A Victor Without Victory

Free trade critics in both the U.S. and Germany could end up getting less than they originally expected.

It was a smashing defeat for Barack Obama – at first glance. The free trade alliance with America’s allies in Asia (the Trans-Pacific Partnership or TPP), an undertaking that Obama hoped to include as part of his presidential legacy, lacked his party’s support. First, the president didn’t get approval of his high-profile Trade Promotion Authority bill, which concerns the way that Congress gives a president free range to negotiate free trade agreements. Congress may then vote yes or no on the final result; individual details are not subject to a vote.

No Resistance in the US to Free Trade with Europe

The unexpected turn of events affected not only the Pacific but the trans-Atlantic agreement as well. Meanwhile, the opposition in Germany shouldn’t be too quick to rejoice. The test of strength could take place differently than it hopes.

There were only 126 votes in favor and 303 votes against Obama’s desired compromise package in the U.S. House, which shows how much of a lame duck he already is. Democrats no longer fear him; they are thinking about support from their constituencies 17 months before the election. The sector of trade union representatives is skeptical of free trade, but only with low-wage countries such as those in Asia. There is no serious opposition in the United States against free trade with Europe.

To appease workers, Obama had to include an expensive aid package in an extension of the bill, one of the drawbacks of free trade. It also drew ire from Republicans, who favor free trade without restrictions. The Senate decided the bipartisan compromise a few days ago. In the House, many Democrats voted against the deal. The Republicans immediately called another vote — 219 to 211 — which gave the president the trade agreement but without the aid package. They figure that they have a good chance to put a Republican in the White House. They would then have the authority to authorize free trade across both the Pacific as well as the Atlantic.

Now two different resolutions — the approval of free trade with conditions from the Senate and approval without conditions in the House — must be reconciled. Free trade critics will probably end up getting less from any future deal than the one they have currently rejected.

Trans-Atlantic Trade and Investment Partnership skeptics in Europe should keep in mind that something just like this recently happened in the European Parliament. The two largest camps, the Socialists and the European People’s Party, negotiated a compromise for conditions in the TTIP that they advocate. Before the plenary vote, there were so many amendments that the vote was cancelled. Opponents to the TTIP celebrated a victory. They also could have miscalculated.

Those who don’t honor cohesive compromises are incapable of making policy and must consider that a majority is also possible without the involvement of skeptics. For those capable of realpolitik, one major argument alone provides the best possible motivation to achieve a majority in favor of compromise. If Europeans and American don’t jointly define rules with high protective standards in world trade now, the Chinese and others will eventually enforce lower standards.