama has sensibly called America's extreme inequality -- and the decline of its once proud middle class -- the "defining challenge of our time." He says this inequality has built up over three decades and attributes it to two major causes -- technology and globalization. Inescapably, at the center of America's globalization strategy are its corporate defined trade and strong dollar policies.
If this is too fancy, just apply the common sense of a traditional Yankee trader. From 2000, the U.S. has racked up an utterly unprecedented $7 trillion in trade deficits in goods and services. This has disemboweled manufacturing in the U.S., as U.S. corporations took advantage of trade and tax policies to ship good jobs abroad. Despite falling oil imports due to the natural gas-fracking revolution, the U.S. is still running a trade deficit of over $1 billion a day. And our trade deficit with China has reached new and previously unimaginable levels, including a growing trade deficit in advanced technology products.
Thus, it is imperative that the U.S. stop pushing down its fast tracks and instead undertake a comprehensive review of its globalization strategy, particularly its trade, tax and currency policies. Rather than trying desperately to sell another round of treaties with dubious promises, evanescent benefits, and exaggerated claims, the administration should be launching a root to branch evaluation necessary to define a very different direction for the country.
The president, stymied by obstructionist Republicans in almost all of his policies, has said that America can't wait, and that he has "a pen, a phone" and a pulpit to force independent action. Nothing is more imperative than to use that pen and phone to convene a national commission on America's global economic strategy. Convene the best representatives of global corporations, banks, unions, consumers and environmentalists who understand that we can't continue down the same road and drive a review. Legislators might sensibly set up a joint special committee of Congress to parallel the president's initiative.
This would wrench us out of the old dishonest debate about "free trade and protectionism" and generate a rich new discussion about America's strategy.
How do we move to more but balanced trade? How do we limit the ability of global corporations to avoid taxes by shipping jobs and reporting profits abroad? How do we take on currency manipulators like China or mercantilist traders like Germany? Should we sustain the muscle bound dollar that bankers and multinationals like or a fit dollar that exporters prefer? What is our global trade trajectory in a time of catastrophic climate change?
Instead, the administration is pursuing trade negotiations in an outmoded and failed mold, behind closed doors with corporations at the table. We know that this model has failed us miserably over the last decades. President Obama was elected in the wake of the global collapse with the promise to develop a new foundation for growth. Isn't it time to stop pursuing a fast track when the train is already off the rails? Isn't it long past time to take another look and think anew?