Trade agreements usually generate support from pro-business leaders, with their promise of expanded commercial relationships overseas and access to new markets. The general consensus is that trade pacts also could be really good for small businesses seeking to grow.
But two trade agreements President Obama wants to advance as part of an ambitious domestic agenda for his last two years in office--the Trans-Pacific partnership in Asia and the Transatlantic Trade and Investment Partnership in Europe--are getting push-back from both the left and right.
Conservative Republicans and liberal Democrats in Congress are jockeying to nix both trade pacts for different reasons, according to a recent story in the New York Times. Conservatives want to end them because they'd be put up for fast-track approval, which they reportedly see as giving the president too much authority. Fast-track votes typically happen as a straight up or down procedure, and they do not give members of Congress the ability to add additional items to the bills. For their part, liberals worry the free trade agreements will cost the U.S. jobs and might weaken unions.
“Some of my conservative friends are worried legitimately about the issue of sovereignty,” Senator Bernard Sanders, an independent from Vermont, who opposes international trade agreements because of their negative impact on domestic workers, told the Times. Tea Party Republicans, for example, might worry that a straight up and down vote on trade might give the president too much influence over economic policy.
But trade experts say much more is at stake with the current trade agreements, particularly for small businesses.
“There is some grandstanding here because the truth is that you can’t negotiate deals with multiple foreign countries if you have to keep rewriting the focus of the trade agreements,” says Jim Kessler, senior vice president for policy and co-founder of Third Way, a centrist policy think tank in Washington, D.C.
Trade agreements are also suffering from a post-NAFTA crisis, trade analysts say, referring to the North America Free Trade Agreement passed under President Clinton in 1994. That pact has been accused of syphoning manufacturing jobs from the U.S., while expanding employment overseas, often with poor conditions for workers and weak environmental oversight.
But expanding opportunities overseas could be an intelligent way to stimulate growth in the U.S. economy, Kessler and other experts say, adding that new trade agreements have more protections for workers, and the environment, among other things.
In 2013, U.S. exporting businesses created 1.6 million new jobs, according to federal government data. Also that year, U.S. exporters sold $2.3 trillion worth of goods and services overseas, which was a record.
Still, Kesseler says the U.S. could do a lot better. America currently ranks at the bottom of a list of top 40 global economies for the percentage of goods and services exported, which is about 13.5 percent of gross domestic product. (China and Germany, by contrast, export 26 percent and 45 percent of their goods and services, respectively.)
By increasing exports a mere two percentage points, GDP would grow by an additional $300 billion, Kessler says.
“There is room to grow here, and export jobs here have been shown to create many middle class jobs with wage premiums that pay a wage of 20 percent higher than other jobs,” Kessler says.