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U.S. Department of State

Diplomacy in Action

Trade Promotion Authority and the Prospects for Free Trade Agreements in 2015

Jane Harman, Director, President and CEO of the Woodrow Wilson International Center for Scholars
Washington, DC
March 6, 2015





10:30 A.M. EST

THE WASHINGTON FOREIGN PRESS CENTER, WASHINGTON, D.C.

MODERATOR: Okay. Let’s get started. Good morning, everybody. Welcome to the Foreign Press Center on a very cold and snowy Friday. I really appreciate you all coming in. As you know, our speaker this morning is Ms. Jane Harman, the president of the Wilson Center, and a former nine-term congresswoman. And she will be talking about trade promotion authority and free trade agreements from the standpoint of politics and how these play in America and in congress, based on her extensive experience being part of any number of FTAs over the years.

And so without further ado, I will turn it over to Ms. Harman for some opening remarks.

MS. HARMAN: Thank you. Well, thank you, Mike, and good morning. You all get a special Girl Scout award for getting here. Apparently the RSVP list was much longer but all those people are stuck in metros. Uber didn’t come. It’s too warm under their duvets or whatever it is. But you get an award. And I do too, by the way, and so does Mike, and so does Meg King, who is the strategic advisor to the Wilson Center, and so does Erin – she gets a special thank you for tours in difficult places; maybe some of you do too.

But anyway, I’m happy to talk about trade. It is something that interests me, and my perspective, as Mike said, is as one who has spent years – hundreds of years – focused on security – U.S. security relationships around the world and as one who was in the hardly little band of pro-trade Democrats while I served in Congress. In fact, in just kind of looking at where is TPA, someone on my staff pointed out that when it last came up in the House in 2002, I was one of 25 Democrats who voted for it. That is not a huge number. I do not remember how many Democrats were in the House, but I’d guess sorta, kinda, 200. So do the math. That’s not a lot of Democrats.

Now why was that? Because the politics of voting for trade for a Democrat – and obviously now for some Republicans, too – are very hard. And I knew going into that vote that a lot of labor unions were not going to be happy about it and they represent, I’m sure now and did then, a number of my constituents. But I felt – and I feel – that the politics of trade for the U.S. are positive and that trade builds jobs, contrary to what some claim, and that we either have a choice to be in the world economy or not. And I think “not” is a worse choice. That sort of sounds like the arguments around Iran. (Laughter.) Do we want to do a deal or not? And which way does it play out better? And on that, by the way, I come out for doing a good deal – or a good enough deal. But it’s the same thing here. Doing a good enough trade deal is better than not doing a trade deal.

And so at any rate TPA was passed – barely. I don’t remember the vote in 2002. It has since expired and here we are again. We’ve seen this movie a number of times, but I think this time the stakes are even higher. Maybe there would be something called permanent TPA; I doubt it. But I was part of the plot in Congress in the late ’90s for permanent trade relations with China. That was another hard vote, but I voted for that, and I think it’s much better that that doesn’t expire every decade or so.

At any rate, here’s what I know about this, and I’m sure you can talk to people more current than I am on it, but here is what I know about this. That – I know that this year is the critical time to do this. If we don’t do it this year, TPP, which is almost completed – and again, someone else can tell you all the details – if we don’t do it this year, TPP or at least any role we play in TPP, I think is gone. And any claim we had to rebalance our relationships in Asia, which is what the pivot is, becomes much harder. I also think if we don’t do it this year the negotiations on TTIP with Europe, which are less far advanced, slow down or maybe fail. And again, I think that TTIP is another building block in terms of shoring up the united front we have against a different threat, which is Russia.

And so I think TPA is the crucial element to enabling us to get to the extent we have the – major influence to getting us to conclude these deals. And I think not doing these deals is very bad for the U.S. – our ability to project influence in the world. And it’s not just bad for our economic relationship, it’s bad for our security relationship, because they are totally intertwined.

So that would be kind of point one. Point two, I see a clear economic advantage for us, putting aside the security and advantage for us – economic advantage at home from trade, and exports – I give President Obama a lot of credit for focusing on exports. Exports build jobs, and that case hasn’t been made well enough, but it needs to be made, that when companies can export they hire people. And hiring people in America is something we’re all in favor of. Obviously, the economy’s improved here, but I think the value of exports to U.S. jobs is absolutely clear. And we should never underestimate it.

And I think further that Obama’s willingness – and it’s in his 2016 budget – to increase trade adjustment assistance by 50 percent – goes up from like $6.50 to $9.50 million in the 2016 budget – is a tool that as yet has not been effectively used or effectively enough used. Sure, it’s – but I suggested to the Administration that they make clearer to members what TAA could mean to people in their districts who are threatened by exports. And I think it’s a win-win. I think exports build jobs; I think TAA builds jobs, too.

And last comment about TAA: I think TAA used to upscale people who also could be part of the export market is a win-win. Better skills mean that people get higher pay, and people with higher pay and better skills are obviously better for enhancing the economy. And I think we haven’t put all this together as well as we might.

So in conclusion, I think TPA is crucial for U.S. influence in the world. It’s an economic issue and it’s a security issue. And I think that TAA, as an added tool, helps on its own merits, but also is a way to help get TPA passed by Congress. And I have no idea how many Democrats or Republicans are definite on this vote, but I think at the moment we’re not there. And I was reading – I guess this is the Washington – I don’t know if this is the Post or the Times, but it was an article over the weekend, counting on Wyden to help deliver a trade deal. I think a lot of it comes down to how skillful Ron Wyden is and how brave he is as the new chairman of the relevant Senate committee. And it also – the case wasn’t helped by McConnell moving swiftly to try to put stuff on the floor and basically cutting out the Democrats.

So hopefully that will repair, Wyden will be skillful, and there will be the right deal for the right TPA, and it will pass. And I think it would be an enormous accomplishment for both parties. I don’t see this as an Obama win; I see this as an American win. And just unfortunately almost never do we ever see things in those terms.

So how about some questions?

MODERATOR: As always, folks, please identify yourself, your outlet, and then go ahead and ask your questions. The folks in New York, step up to the podium, and we’ll call on you in turn.

QUESTION: Yeah, good morning. My name is Stefan Grobe. I’m with Euronews, European television.

MS. HARMAN: Hi.

QUESTION: You kind of alluded to opposition in this country to a trade deals when you mentioned the trade unions. I want to focus on the TTIP negotiations. There seem to be – there seems to be opposition in – on both sides of the Atlantic --

MS. HARMAN: Correct.

QUESTION: -- for basically the same reasons. Now, I can sort of understand why the United States were to negotiate a trade agreement with Nigeria or some countries that are not at the same – on the same level, but a trade agreement between the United States and Europe should be a no-brainer, right? Why is there so much opposition?

MS. HARMAN: Well, there’s opposition in Europe too. And again, I’m not – I can’t answer you on a granular level. If you ask me about provision 217 or something, call Mike Froman. I don’t mean to be indifferent, but that – I just haven’t focused on that specifically because I’m not voting on it and I – this sort of general policy issues are what the Wilson Center focus is on. So I don’t want to pretend that I know something I don’t know.

But opposition always comes up on GMOs. I think there’s still a chicken issue, whatever livestock is now involved with hormones. There’s opposition on some of the intellectual property issues, on cyber security, and a lot of these things are coming up on the European side. There’s also opposition on the American side now. I don’t know if she’s only focused on TPP, but by a junior senator from Massachusetts on the way – on the process. I think it’s more than the substance. She feels that there are secret deals with corporations being negotiated in these agreements, and she is for full transparency and is objecting on that basis.

But in addition to that, sadly, some labor unions in the United States see this as a zero-sum game. They think that exports lose U.S. jobs and only if we don’t do this, or certainly don’t do this on a large scale, can we build U.S. jobs. And I respectfully disagree with that. I don’t think that the history proves that out. I think it is a positive-sum game. I actually think we can do both, especially if we skillfully use trade adjustment assistance.

QUESTION: Thank you. Hi. I’m Jennifer Lee with Hong Kong Phoenix TV. I have a question regarding the TPP. So, Undersecretary Cathy Novelli was here and then she mentioned even we don’t have the TPA, it won’t prevent the TPP forward. And she said it’s hopefully we can have the TPP done this spring. So I wonder, you think what we are going to face if we have the TPP done but we don’t have the TPA bill then, and you also said it’s going to be make the Obama Administration’s rebalancing effort even harder. Can you elaborate more on that?

MS. HARMON: Well, I don’t know. Again, maybe the negotiations will conclude before there is TPA. I would be surprised if that were true, but she’s, again, much closer to it than I am and she used to work at USTR and she may know things that I don’t know. But if they conclude and the agreement is not ratified by the Senate, the U.S. is not in the agreement. And that’s what I was talking about. I think that the world could potentially leave us out, and I think that’s very harmful to us. I don’t think this is a time when if the U.S. doesn’t play, the deal stops. And so I worry about that. But the Senate will not ratify this agreement if there’s not a process that enables it to ratify the agreement. No one wants the Senate to renegotiate the agreement.

TPA is a place where things that matter to the United States can be inserted. The Senate won’t vote up or down on a deal that doesn’t adequately protect the environment or it doesn’t adequately protect labor rights or – pick your issue: human trafficking – protect against human trafficking or GMOs or – I’m making a case for what you could put, and there have to be reports on a regular basis to Congress and all that stuff. But that’s where it belongs. It doesn’t belong in – around a negotiating table in, pick an Asian country, with some member of Congress sitting there. And if that doesn’t get done, the U.S. participation in the trade agreement doesn’t get done.

And just one last point, which I’m sure Cathy made, is – and that is that if we really want to protect labor and environmental rights, we need to be in these agreements, not outside them.

QUESTION: Actually, Pat Reber from the German Press Agency. Hi.

MS. HARMAN: Hi.

QUESTION: I – my question was very much along the lines of my colleague here. In one of the hearings just in the past couple weeks, the big issue that was brought up by – it is on --

MS. HARMAN: I can hear you. You’re on.

QUESTION: -- okay – by critics of TPA or people who were wary – it was, I believe, in the Senate – of TPA was the issue of environmental rights and labor rights. I don’t quite understand, when you say that exports – U.S. exports are a threat to U.S. labor, why would that be? I would think U.S. exports would create more jobs and labor --

MS. HARMAN: Well, I not making – I didn’t say I agree with that argument; that’s what they argue. They see it as a zero-sum game; I see it as a positive-sum game. So you and I are agreeing on this.

QUESTION: Okay.

MS. HARMAN: And by the way, people always ask me if I miss Congress. I left there four years ago to succeed Lee Hamilton at the Wilson Center, and I always say no. I miss – I see the people that I like, which is a large number of people in both parties, but I do not miss that environment. The one vote I missed – I regret that I couldn’t have made was the vote we finally got to, took an entire decade, on the Korea, Colombia, and Panama trade agreements, which was – they were in one – FTAs – they were in one package. And I happened to be in the house that night at a dinner when they were passing, and that’s the one vote I missed. I really think this is a positive-sum game.

QUESTION: Hi, Sheng Yang from China Daily.

MS. HARMAN: Hi.

QUESTION: I have two questions related to China. The first one is that last year, Chinese official Ju Gonyo (ph) said that TPP without China is incomplete. So I was considering what’s your take on this comment. And first one is: How do you view China-U.S. trade prospect in the future?

MS. HARMAN: Okay. Well, good. Now I can shill for the Wilson Center. The Wilson Center has the Kissinger Institute on China and the U.S. Notice, China is first. Kissinger Institute on China and the U.S. Henry Kissinger personally is involved; it’s obviously named after him. And we really care about figuring out a long, positive relationship with China, and we spend a lot of time doing that. And I think, certainly, the way the Wilson Center is viewed in China is very positive, and the way China is viewed at the Wilson Center is very positive.

On TPP, I see phases. I think the first phase is countries in Asia plus the U.S. plus others working – trading together. But all of those countries have large or even larger trade relationships with China. So as I see it, China should in some time period – I don’t know how long – become part of TPP also. And while China is forming other trade regimes, my understanding is that comments from China recently are much more positive about TPP. So I see eventually TPP including China, and I think – I personally think that would be a good thing.

QUESTION: Connor Cislo, Asahi Shimbun. I guess I just have a really broad question about the political dynamics of trade in the current Congress, which is – we kind of hear both from members of Congress and from outside groups, business groups, everyone says trade should be what we agree on – like some Democrats like it, Republicans like it; it’s a bipartisan issue, should be no problem. But TPA is not coming as fast as we thought it would --

MS. HARMAN: Right.

QUESTION: I mean, it just seems like there’s not the agreement like everyone’s expecting. Why do you think that’s the case? Are you really optimistic about it? And general thoughts.

MS. HARMAN: Well, okay. Let’s remember 14 years ago, when TPA passed the last time, that’s where I started. It barely passed. This was 2002, right. It was after 9/11. I’m not sure how that impacted it. But there was never – there wasn’t rousing enthusiasm for it 10 years ago, and I don’t believe there was rousing enthusiasm for NAFTA 20 years ago. So these things are hard. And organized labor, or parts of it – not every labor union – are strongly against, seeing it as a zero-sum game. And members who are responsive to organized labor have a hard time figuring out their personal politics. It’s a risk to get some of these labor unions against you. And it was – the votes I took were risky. I didn’t take them in order to get labor unions against me. I took them because I thought they were the right votes, and I think they are the right votes.

But as you remember, I said I was 1 of 25 in 2002, and there were approximately then 200 Democrats. That’s sort of, kind of always the number. And so I was in a small minority who did that. I mean, 175 Democrats disagreed with me, plus lots of Republicans. The thing barely passed. I don’t know what the number was. Obviously, many more Republicans had to vote for it to get to 218. So if 25 – let’s just do the math, which is always halting for me. 193 Republicans had to vote for it if it passed by 218, and I don’t know whether that was – I just don’t know what the number was, but you can look it up.

So it was tough then. It’s always going to be tough, as I would guess, as a vote in Congress. But it’s the right vote.

And that’s why I suggested possibly considering – it may not work out in this climate, doubt it – a permanent TPA, because I think that that would make it easier for us to embrace the FTAs that come after this. And TPA doesn’t have to be stuck in stone; it can be amended. I mean, if there’s permanent TPA and somebody says, “Ooh, let’s add this,” – I don’t know what “this” is, some brilliant new idea for oversight – it can be added. I mean, nobody – laws can be changed. But I think that would create a climate that’s better.

And I just the other day was over at the business roundtable. We were talking about – a Wilson business roundtable initiative on rule of law, which is something that’s really important to creating business climates that promote American investment. And there was a group of CEOs there, bipartisan, none of whom could figure out why Congress is making this so hard. And that means that there is obviously support in both parties for doing this, but not enough support to get this thing to be brought up soon and to be overwhelmingly bipartisan, which is, again, the way I think it should come up.

MODERATOR: Do we have any other questions? Yes, we do.

QUESTION: Sure, I’ll go again.

MS. HARMAN: Go again. Come on.

QUESTION: From German Press Agency.

MS. HARMAN: Well, and the Germans have – there’s some mixed reaction to this in Germany to TTIP, which you obviously know.

QUESTION: Yes, there is. I mean, one of the big issues that the Europeans are bringing up involves these investor state courts that I think the junior senator from Massachusetts has went on at great length about on the op-ed page the other day.

MS. HARMAN: Yeah.

QUESTION: In fact, this was an invention of the German trade politics in the ’50s. I think their very first investor state court was set up in an agreement with Pakistan, and it was to ensure German investors against lack of rule of law in Pakistan. So I wonder if you can speak a little bit to those courts and what they mean.

MS. HARMAN: Well, international courts of all kinds scare Americans. They just do. I mean, think about the International Criminal Court and how that’s playing out. And I don’t think we understand well enough what they do and what they don’t do, and there needs to be a better education job. I was reading – this stunned me – that USTR has held more than 1,500 briefings – yikes – on TPP. I assume these have to do with sort of kind of in the air space of Congress, 1,500 briefings. Well, somebody better explain this better. I mean, she – her objections – Elizabeth Warren’s objections are getting some consideration, again, in both parties. Both parties have a kind of center interventionist pro-trade wing, which is getting smaller because a lot of people in the center are either losing or leaving, and then they have wings on the left and the right which are less interventionist, some might say isolationist, let’s not do stuff with others wings. And so a criticism like hers gets some traction.

So I think my answer to you is I don’t know enough about it. I didn’t know it was invented in Germany, but I think it needs to be explained better, also to the European public. There’s no question that some of these concerns get traction there. And we’ll see. But one point I didn’t make and I said how critical it was to do this this year, especially if you’re right and TPP’s getting concluded, but next year is a presidential year – I thought I would point that out to this crowd – I’m kidding – and I don’t think serious stuff gets done, or it gets done less. I have seen this movie because I spent so many centuries in Congress.

Let me say one last thing that I didn’t bring up. It doesn’t relate to trade but it relates to Mark Lippert and his being knifed the other day. I’m sure we’re all appalled. He’s somebody many of us know. I had his wife’s email address, so of course, I’ve emailed her and got a very thoughtful reply. But having somebody be able to do that to an American ambassador – or a German ambassador or any ambassador – is quite terrifying. And we’re all lucky that even with 80 stitches, he’s apparently fine. I mean, I don’t know what fine means, but he will get through this. He easily could have been killed, and I obviously think we need to up security in an environment like that. I guess he was in a restaurant. Erin and I were talking about that. I was asking, “How could he have access to a knife like that?” Well, maybe there was no security, but maybe if there was security it came through the kitchen or whatever. But I mean, a really chilling story. And on behalf of the Wilson Center, we send our sighs of relief that he survived this.

MODERATOR: Jennifer.

QUESTION: One more on the TPA. So when the Republican took over the Senate and the House, trade is really seen as an area that the Republican and Democrats can cooperate. But I think the Senate Finance Committee Chairman Hatch, he just said that the bill is stuck and it won’t – no bill will be introduced before April. So I wonder – do you think – what’s the sticking point right now?

And also there are a couple issues that people are talking about --

MS. HARMAN: Yeah.

QUESTION: -- like the currency manipulation.

MS. HARMAN: Right.

QUESTION: Do you think these kind of issues will impact the – how the bill will – going forward?

MS. HARMAN: Well, again, I’m not a trade – I’m not an expert on TPP or TTIP, but currency manipulation is a big argument – negative against both, especially, though, TPP. And there’s always been this issue about China and currency manipulation, but it’s not the only country that gets slammed.

It is in this article, but I actually don’t remember about why Hatch is delaying this. Hatch is a guy who is good at working with Democrats. He and the late Ted Kennedy worked together on many things. I know Hatch pretty well and that’s his history. Wyden is a fairly new chair. The last chair of Senate Finance was Max Baucus, with whom Hatch worked very well. Max is now our ambassador to China.

So I don't know what the April thing is, but I don’t think this was helped by what McConnell did, which was to announce a few weeks ago – or maybe a few minutes ago; time flies in politics – that the Senate was just going to move for the Republican-only bill. I think that was not the wisest move. I guess I would put it that way.

And finally, everyone said, or many pundits said, oh, with Republican control of Congress, it’ll be easy to get TPA through. I was one who said, oh, no it won’t, because I remembered the close votes 10 years ago and 20 years ago. I don’t think it will be easy to get it through, and I do think that the anti-trade wing of the Republican Party and the anti-trade wing of the Democratic Party are going to band together, and it just depends on how big they are and how clever they are, whether they can block this. I think blocking it is not in America’s interest. I want to be really clear about it. We have security interests in trading agreements, especially with Asia right now, and we have economic interests.

MODERATOR: Looks like I don’t see any more hands, so looks like a wonderful point to wrap up and say thank you to Ms. Harman for taking the time.

MS. HARMAN: Thank you. Thank you all.

MODERATOR: And thank you all for coming in.

MS. HARMAN: Thank you.