Congress & the Politics of Trade

Former House Ways and Means Committee Chairman Bill Thomas (R-Calif.) quoted President Woodrow Wilson’s 1916 speech to the U.S. Chamber of Commerce in which he argued for creation of a scientific tariff board.  Wilson said he wasn’t interested in the doctrines of free trade or protection because “there is nothing in either doctrine.  The only thing that is interesting,” Wilson went on, “are the facts of commerce and industry, and the only thing that is right to deduce from the facts is something that has nothing properly to do with party politics at all.” 

Speaking at the March 19 Wilson Center seminar on “Congress and the Politics of Trade,” Thomas said he agreed that party politics should not enter into trade decisions in Congress, but politics certainly does because politics is all about who gets what, why and how.  You can’t divorce trade from politics in our system, Thomas argued.  He cited the extension of the President’s trade promotion authority in 2002 when he was chairman of Ways and Means (the key trade committee) in the House.  “It passed by one vote, and I was correctly observed on the floor, waving a red ‘No’ vote card, threatening to bring the bill down” until four reluctant Members finally vote “aye.”  Thomas said he had already worked in committee to fashion enough compromises and accommodations with Members of both parties to secure their votes.  “But there came a point at which I realized I couldn’t accommodate everyone or there would be contradictory provisions in the same bill.”

University of Maryland political scientist David Karol said his historical review of trade legislation over time reveals an interesting switch in the positions of the two parties.  Whereas in the nineteenth and early twentieth centuries, the Democrats were free traders and the Republicans were the protectionists, after World War II that began to change given the changing global economy.  Today, Democrats favor a more protectionist position and Republicans are the free traders, and there has been tremendous continuity over the last half century.  This was reflected in last year’s votes on three bilateral trade agreements with Panama, Colombia and South Korea when Republicans voted almost unanimously for them, while Democrats voted two-to-one against, even with a Democratic President.  Karol also noted that the Senate tends to be more pro-trade than the House for a variety of reasons, though Senate Democrats are still less favorable to trade agreements than Republicans.  Presidents, on the other hand, tend to promote greater trade with other countries, even Democratic presidents whose party and constituencies tend to be opposed.  He noted that President Barack Obama, when he was a Senator, voted against trade agreements and in his presidential campaign vowed that if elected he would renegotiate the North American Free Trade Agreement (NAFTA).  However, since becoming President he backed-off that pledge and is now carefully negotiating other agreements.

Timothy Reif, now general counsel in the Office of the U.S. Trade Representative, and a former trade counsel to Democrats on the House Ways and Means Committee, disagreed with Karol’s characterization of this president as more passive on trade than other presidents, citing a very active agenda including: getting the three free trade agreements passed last year in one day and moving forcefully now for their implementation; pursuing the Trans-Pacific Partnership talks toward agreement with Australia, New Zealand, Vietnam and other countries; and being more vigorous in bringing enforcement cases against other countries that violate international trade rules.  Reif noted that the current U.S. Trade Representative, Ron Kirk, the former mayor of Dallas, didn’t like to have problems sitting around for more than four or five days when he was mayor, and he has brought that same approach to the trade office.  Now, disputes that have been hanging around for four or five years are being resolved.

New York Times economics reporter Annie Lowrey cautioned against expecting much to happen on trade the rest of this year as the country moves into a presidential campaign season.  “We won’t see movement on fast-track authority for the President,” even though the President’s trade representative says he will ask for it this year.  Nor did she expect action on the President’s proposed consolidation of various trade agencies and functions in the Commerce Department, which she said is currently “a dog’s breakfast of agencies.”  She noted that past presidential reorganizations have always promised improvements in government performance, but have not always lived up to their promise.  The Export-Import Bank is up for reauthorization this year, but some conservative Republicans are resisting because they view it as “corporate welfare.”  The President will continue to make progress on those trade matters which do not require approval by Congress, such as pushing for a doubling of U.S. exports and bringing enforcement actions against other countries.  “Everybody loves exports because they mean selling our goods to other countries and that means more American jobs.”

Thomas noted that imports also create jobs for Americans, and that the President’s talk about exports is political rhetoric to demonstrate he cares about “jobs, jobs, jobs.”  Thomas said he favored greater trade coordination as opposed to the President’s proposed consolidation of trade functions.  He agreed with Lowrey’s prediction that Congress will not likely act on fast-track trade authority for the President because it becomes a lightning rod for partisan controversy.  If he could make one change, he said, it would be to give the President semi-permanent trade negotiating authority, subject to withdrawal by Congress only if he abuses it.  Congress now loans that authority to the President because under the Constitution it has exclusive authority to regulate trade between nations and set tariffs.  Thomas says the short-term extensions of fast-track authority only invite heated debates over its renewal, creating a lot if ill-will when Congress should be focusing instead on helping to shape the actual trade agreements.  He said he thought his proposal could be accomplished without having to pass another law to terminate the authority--something the President would likely veto.  However, a question was raised about whether Thomas’s proposal runs contrary to the Supreme Court’s 1983 decision in INS v. Chada that unilateral congressional rejection of executive authority or actions violates the Constitution’s “presentment clause” that requires that any change in law be presented to the President for his signature or veto.