Beyond the Beltway

Beyond the Beltway

Obama, Shakespeare and the aborted legacy of the Trans-Pacific trade agreement

The fight over fast-track trade authority increasingly resembles a Shakespearean tragedy. Tempest via www.shutterstock.com

Events in Washington this week on the proposed historic 12-member Trans-Pacific trade agreement have had all the key elements of a Shakespearean tragedy. A resolute, noble and well-intentioned ruler (played ably by President Obama) seeking to dispense largesse in the form of a trade deal for his subjects. And subjects who are deeply suspicious to the point of revolt against their aging leader.

The president’s personal benefit in this tale, as is often the case with rulers in their twilight, would be an enduring legacy. It would be an agreement that would be a key building block in sustaining America as an economic power in Asia.

Obama’s strength has been his ability to consistently rely on his closest allies – in this case the House Democrats. His weakness – and this is what makes it a tragedy – is his inability to foresee their inevitable “betrayal.”

At least in public, the president minimized their degree of hostility and that of the domestic constituents that they represent. He thought that, once again, offering common sense and good communication, he could overcome traditional partisanship and the seeds of doubt. It has worked for him with Democrats in the past. So why not again?

Americans have been told that protectionism (such as the Smoot-Halwey Tariff Act, its namesakes pictured) causes depressions. Is protectionism back in vogue? Library of Congress

The king’s largesse

Americans have consistently been told that protectionism led to the Great Depression. The Smoot-Hawley Tariff of 1930 was to blame.

So they have been told – and generally believed – that free trade is a virtue. Any departure from this mantra in US policy is only tolerated when trading partners start “cheating” by doing things like introducing domestic tariffs or subsidizing their firms.

Americans built two global trade organizations on the principle that free trade is a good thing – first the General Agreement on Tariffs and Trade (GATT) and then the World Trade Organization (WTO). Free trade, we are told, sustains national prosperity, enlarges the middle class and even promotes democracy. So the core conviction of most Americans was on the president’s side in promoting, effectively, a huge, new free trade zone.

Unruly subjects revolt

But American Democrats have become increasingly suspicious of this core belief over the last two decades – especially House Democrats, whose core constituents have suffered the most and, in large numbers, fled the party. In their view, other countries consistently cheat and care little about human rights or the environment. American firms do the same, offshoring work, paying their lower taxes abroad while still accepting all manner of subsidies from the US government.

As a result, the number of manufacturing jobs has shrunk, and unions, a traditional cornerstone of American support, have withered. As I described in a recent column, for them NAFTA has become emblematic of all these ills.

But the president is always a person who believes in reason. He thought he could correct the past sins of agreements like NAFTA and convince his colleagues of the veracity of his approach. They simply needed to understand that this trade agreement was an opportunity, not a threat. It is not free trade agreements that are the problem. It is how they have been set up and implemented that is the problem.

A leader’s legacy

The president’s signature domestic legislative legacy, the Affordable Care Act, is now under attack from the courts. This, if anything, may have deepened his commitment to getting this new trade agreement in case the Affordable Care Act yet stumbles. And no president wants to leave office with the stigma of his most notable foreign policy “achievement” being that he embroiled the US in yet another Iraq war.

This combination – of faith in the goodwill of the House Democrats, of faith that he could repair the ills of NAFTA and of faith that he could still leave behind a great foreign policy legacy – led him to put everything on the line.

As The New York Times reported in the aftermath of the House vote, the president was willing to personally plead with the Democrats to support him.

And the Democrats were willing to perform the equivalent of eating their own by voting, in the Times’ words, “to kill assistance to workers displaced by global trade, a program their party created and has stood by for four decades.”

By doing so, they brought down legislation granting the president trade promotion authority — the power to negotiate trade deals that cannot be amended or filibustered by Congress — before it could even come to a final vote.

A final twist of the knife

In the ultimate Shakespearean element of irony, many Republicans, those sworn enemies of the president, tried to resurrect the trade adjustment assistance program that the Democrats had just voted down – a program that they have vehemently opposed in the past.

They even passed a measure that they hate in order to support the free trade agreement. But that is all in vain because it differs from the bill passed in the Senate – and the two bills cannot now be reconciled. Both their efforts, and their ultimate failure, must have been the ultimate twist of the knife for the president.

Where Obama goes from here is unclear. He’ll no doubt try to resurrect this agreement. But as he enters the twilight of his presidency, it’ll be hard to envisage any trade agreement being concluded – spanning the Pacific or the Atlantic. A familiar phrase, “lame duck,” will soon be in common usage in op-ed pieces across America.

But when they write about his legacy, let’s hope the historians focus on the fact that Obama defied the naysayers. Let’s hope they stress that he pulled America back from the brink of total economic collapse and got most of America back to work – not that his own colleagues condemned him in the twilight of his presidency despite his best intentions. Still, there is a reason that they call them tragedies.