To deepen trade legacy, Biden must turn to foes
Published 17 January 2023
For the US to regain leadership in global trade policy, Biden needs to request for Trade Promotion Authority. But to achieve this, he will need the support of Republicans, whose fragile majority in Congress is key to pivoting from Trump-era isolationism back to multilateral trade engagement.
In 2014, Vice President Joe Biden authored a Financial Times op-ed praising President Obama’s proposed Trans-Pacific Partnership (TPP) and asking lawmakers to back the request for Trade Promotion Authority (TPA). As Biden stated, “We have an opportunity to shape the path of global commerce to spread our values and benefit our people, and we should seize it.”
A year later, Congress approved TPA, but backed by Republicans, not by Democrats. This bipartisan success between a Democratic president and congressional Republicans is a precedent Biden should try to repeat in his own administration.
A fast track to presidential legacy
In the US system, TPA grants the president authority to negotiate trade agreements under a fast-track mechanism. This mechanism sets out parameters for negotiations and guarantees an up or down vote, without amendments, on the final agreement. With TPA, the president and negotiating partners can have confidence that any agreement they reach will be taken seriously by Congress.
Since 1979, 14 free trade agreements (FTAs) and the multilateral trade liberalization arrangement under the General Agreement on Tariffs and Trade (predecessor to the WTO) came into force under some form of TPA. Without TPA, Congress only approved one FTA during that same period: the uncontroversial trade agreement with Jordan.
With the current Republican majority in the House of Representatives, the political dynamics between the White House and Congress will be similar to 2015, when President Obama requested TPA - but not the same. The dynamics will be similar, but not the same. At that time, in the House of Representatives, of the 218 ‘yea’ votes, only 28 were Democrats. The Republican majority at the time was 246 to 188. Today, it is only 222 to 213. In the Senate at the time, of the 60 supporters, only 13 were Democrats. Republicans are traditionally the party of free trade. Democrats are not, due to their powerful labor union base, which views trade agreements as a threat to union jobs by increasing oversees competition. Negotiating a House majority with such a slim Republican lead will present more challenges than in 2015.
At that time, Obama had his sights on the TPP, but although he succeeded in achieving TPA, any hopes for TPP ended with Donald Trump’s election in 2016.
Trump claimed the agreement was “so complex that nobody’s read it,” and accused it of being “pushed by special interests who want to rape our country.” His objection was more due to TPP’s association with Obama, and less to do with the actual agreement.
Unfortunately, Trump’s rhetoric pushed the Republican party in a more protectionist direction, but he still used the Obama-era TPA to modernize the North American Free Trade Agreement (NAFTA), with the passage of the United States-Mexico-Canada Agreement (USMCA) in 2018. Although only 28 House Democrats backed Obama’s request for TPA, USMCA passed with the backing of 193 Democrats and 192 Republicans. USMCA demonstrates that regional trade agreements are still possible, even in a partisan political climate.
For the US to regain leadership in global trade policy, Biden needs to request TPA again–this time for his own administration.
The next two years are likely Biden’s last as president. He is politically self-aware enough to realize this. His age is one factor, but within his own party, there is an increasing desire to find a new candidate for 2024. With this in mind, Biden may already be keeping one eye on his legacy.
Trade is key to Biden’s Asia legacy
In Asia, Biden’s only attempt to lead on trade has been the Indo-Pacific Economic Framework (IPEF). IPEF includes lofty goals such as clean energy, decarbonization, and inclusive economic growth under its four pillars- Trade; Supply Chains; Clean Economy; and Fair Economy, but it offers nothing in the way of tariff reductions or access to US markets.
Thirteen Indo-Pacific countries have joined the US in IPEF negotiations, the latest round just finishing in December in Australia. But without the congressionally approved legitimacy of an actual trade deal, IPEF’s only real draw is the diplomatic incentive of humoring the aging president of a superpower.
On its own, IPEF has little hope of outlasting Biden’s presidency, regardless of which party follows him in the White House. TPA could change that.
By requesting such authority, Biden would signal that the US is serious about engaging the Indo-Pacific beyond his own term in office. If partner countries see Biden make this move, IPEF negotiations would also gain more traction, since any agreed provisions could realistically be rolled into a regional trade deal later.
Biden’s 2014 Financial Times article may have only been a loyal VP backing his president’s lead, rather than his own ideological leanings, but his arguments remain valid today.
If Biden’s legacy for the Asia-Pacific is to endure, his leadership must go further than IPEF. TPA offers him that possibility, but to achieve TPA he will need Republican backing, and to get Republicans on board, he will need a mutual adversary. For the Asia-Pacific, he already has one ready-made: the Chinese Communist Party (CCP).
Standing up to China is one of the only issues on which Republicans and Democrats agree.
The goal of TPP was to establish American leadership in the Asia-Pacific with a rules-based order as a counterbalance to China’s growing influence. After Trump yanked the US out of the deal, the remaining partners established the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. CPTPP by most measures provides a strong framework to advance regional trade, but it lacks the heft that comes with American leadership and the massive US market. China now has its sights on joining CPTPP, further eroding America’s regional leadership.
Framing TPA with the explicit goal of countering China’s regional influence with American economic leadership could appeal to American voters and gain bipartisan support.
Republican support and the McCarthy wild card
Republican House Speaker Kevin McCarthy could be the key to reaching a bipartisan deal. Ideologically, McCarthy is in lockstep with the White House on trade. He not only supported the Obama-era TPA, but repeatedly pressed Obama to get his fellow Democrats on board. However, as demonstrated by the fraught election of McCarthy to Speaker by House Republicans, McCarthy's role as leader is precarious. Any legislative action that could be seen as giving Biden a win, could jeopardize his role as Speaker. This will likely restrict McCarthy to the “Hastert Rule”, the unofficial GOP agreement requiring majority support within the party before bringing bills to a vote.
In his new role as Speaker, if McCarthy is to risk making a bipartisan deal with Biden on TPA, he will need China as cover. And regarding China, McCarthy has not been subtle about his views. He calls the CCP 'the greatest geopolitical threat of our lifetime', and has pledged to visit Taiwan once Speaker.
Emphasizing American leadership in the Indo-Pacific as necessary to counter China and boost the US economy, is a message McCarthy and his Republican colleagues can endorse. If House Republicans can frame TPA as asserting their own leadership to force Biden’s hand, global trade deals could be back on the table.
In the Senate, Republican support for TPA is already vocal. In March, when US Trade Representative (USTR) Katherine Tai testified before the Senate Finance Committee, senior Republican senators including Chuck Grassley, Mike Crapo, and John Thune questioned her on why the administration is not pursuing new free trade agreements, especially in the Indo-Pacific.
Senator Thune, the Republican Whip, specifically directed her to Obama’s request for TPA and asked if the Biden administration will seek the same authority. In May, Republican senators wrote to Tai and Agriculture Secretary Tom Vilsack asking them to prioritize trade. They contrasted America’s failure to engage the Asia-Pacific with China’s leadership in creating the Regional Comprehensive Economic Partnership (RCEP) and application to join CPTPP.
In hearings, Tai consistently dodges any commitments on TPA, and has publicly criticized international trade deals. Still, in the March hearing, when referring to the congressional TPP and TPA negotiations during the Obama-era when she was Democrat chief counsel on the House Ways and Means Committee, she stated, “American trade policy is at its best, strongest and most durable when we are acting in the most bipartisan way.”
In October last year, speaking at a conference, she added, “We have not sworn off market opening, liberalization, and efficiency … But it cannot come at the cost of further weakening our supply chains, decimating our manufacturing communities.” If Biden were to move forward with TPA, Tai is the right interlocutor for negotiations between the White House and Republicans.
When Tai testifies again before Congress in 2023, continued emphasis on TPA by Republicans could indicate that the party is pivoting from Trump-era isolationism back to multilateral trade engagement, with the Asia-Pacific as a priority.
The resistance from within
On the Democratic side of the aisle, however, especially for lawmakers in the House, TPA will be a harder sell. That does not mean it is impossible. As USMCA demonstrated, the 28 Democrat TPA votes grew to 193 for USMCA when that trade deal became politically expedient.
Today, of the 28 House Democrats who supported the Obama-era TPA, 17 remain. On the Senate side, 11 of the 13 Democratic TPA supporters are still in office. Recently, in the March Finance Committee Hearing, Democrat Senators Menendez and Cantwell joined Republicans in grilling Tai on the need for tangible trade agreements. These voices remain, but they are a minority.
For most Democrats, the massive opposition to TPA from labor unions makes supporting it difficult, even if the request comes from their own president.
For example, New York Democrat Kathleen Rice, who backed Obama’s 2015 TPA, became the subject of attack ads funded by America’s largest federation of unions, the AFL-CIO, as a result. She did not seek reelection in 2022 and her seat flipped to a Republican.
In 2015, Hakeem Jeffries, who just replaced Nancy Pelosi as minority party leader, joined 156 other House Democrats in rejecting Obama’s request for TPA. His statement at the time towed a typical party line, saying trade agreements, “have resulted in good-paying American jobs being shifted overseas to the detriment of the American worker.”
Publicly, even if the request for TPA comes from his own president, any positive messaging by Jefferies is likely off the table. However, helping Biden behind closed doors by identifying a handful of Democrats from congressionally safe districts who support TPA, might still be possible. For example, the 17 pro-TPA House lawmakers remaining from 2015 won reelection in 2022 by an average of 63% .
For Biden, facing policy fights at home and the Ukraine war abroad, investing political capital in TPA likely remains a low priority. Even so, as Republicans continue pushing for American trade leadership in the Asia-Pacific, the justification for pursuing TPA is already in place. Should Biden seize the moment, TPA may yet afford him the legacy of international trade leadership he once praised.
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