Manufacturers push hard for trade promotion authority

The vote in the House on trade promotion authority (TPA) legislation will be whisker-tight, and maybe in the Senate too.

The TPA bill is important to manufacturers because it will set the bar on what the U.S. must demand from Japan and the 10 other countries (Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) with which it is negotiating a Trans-Pacific Partnership (TPP). That pact would cover approximately 40 percent of world economic output, making it the biggest free trade agreement to date. Passage of the TPA would make it easier for the Obama administration to win Congressional approval of the TPP because the TPA allows the White House to submit the TPP for an up or down vote in Congress%mdash;no amendments allowed.

Manufacturers support both the TPP and the TPA, especially given the drop-off in exports over the past year because of the growing strength of the dollar. But opponents of the TPP, led by Sen. Elizabeth Warren, D-Mass., argue the TPA will allow countries such as Vietnam, Malaysia, and Singapore to flood the U.S. with cheap imports, contributing to a continued loss of manufacturing jobs, which she thinks started when Congress passed the North American Free Trade Agreement in 1993. Warren also repeatedly has attacked the inclusion of investor-state dispute settlement (ISDS) provisions in the TPP. Warren said including ISDS in the TPA would tilt the playing field in the U.S. further in favor of big multinational corporations.

“ISDS would allow foreign companies to challenge U.S. laws—and potentially to pick up huge payouts from taxpayers—without ever stepping foot in a U.S. court,” she argued.

In the meantime, the National Association of Manufacturers enlisted many manufacturing trade associations that backed ISDS in a letter to Congress. The 60 signatories said they strongly support the inclusion of robust market access commitments and investment protections, enforceable through ISDS, in ongoing U.S. trade negotiations.

“Those opposed to strong U.S. trade agreements have been critical of ISDS, mischaracterizing it and ignoring the importance that this fundamental protection and enforcement mechanism provides for businesses and workers here in the United States doing business around the world,” the letter stated.