President Obama this week is going to the West Coast to pitch a controversial free trade pact with 12 nations including Japan, Australia and Vietnam. With the Trans Pacific Partnership, the President finds himself aligned with Republicans and divided against many members of his own party who vehemently oppose the trade deal, based on concerns that it will end up costing American jobs, rather than providing a lift to the middle class by boosting U.S. exports, as President Obama asserts.
In his radio address last week, the President explained why he believes the new trade deals are not just important for the U.S. economy, but for U.S. values as well. “They’re vital to middle class economics – the idea that this country does best when everyone gets their fair shot, everyone does their fair share, and everyone plays by the same set of rules.”
That last point is one with which some critics take issue. Former Chief Economic Adviser to Vice President Biden, Jared Bernstein, spoke with Yahoo Finance at the Milken Global Conference in Los Angeles, and believes the Obama administration passed up a chance to ensure the kind of growth that would make a significant impact. “I actually would argue that the administration missed an opportunity by not putting in forcible currency disciplines into these rules,” he said. “That actually makes it tougher for them to get the pro-growth effects that they want.”
The President has tried to allay critics’ concerns about the deals. He told a group of reporters on a conference call that the administration is still pursuing a "parallel" effort to address currency manipulation, but that it's not plausible to put that into the TPP agreement, according to the Washington Post.
In his radio address, he conceded that there are valid reasons for concern about the trade deals. “I understand why a lot of people are skeptical of trade deals. Past deals didn’t always live up to the hype. They didn’t include the kind of protections we’re fighting for today.”
So far, those assurances have not been sufficient to convince many democrats to back the deal. In a highly unlikely partnership, some members of the President’s party have joined forces with the Tea Party in an effort to block the agreements and the fast-track authority the President will likely need in order to get the deals through Congress.
Some Democrats have also been outspoken about what they see as a highly secretive process to craft the agreement, according to Politico.
Despite the opposition, Bernstein believes the trade agreements – the Trans Pacific Partnership (TTP) and the Transatlantic Trade and Investment Partnership (TTIP) - might be one thing on the President’s agenda that could pass before his second term is up, but Bernstein doesn’t think they’ll make much of a difference to the economy. “There is argumentation as to how big a deal that will be to the economy,” he says. “I’m of the school that thinks it probably won’t be that big a deal.”
Correction: An earlier headline read: "Obama's TPP won't help the middle class." In fact, Mr. Bernstein said trade deals won't be a big deal for the economy.
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