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Why the Obama administration is fighting for a trade deal its liberal allies hate

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It's hard to find a voice on the left willing to speak up for the Trans-Pacific Partnership deal. Unions are freezing donations to Democrats in protest of it. Elizabeth Warren is fighting it. Robert Reich is campaigning against it, as is Joseph Stiglitz. Paul Krugman is a soft no, and he wonders: "Why, exactly, should the Obama administration spend any political capital — alienating labor, disillusioning progressive activists — over such a deal?"

I'm currently in the undecided camp — until there's a final text I can run by experts, it's hard to say anything definitive — but in recent weeks, I've asked a version of Krugman's question to a number of Obama administration officials intimately involved in crafting the deal: why are they so committed to this agreement, and why are they having so much trouble selling their usual allies on it?

1. The first thing the administration says is that this is a good deal: when the text is finalized and released publicly, people will be surprised by how different from its predecessors this trade deal really is. They note that Obama ran for office promising to renegotiate NAFTA, and while that didn't happen, this deal fully reflects his thinking about what went wrong with NAFTA — particularly in the weak enforceability of its labor and environmental standards.

2. The need to wait for the text to be finalized has created an asymmetry between critics and supporters: opponents of the agreement can oppose it now, but for the most part potential supporters want to wait for the agreement to be done to back it, as they need to make sure the language they like doesn't change. There are some exceptions to this rule — a letter from a gaggle of top economists from past White Houses, for instance — but overall, the administration thinks it's just in a hard position until there's a final document to show.

3. That said, the unions really do know a lot about what's in this deal. And they still oppose it. Pressed on this, the White House's answer is one that liberals have heard from the Obama administration before, and that they never fail to find frustrating: TPP may not be perfect, but it's a lot better than the alternative.

4. In this case, there really is an alternative. The past major trade deals largely predated the rise of China. But TPP is happening even as China pushes its own trade deal: one with much weaker labor and environmental standards. As Larry Summers writes, "The TPP should be judged not against the hypothetical past in which U.S. workers did not face foreign competition but in the context of a world in which trade integration in Asia is already happening — with or without the United States."

5. Here's how the White House sees it: there will either be a trade deal with America at the core of it that forces countries like Vietnam and Malaysia to live up to labor and environmental standards the Obama administration finds acceptable, or there will be a trade deal with China at the core of it that forces countries like Vietnam and Malaysia to live up to labor and environmental standards China finds acceptable. Which would you prefer?

6. There's also a bigger foreign policy objective here. TPP is central to the Obama administration's long-heralded "pivot to Asia." Trade deals tend to get coded as economic policy rather than foreign policy, but the Obama administration sees that as a function of the Cold War and the post-9/11 era militarizing foreign policy. Americans need to realize that the competition with China, etc., will be about using economic policy as an effective tool of statecraft.

7. This is, the Obama administration thinks, a "put up or shut up" moment for America. We talk a big game about wanting to be the global leader and fearing that China, with its autocratic government and abysmal labor and environmental standards, will supersede our influence in other developing countries. But if we're going to stop that, we need our leadership to be more than talk. If America's trade deal collapses while China's succeeds, it will convince a lot of these countries that America's political system doesn't work smoothly enough to provide the kind of leadership we once did.

8. One really important dimension of the debate around TPP is intellectual property protections. This is an area where American businesses feel hugely disadvantaged overseas, and the administration thinks it's giving them a big win. But there are economists — Krugman is one — who think IP protections have already gone too far, and even if it gives Paramount or Pfizer a bit more protection, the result will be to make the world poorer without obviously making American workers much richer.

For the record, I don't know yet whether TPP is a good deal. I haven't seen final text, much less had a chance to run it by experts. Both sides are mostly arguing the big picture around trade, intellectual property, and the like, but trade deals are heavily about details. And we just don't know all the details yet.

On this, I agree with Brad DeLong, who writes, "It is foolish to debate whether a trade agreement that has not yet been negotiated is a good idea and should be ratified. Such a debate should properly begin only once there is something to analyze." That said, DeLong goes on to explain why he supports the basic outlines of the TPP, so I'll make a few broad points, as well.

I'm skeptical of the sheer size of modern trade deals and the opaque process that creates them. The negotiation process isn't quite as secretive as some think — the congressional briefings are constant, and the advisory committees are sprawling — but it is insanely complex.

The result is that even where there is transparency, it's a form of transparency that can only really be navigated by politically sophisticated, highly motivated actors — which is to say it's a form of transparency that quickly becomes a venue for lobbying. That's one reason these deals end up including so much ... stuff. The process is constructed in such a way that the negotiators get a lot of special pleading from individual industries and interests. Responding to those requests feels like responding to the public, but it isn't, and it leads to deals jam-packed with individual provisions that look a lot like giveaways.

But I also think the context of a trade deal like TPP is very different from the context of a trade deal like NAFTA. David Autor, an economist who has done some of the seminal work on the way trade has harmed America's middle class, coauthored a piece in the Washington Post that makes the point well: the costs of trade have come in America's manufacturing sector, and those jobs aren't coming back. What's more salient for the American economy is labor and environmental standards elsewhere, IP protections (which I very much worry will be taken too far), customs and border questions, etc. There are real gains to America to getting these rules right.

Another way to put this is the global trade regime is oriented toward physical industries America has lost, rather than information industries where America leads. TPP could, in its best form, help level that playing field a bit (though only a bit — both the costs and benefits of trade deals tend to be overstated). But the only way to know that will be to read the final text.

Further reading

— Vox's TPP explainer.

— Paul Krugman's TPP slides.

— The official outline of the deal, as published by the US Trade Representative's office.

— The AFL-CIO's web site arguing against the deal.

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