Clinton Faces Hard Political Choices on TPP

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Hillary Clinton has a problem on trade. As the Obama administration’s top diplomat for four years, she has emphasized the importance of the 12-nation Trans-Pacific Partnership agreement to President Obama. But amid the controversy over the deal since talks wrapped up last October, she has pointed to a variety of reasons why she opposes it as it stands today.

If she becomes president, Clinton could renegotiate TPP if Congress doesn’t act on it before then. That means her choice of a running mate could prove crucial to that effort now.

Obama is still searching for a way to get both chambers of Congress to approve the agreement this year. His best shot is in a lame-duck session after the presidential election, before the inauguration of his successor. He faces significant headwinds in doing so. Democrats who typically oppose these agreements have vowed to sink this one. Some Republican lawmakers have lined up against it too, reflecting a shift in their party that’s encapsulated by the success of their presumptive nominee, Donald Trump.

Clinton she has said she opposes a lame-duck strategy for approving TPP. If she is inaugurated and TPP remains pending business, she could go back to the drawing board and renegotiate parts of the deal that she doesn’t like. It’s been done before. Obama scrapped a trade deal with South Korea that the George W. Bush administration signed. He then renegotiated a number of provisions, most notably its tariff on automobiles, and got a new version approved in 2011 that had the backing of some major unions like the United Autoworkers. UAW opposes TPP. 

Some experts doubt that a renegotiation strategy on TPP would be feasible because of the difficulty of making changes to a deal between 12 parties.

“I don’t see how you renegotiate TPP,” said Gabriel Horwitz, vice president for the economic program at Third Way, a pro-TPP Democratic think tank. “It is a massive deal with a massive number of world powers. Opening up one stitch over here bursts open 15 other seams over there.”

Horwitz said the only real option for Obama is to get the deal done during the lame-duck session. TPP’s enactment before the next inauguration would also allow a possible President Clinton to wash her hands of the issue for good, even if she publicly proclaims that isn’t what she wants.

As Clinton mulls who she might choose as her running mate in the likely event that she wins the Democratic nomination, a number of vocal opponents of TPP have been floated as the possible next vice president. They include Sen. Sherrod Brown (D-Ohio), a Clinton supporter and one of the most outspoken lawmakers on trade issues in the party. Other possibilities include Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.).

Derek Scissors, a resident scholar at the American Enterprise Institute and a proponent of open trade policies, said he doesn’t see Clinton as completely opposing the deal.

“I don’t think she’s trapped in being anti-TPP,” he said. “I do think she’s going to have to change it, and I think the change is going to be tricky because there’s so many countries.”

Sanders, however, has made it clear where he stands on the prospect of renegotiating TPP.  “We shouldn’t re-negotiate the Pacific trade proposal,” he said in a March 12 statement. “We don’t need to tinker with this agreement. We need to defeat it.”

Brown’s statements about TPP have been more accommodating. He would “welcome the opportunity to seek changes to the agreement … but would not support the agreement as it stands today,” Brown’s office said in a statement provided to Morning Consult.

Brown has a long list of reasons for opposing the deal. Most prominently, he has blasted its mechanism that determines how many components of an automobile need to be sourced from within the TPP region before a vehicle is allowed to qualify for the agreement’s tariff benefits. Those “rules of origin” were at the center of Clinton’s trade rhetoric when she campaigned to win Ohio’s Democratic primary in March.

Brown’s other demands include stronger language to stop currency manipulation, more worker protections in the agreement’s labor chapter, and the overhaul or elimination of a quasi-judicial system that allows companies to take governments to international arbitration courts if they feel like their rights as investors have been violated.

That system, known as investor-state dispute settlement, or ISDS, is at the center of Warren’s reasons for opposing TPP.

ISDS has been included in most U.S. trade deals, and the administration regularly notes that the United States has never lost an ISDS case. But Warren and other opponents worry that the mechanism gives companies free reign to sue governments to undermine consumer and environmental protections.

Renegotiating TPP in line with the priorities that figures like Brown have outlined could tamp down some of the worries about the deal among unions and nongovernment organizations, whose reasons for opposing the deal are varied.

But a Clinton administration, at the same time, also would run the risk of alienating Republicans or trading partners if it went too far in placating those liberal figures. It would be even tougher if she has a trade-wary vice president.

“If [Clinton] brings in a running mate who is going to campaign on protectionism, that’s a real problem,” said Scissors. “If Elizabeth Warren is brought on and told, ‘Go run amok on trade,’ it’s going to make it really, really hard for a Clinton administration to pivot.”

Then there’s Labor Secretary Tom Perez, who has emerged as a possible running mate for Clinton because of his bona fides with the labor-affiliated left wing of the party. By virtue of his affiliation with the administration, he also supports TPP and argues on behalf of the administration that the deal’s labor chapter is the strongest that the U.S. has ever negotiated.

But picking a pro-TPP running mate would also raise eyebrows, Scissors said, because of Clinton’s stated opposition to the deal. “Taking someone who appears to be pro-TPP will be seized upon as enormously important, whether it is or it’s not,” he said.

Aides for the Clinton campaign didn’t respond to a question about whether the former Secretary of State would seek a TPP renegotiation if elected.

Morning Consult