Chief U.S. trade negotiator Mike Froman and, by extension, his boss in the White House have just flunked “Negotiating 101” yet again – in the process powerfully validating Congress’ reluctance so far to award President Obama fast track authority to reach new trade agreements.
The Obama administration started out the Trans Pacific Partnership (TPP) talks on the wrong foot by downplaying publicly America’s decisive economic leverage. As I’ve pointed out, the U.S. economy represents nearly two-thirds of the total gross products of the first round of TPP economies. But the president and his trade envoy instead kept stressing to Americans (and their interlocutors) that the deal would create a free trade zone amounting to nearly 40 percent of the world economy. As a result, they’ve counterproductively signaled a belief that the United States needed the deal at least as much as its generally much smaller (and much more trade-dependent) negotiating partners.
Messrs Obama and Froman continued poor-mouthing America’s commanding heights position when they made their case for fast track. Those trade-dependent TPP economies (many of which are especially dependent on selling to the United States), the argument went, wouldn’t negotiate seriously with Washington without guarantees that Congress wouldn’t take their (alleged) best offers and then insist on still more concessions. Of course, this obstinacy would amount to the rest of TPP-ville cutting off much more than its nose to spite its collective face.
Now, in the wake of a major Congressional defeat for the fast track request, Mr. Obama has instructed Froman to engage in a new leverage-squandering exercise. Anyone with any street smarts would recognize last week’s trade vote as a golden opportunity to secure a better bargain for the United States. At the least, the administration should be playing “Good cop, bad cop,” telling the TPP governments that it would like the talks to stay on track but those darned legislators of ours aren’t yet on board. Therefore some new sweeteners from you could greatly help.
Instead, as the Financial Times paraphrased the message Mr. Obama instructed Froman to send to TPP capitals, Washington was focused on “reassuring them that the US was still interested in concluding the deal soon.”
The policy questions raised by this seeming diplomatic ineptitude couldn’t be more important – especially since these poor-mouthing assumptions are shared by Congress’ Republican leaders and, evidently, by the major GOP presidential hopefuls who support America’s current trade strategy. Principally, if American negotiators believe they have so little clout at the TPP talks, how can they possibly carry out most of the negotiating instructions contained in the fast track bill? Unless the other TPP countries can be expected voluntarily to adopt strong labor and environmental standards or curb the activities of their state-owned enterprises or refrain from currency manipulation, why would anyone believe that Washington can induce meaningful compliance at the negotiations, or afterwards?
Former President John F. Kennedy famously and wisely warned Americans never to “negotiate out of fear.” Until the Executive Branch shows signs of recognizing a truth that should be screamingly obvious, its leaders shouldn’t be entrusted with the sweeping authority created by fast track.