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HOUSTON CHRONICLE: Houston in the hub of trade fight in Congress
Washington,
May 8, 2015
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Trade
Since the Port of Houston's first direct shipment of cotton to Europe in 1919, the 25-mile-long complex of wharfs, refineries and petrochemical complexes has become the busiest port in the United States in terms of foreign tonnage. It's also become a symbol of Texas' role as a national export hub, thrusting the Lone Star State into the middle of another national row over trade that has scrambled the usual political fault lines in Congress and in the field of 2016 presidential candidates. President Barack Obama, in a rare alliance with congressional Republicans like The Woodlands' Kevin Brady, is pressing for "fast track" authority to help cement a pair of landmark trade deals with the European Union and a group of Asian and Pacific Ocean nations. On Friday, Obama toured Nike headquarters near Portland, Ore., to tout the benefits of trade, which is tied to almost 12 million U.S. jobs, a fourth of them in Texas. In general, these international agreements are designed to reduce tariffs and other barriers to trade, with the hope of enhancing business opportunities. MORE INFORMATION
Trade and Texas The good: Texas exported $326 billion in goods and services in 2013, ranking it first in the nation. International trade, including exports and imports, supports 3 million jobs in Texas - about 1 in 5. The bad: More than 159,000 Texas jobs have been certified under the government's Trade Adjustment Assistance program as lost to offshoring or imports since NAFTA went into effect in 1994. Since 2009, Texas agriculture exports to NAFTA partners Canada and Mexico have dropped 23 percent, while imports from those countries has doubled.
Expanded trade from the two pending agreements combined would cover 60 percent of the world's gross domestic product and 40 percent of all global trade.
"I've been talking a lot about this lately, because I view smart trade agreements as a vital piece of middle-class economics," Obama told the Nike workers. "Not a contradiction to middle-class economics; it's a part and parcel of it."
In a sign of the stakes involved, labor groups and their Democratic allies in Congress are rallying opposition on a scale not seen since the 1994 North American Free Trade Agreement, which liberalized trade between the U.S., Canada and Mexico.
Also opposed are several dozen hard-right Republicans in the U.S. House - including Texas' Louie Gohmert - who argue that the Constitution gives Congress exclusive authority to set the terms of trade.
With critical votes coming up in both the House and Senate this month and next, Obama is expected to continue a full-court press that has the Democrats' leading 2016 presidential contender, Hillary Clinton, walking a tightrope between her party's divergent factions on trade.
Democrats on the fence
Meanwhile, Texas U.S. Sen. Ted Cruz, a GOP candidate for president, has come out firmly in support of giving the president streamlined authority to negotiate trade deals, breaking from some of his most staunchly conservative House allies.
The coming showdown also has put a number of Texas Democrats - including the Houston trio of U.S. Reps. Gene Green, Al Green and Sheila Jackson Lee - on the spot. All three have expressed reservations about labor and environmental protections under the proposed Trans-Pacific Partnership, which the administration sees as a linchpin of its strategy to "pivot" toward Asia and check the power of China.
Gene Green, echoing some conservative Republicans, also has openly challenged the president's request for fast track authority - which limits the ability of Congress to modify trade pacts once they are negotiated. But Jackson Lee, much like Clinton, has remained uncharacteristically silent, saying she's not yet prepared to take a public stand.
Al Green, through a spokesman, also had no comment on fast track, formally known as Trade Promotion Authority. Other Texas Democrats still on the fence on fast track authority include Joaquin Castro of San Antonio and Beto O'Rourke of El Paso.
Adding to the mix are a few immigration hard-liners in the GOP wary of expanding Obama's executive powers. Some have voiced concerns that an emerging trade deal could be a "Trojan Horse" for opening the nation's borders.
"Some folks are being pulled in a very difficult way on trade," said Texas U.S. Rep. Henry Cuellar, a pro-trade Democrat from Laredo. "In Congress, there are tough votes and easy votes. Sometimes you've got to do what you've got to do."
The misgivings in both parties have Senate leaders like Texas U.S. Sen. John Cornyn pressing for votes on both sides of the aisle. Cornyn, pointing to Texas' position as the No. 1 exporting state in the nation, called on Democratic Minority Leader Harry Reid to reconsider his threats to block or delay the coming trade votes.
"What's not to like about increased markets for the things we grow, the livestock we raise, and the manufactured goods we make?" Cornyn said. "I think it's a win-win."
Past free trade agreements, notably NAFTA, have required votes from both parties to pass.
The Texas business community, which leads the nation with $326 billion in goods and services exported in 2013, is all in. Trade advocates say 3 million jobs in Texas - more than one in five - are tied to international trade and that trade-related jobs are growing faster than the state's overall employment.
"The Houston region and Texas greatly depend on trade and stand to significantly benefit from the opportunities that are opened up under U.S. trade agreements," said David Thomas, vice president for trade policy at the Business Roundtable, the leading business lobby on the current legislation in Congress.
But the outcome remains uncertain.
An influential coalition of labor, human rights and environmental groups has put pressure on Democrats, who have enough votes in the Senate to derail both fast-track trade negotiating authority and the Trans-Pacific Partnership, a pending 12-nation pact covering Pacific Rim countries in South America and Asia.
More protections urged
While many Democrats have been squeamish about opposing Obama on fast track authority, they have been less reticent about insisting on greater protections in the Trans-Pacific Partnership negotiations. More than 150 House Democrats, including nearly all the Democrats from Texas, wrote the administration a letter last spring, saying, "We must do everything possible to prevent the American marketplace from being flooded with imports manufactured by workers laboring without human dignity and individual rights."
Cuellar was not among them. Having been targeted by labor groups to little effect, he said, he has been counseling other pro-trade Democrats who feel the pressure of their traditional union allies. "I think it would be a mistake for the Democratic Party to be against trade," he said.
But Bob Cash, director of the Texas Fair Trade Coalition, which includes the AFL-CIO, says opponents of the pending trade pacts are not against international trade. Instead, they have challenged the fairness of trade agreements that they say fail to take into account the low-wage economies of countries like Vietnam, Brunei and Malaysia, where workers have few rights.
"We're in favor of trade," Cash said. "We think trade done right does and can create American jobs. But we think the free-trade template based on NAFTA has done exactly the opposite."
Cash concedes that trade deals like those with Mexico and the nations of Central America have created jobs in Texas. "The problem is the jobs they eliminate are higher-paying jobs," he said.
Business groups dispute that, relying on a recent report by the White House Council on Economic Advisors finding that export-intensive industries in the U.S. pay average wages about 17 percent higher than those in non-trade-related industries. The business lobby, which includes the Texas Farm Bureau, also argues the trade pacts level the playing field between comparatively open U.S. markets and those of foreign countries that protect their domestic producers with currency manipulation and other trade barriers.
Conflicting statistics
Trade debates are often a jamboree of conflicting statistics. According to the Labor Department, more than 159,000 Texas jobs have been certified under the government's Trade Adjustment Assistance program as lost to offshoring or imports since NAFTA was signed into law by former President Bill Clinton. At the same time, a recent HSBC banking company study found that lower duties on imports from current trade pacts have saved the average American family $13,600 a year.
Aside from the merits of trade, the rawest passions in Congress have been reserved for the perennial turf battle over who decides, and how. The fast track authority Obama seeks would let Congress set the parameters of any future trade pact, but then limit lawmakers to a simple up-or-down vote once a deal is reached.
Critics in both parties say that cedes too much power to the White House.
"Fast track is not about selling more American goods and services overseas," said Gene Green, whose district straddles the Houston Ship Channel, where the freighter Merry Mount started her historic voyage in 1919 with 23,000 bales of cotton stuffed in her holds. "It is Congress handing over its constitutional duties to the White House."
Brady said it's just the opposite. "It isn't about giving the president more authority," he said. "It's about asserting Congress' authority. We set the rules for the president."
With a smaller number of Democrats expected to back Obama's trade agenda, compared to past trade debates, House Republican leaders say they will have to whip up as much GOP support as possible in the coming weeks. Accordingly, they have also agreed to schedule votes first in the Senate, where their support is more precarious.
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