Dave Johnson: On Fast Track: Obama’s Scorn Forces Hillary Clinton’s Hand

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Will Hillary Clinton oppose the Trans-Pacific Partnership (TPP) agreement and the fast track authority designed to ramrod it through the Congress? She’s been noncommittal to date, with many assuming she will eventually support the president who she served as secretary of state. But by calling out his opponents, President Obama has turned the escalating battle over fast track and TPP into an intra-party back-alley knife fight. As someone seeking to lead that party, Hillary can’t remain on the sidelines for long. And, if she adheres to the standards that she put forth for the agreement, she might well end up joining the opposition.

[Reposted from Campaign for America's Future  |  Dave Johnson  |  April 27, 2015]

The president has lined up with the Republican congressional leadership, the Chamber of Commerce and the business lobby to pass “fast track” trade authority to ease the passage of the 12-nation TPP. He faces growing opposition from the vast majority of Democratic legislators, the entire labor movement, a broad coalition of environmental, consumer and public interest groups, as well as a growing list of normally pro-trade economists, including the likes of Paul Krugman and Joseph Stiglitz.

Clinton has chosen to remain above the fray, issuing a statement saying she was “closely watching” to see if the treaty meets the standards of protecting workers and serving our national security. “Closely watching” isn’t exactly the expected behavior of a “champion of everyday people,” but it will have to do.

The White House assumes that Clinton stands with the president, with White House deputy press secretary Eric Shultz saying, “I haven’t seen anything to suggest any distance.” The White House even defended Clinton’s dodge, with Press Secretary Josh Earnest telling reporters, “TPP is something that’s still being negotiated. She, as we’re encouraging everybody to do, is going to withhold judgment.”

But Obama’s scornful attack on his opponents raises the stakes dramatically, and makes it much harder for Clinton to stay on the sidelines. Obama dismissed opponents for “not knowing what they are talking about.” He trotted out the old charge of protectionism, saying, “The idea that we can shut down globalization, reduce trade…is wrong-headed. That horse has left the barn.” Most dramatically, he censored Sen. Elizabeth Warren by name, saying that she was “just wrong” in her opposition. After she sent out an email to supporters saying the president’s claims couldn’t be verified because the treaty is secret, the president called such actions “dishonest,” since “every single one of the critics…could walk over and see the text of the agreement.” Warren then joined with Sen. Sherrod Brown to put the president to the test: If it is not secret, publish the text so that everyone can see it before the vote on fast track. This fight isn’t going away.

Clinton recently celebrated Warren in Time Magazine’s review of the 100 most influence people for assuming Ted Kennedy’s mantle as “champion of working families and scourge of special interests,” noting “she never hesitates to hold powerful people’s feet to the fire: bankers, lobbyists, senior government officials, and yes, presidential aspirants.”

Now, the president’s attack on his opponents – virtually the entire base of the Democratic Party – has raised the stakes for Clinton. As the battle heats up, staying on the fence will be ever more untenable.

Clinton’s Position?

Few would be surprised if Clinton came out in support of the treaty. As Obama’s former secretary of state, she would be reluctant to break with him openly in such a heated battle. As secretary of state, she praised TPP as the “gold standard in trade agreements to open free, transparent, fair trade.” As a presidential candidate committed to raising a billion or more for her campaign, she knows that Wall Street and corporate America are lobbying hard for the treaty.

But to support the agreement, Clinton will have to abandon the standards that she has argued the agreement must meet. Her spokesman, Nick Merrill, stated,

“We should be willing to walk away from any outcome that falls short of these tests,” Merrill said in a statement. “The goal is greater prosperity and security for American families, not trade for trade’s sake.”

What were the tests? “First, it should put us in a position to protect American workers, raise wages and create more good jobs at home. Second, it must also strengthen our national security.“

Of the current debate over the TPP, Merrill said of Clinton: “She will be watching closely to see what is being done to crack down on currency manipulation, improve labor rights, protect the environment and health, promote transparency and open new opportunities for our small businesses to export overseas.” (Emphasis added.)

Now since the TPP remains classified, secret to the public, we still don’t know what the details are. But what we do know makes it clear the treaty will not meet Clinton’s standards.

We know that the treaty will not include any provisions to deal with currency manipulation. Treasury Secretary Jack Lew has stated flatly that the subject will not be raised in the negotiations. Currency manipulation by mercantilist nations like China has been central to the massive trade deficits that the U.S. has run up over the last decades. Last year, America’s trade deficit was about 3 percent of GDP, or over $500 billion. These deficits simply cannot be sustained.

That is why traditional free trade advocates like C. Fred Bergsten now insist that the TPP must include protections against currency manipulation. The Commission for Inclusive Prosperity, chaired by Larry Summers and festooned with Clinton advisors, also argued that currency manipulation should be part of trade negotiations.

Secondly, we know – since the provisions of the chapter have been leaked – that the TPP will include the Investor-State Dispute Settlement provisions. Elizabeth Warren has forcefully exposed the implications of creating a private arbitration system for multinationals. Obama has dismissed this concern as exaggerated, but Clinton clearly doesn’t agree. In “Hard Choices,” Clinton’s memoir of her State Department days, she argued that in negotiating the TPP, “we should avoid some of the provisions sought by business interests, including our own, like giving them or their investors the power to sue foreign governments to weaken their environmental and public health rules, as Philip Morris is already trying to do in Australia.” (Emphasis added.)

Clinton has suggested any agreement must strengthen our national security. The president has argued that TPP is needed as part of his pivot to Asia, so “China doesn’t write the rules.” But in this time of extreme inequality and a sinking middle class, a national security imperative is for the U.S. to move to more balanced trade, ending the deficits that make a full-employment economy virtually impossible. Those same deficits have enabled China to amass trillions in reserves. They will write their own rules because they have the money. When the Chinese set up their Asian development bank, America’s allies rushed to join, despite the opposition of the Obama administration.

If we want to rebuild America’s middle class at home and strengthen our influence abroad, we have to change our global strategy and move to balanced trade. And that requires challenging currency manipulation and reforming our distorted global tax policies. TPP is more likely to undermine rather than serve our core security interests.

Clinton announced her campaign saying she wanted to be a “champion of everyday people.” When the battle is joined and the fighting is fierce, champions do not stand on the sidelines. They aren’t “closing watching” to see who wins. They are leading, lifting spirits, pointing the way. The president has raised the furies around fast track. It is time for Clinton to take a stand.

Click here to send an email to your Representative and Senators to tell them: NO FAST TRACK.

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  • commented 2015-05-07 09:28:21 -0400
    “…pro-trade economists, including the likes of Paul Krugman and Joseph Stiglitz…”
    Krugman, Stiglitz, the labor movement, environmentalists and everyone else is, and has always been, pro-trade. We are all for good trade policy we are against bad trade policy.

    The test for Hillary Clinton is whether she can tell which is which.