Congressman Sandy Levin has come out in full force, raising questions about the Asian trade agreement that the White House is pushing for approval.
In an Op-Ed piece in Politico co-authored by Simon Johnson, professor at MIT Sloan and previous chief economist at the International Monetary Fund, Levin takes aim at amendments that he believes are needed in the controversial Trans-Pacific Partnership that faces congressional approval to allow a "fast track" process.
Levin, a Royal Oak Democrat who represents most of Macomb County, claims that the 11 disparate countries with which the U.S. seeks a trade treaty, including Japan, Mexico and Vietnam, present a cautionary tale.
"Will the agreement boost U.S. growth, address wage stagnation, help our strategic partners and create legitimate rules for international trade in the 21st century? The answer hangs in the balance.
"With negotiations reported to be entering the final stages, it is critical that Congress focus at this point not on how to 'fast track' approval of an agreement — through passing Trade Promotion Authority — but on making sure the TPP itself is on the right track."There is a real choice to be made between two different approaches to international trade."
The first approach, the veteran House member asserts, is based on the free-market view that more trade is always better. The focus of this libertarian-style outlook is on eliminating regulatory barriers to exports and foreign investment. It assures that market forces will not just increase economic efficiency, but also improve governance in developing countries. Similarly, Levin writes, trade imbalances between nations will work themselves out.
The second approach offered by the congressman is that rules matter — the details of labor standards, investor protection, intellectual property rights, permissible subsidies and environmental safeguards help determine who gains from trade. According to Levin, this approach recognizes that, without good rules, higher potential profits associated with new export and investment opportunities increase the temptation to pollute the environment and suppress worker rights.
Here is a bit more from the Op-Ed column:
"History is on the side of this second view. In 'Why Nations Fail,' Daron Acemoglu and James Robinson document case after case in which growth falters and countries collapse because the political regime was oppressive and corrupt. There are precisely no cases in which these underlying issues were fixed simply by being able to increase exports."And it now seems completely out of date to insist that big current (trade) surpluses — when a country sells a lot more to the world than it imports — are of no consequence. U.S. and other government officials emphasize that such 'global imbalances' have affected and still undermine the stability of financial systems."
And then the lawmaker adds this criticism of the Obama administration:"The U.S. trade representative calls the TPP the most progressive trade agreement in history, but this remains to be seen. Success should not be measured relative to the status quo. The question rather is: Are the agreement’s rules sufficiently forward-looking and strong enough to bring about meaningful lasting improvements to people’s lives, by enhancing the positive aspects and addressing the negative impacts of globalization?"
Levin and Johnson then outline several changes to the TPP that they believe are necessary to ensure fairness and economic benefits for the U.S.
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