Don’t Envy Senator Wyden

Being a U.S. senator can be fun. The position brings with it a certain amount of influence, fame, and stature. However, serving in the Senate also is fraught with challenges. Much time must be spent away from family. Flying back and forth between home and Washington can wear a person out. And some voters always are unhappy with you, sometimes really unhappy.

This is a complicated moment for Sen. Ron Wyden (D-OR). He has paid his dues in the Senate since 1997 and now is one of its more senior members. That seniority has brought him to the position of ranking Democrat on the Senate Finance Committee, which has the responsibility (among others) for establishing policies pertaining to international trade.

Congress is trying to decide whether to grant President Obama Trade Promotion Authority (TPA), formerly known as “fast track” authority. TPA commits Congress to an up-or-down vote (no amendments) on a trade agreement presented to it by the White House.  This procedure provides foreign negotiating partners with assurance that Congress will consider any agreement as a complete package, thus avoiding the risk that it might be amended in response to pressure from groups that are unhappy with one or more of its provisions. 

Such pressure dissuaded Congress from approving provisions that had been agreed to by the administration in the 1967 Kennedy Round of negotiations, which were conducted under the auspices of the General Agreement on Tariffs and Trade (GATT). Other countries were not amused when the United States didn’t live up to its Kennedy Round commitments. To rebuild its negotiating credibility, the United States needed to find a way to bridge the Constitution’s clear delineation of powers: the president has the right to negotiate with other countries, but Congress has authority to regulate foreign commerce. 

The response was the Trade Act of 1974, which developed the basic formula for approving trade agreements that has been used ever since. Congress granted the president five years of negotiating authority that covered both tariffs and non-tariff measures.

The most recent version of TPA expired in 2007. President Obama currently is seeking a new grant of negotiating authority in order to conclude the Trans-Pacific Partnership (TPP) with 11 other nations, and possibly also the Transatlantic Trade and Investment Partnership (TTIP) with the 28 members of the European Union. 

Senator Wyden will play a crucial role in determining whether or not TPA is approved. Sen. Orrin Hatch (R-UT), chairman of the Finance Committee, and Rep. Paul Ryan (R-WI), chairman of the House Ways and Means Committee, would like to introduce TPA legislation. However, they don’t want to do so without bipartisan support. There is a long tradition of Democrats and Republicans working together on behalf of trade liberalization. 

Rep. Sandy Levin (D-MI), the ranking Democrat on the Ways and Means Committee, generally opposes trade reforms that could lead to a greater selection of affordable automobiles for consumers. In other words, he’s a lost cause when it comes to sponsoring a version of TPA that the White House might approve. This is why all eyes are on Senator Wyden.

Wyden voted in favor of TPA legislation when it was most recently approved in 2002. He voted in favor of free-trade agreements with Morocco, Australia, the Dominican Republic and Central American countries, Peru, Panama, Colombia, and South Korea. However, he also voted against free-trade agreements with Singapore, Chile, and Oman, so he’s been on both sides of trade debates. 

Senators Wyden and Hatch have been negotiating in an effort to agree on TPA language. So far, Wyden has held out for a version of TPA that would be much easier for Congress to revoke than has been the case in the past. The concern is that such a reluctant grant of negotiating authority would give the administration relatively little leverage with which to close the deal on TPP. U.S. negotiating partners likely would be hesitant to agree to final terms if they think Congress is about to pull the rug out from under them.

The politics surrounding TPA have gotten quite messy for Wyden. A substantial coalition of Democratic Party stalwarts, including organized labor and various left-leaning groups, has mounted an active campaign to discourage him from agreeing to a TPA bill.

On the merits, opposition from unions in Oregon is difficult to explain. Their state is conveniently located on the Pacific coast, so implementation of the TPP would be expected to lead to increases in employment in the port, transportation, and agricultural sectors, among others. Nonetheless, unions and their allies have used claims that are often misleading to argue against approval of either TPA or the TPP. They recognize that Wyden is the linchpin in the process. If he can be dissuaded from supporting TPA, it almost certainly won’t be approved, at least until after a new president has taken office.  

On the other hand, President Obama wants TPA–at least officially–but it’s not entirely clear how hard he’s willing to fight for it. There is no precedent in which President Obama has made a concerted effort to pass legislation that was opposed by such important Democratic Party constituencies. Why would he be willing to do so now, especially when liberal supporters like Paul Krugman, the well-known political columnist, has come out against the TPP (which is the proximate reason for needing TPA), writing, “Why, exactly, should the Obama administration spend any political capital–alienating labor, disillusioning progressive activists–over such a deal?” 

(Note: Economists generally agree that elimination of the numerous trade barriers remaining among TPP nations would lead to meaningful growth in sectors such as agriculture and services. Since the United States and Japan are the world’s largest and third largest economies, the potential benefits of making markets more open and competitive could be substantial.)

At any rate, this is not a time to envy Senator Wyden. In his heart of hearts, he likely wants to support a version of TPA that would give the United States the best possible opportunity to advance an agenda that liberalizes trade. But is it worth the risk, given the certain knowledge that Democratic activists will be very upset, and the uncertainty as to whether the White House really has its heart in the fight? Will President Obama ever be able to come up with enough Democratic votes (probably 20-30) to pass TPA in the House? If not, why should Wyden stick his neck out on this?

It will be interesting to see how he sorts through these issues.