Hillary Clinton, the Democratic candidate for president, could well be losing had she not switched her position on the massive proposed trade deal with Pacific Rim nations known as the Trans-Pacific Partnership, or TPP.
Clinton, who once called the pact the “gold standard” in trade agreements, reversed her position in October 2015 in what was likely the most important flip-flop of her long career of finger-in-the-wind political posturing.
“Any politician who wants to get elected must oppose [free trade agreements] or feign opposition to them … The American people oppose the globalist deals across the board.”
Her adjustment of position, which critics including GOP nominee Donald Trump contend is likely temporary, stopped her campaign’s bleeding support to Vermont Sen. Bernie Sanders during the Democratic primary cycle and dulled a key component of Trump’s contrasting message on the economy in the general election.
Clinton would be following in the footsteps of President Obama to promise action against bad trade deals on the campaign trail, only to change course once in office.
Then-Sen. Barack Obama said in 2008 that, if elected to the White House, he would renegotiate the North American Free Trade Agreement, or NAFTA. NAFTA is the trilateral free-trade agreement signed by President Bill Clinton in 1993, forged with Canada, Mexico, and the United States.
Labor unions have been highly critical of NAFTA — and Obama heard their pleas in 2008. While Obama was campaigning against NAFTA in a bid to win organized labor support from Clinton in the pair’s hotly contested primary battle, Obama’s top economic adviser, Austan Goolsbee, was telling Canadian officials that Obama’s words on NAFTA were simply “political positioning.”
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Goolsbee reportedly made the remarks at the Canadian consulate in Chicago, according to the Associated Press.
One conservative-leaning economic analyst believes Hillary Clinton is doing the same thing.
“Hillary Clinton is repeating the act,” said Curtis Ellis, executive director of the American Jobs Alliance, an independent nonprofit organization promoting U.S. jobs and “Buy American” policies. The reason is a simple political calculation.
“Any politician who wants to get elected must oppose [free trade agreements] or feign opposition to them,” said Ellis. “The American people oppose the globalist deals across the board — across all political persuasions.”
A recent Pew study backs that up. The survey found 80 percent of Americans believe outsourcing jobs to foreign companies hurts U.S. workers.
For Clinton, the flip-flop was especially difficult, a contortion usually not seen outside of circuses.
Clinton, while secretary of state under President Obama from 2009 to 2013, actively promoted TPP. Clinton called TPP the “gold standard” of such agreements while speaking in Adelaide, Australia, on Nov. 15, 2012.
“This TPP sets the gold standard in trade agreements to open free, transparent, fair trade, the kind of environment that has the rule of law and a level playing field,” Clinton told the Australian audience. “And when negotiated, this agreement will cover 40 percent of the world’s total trade and build in strong protections for workers and the environment.”
TPP will cover Australia, the United States, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
In 2014, Clinton began laying the ground work to alter her public position in her book, “Hard Choices.”
“Because TPP negotiations are still ongoing, it makes sense to reserve judgment until we can evaluate the final proposed agreement,” she wrote.
It’s basically the line she used throughout the Democratic primary in 2016 to beat back Sanders.
“Had she stood her ground on TPP, there’s an excellent chance she would have been defeated by Sanders,” said Alan Tonelson, founder of RealityChek blog and an economic policy analyst. “[The AFL-CIO] might have withheld their endorsement of her, and that would have been extremely damaging.”
Now, Clinton is still expressing doubts about TPP while she debates Trump, who is a skeptic of all free trade deals.
But Trump is the one who has consistently held the belief that people like Tonelson share: Trade deficits caused by bad trade deals slow U.S. growth.
Tonelson points to America’s consistently poor economic growth since the recession ended as proof the trade deficits America runs are slowing normal economic progress.
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, recently announced that the goods and services deficit was $40.7 billion in August, up $1.2 billion from $39.5 billion in July.
The trade deficit was $746 billion in 2015, according to the Census Bureau. TPP would accelerate deficits and slow growth further, says Tonelson.
An example of the damage that bad free trade agreements can do is the one signed with South Korea in 2012, says Tonelson. The agreement has led to large deficits with South Korea and cost jobs.
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The Economic Policy Institute, a liberal think tank, said Obama promised the Korean deal would add 70,000 jobs. Instead, EPI admits the deal instead led to the loss of 95,000 American jobs.
“The first four years after [the U.S.-Korean trade deal] took effect, there was absolutely no growth in total U.S. exports to Korea,” EPI reported. “Imports from Korea increased $15.2 billion, an increase of 26.8 percent. As a result, the U.S. trade deficit with Korea increased $15.1 billion between 2011 and 2015, an increase of 114.6 percent, more than doubling in just four years.”
Tonelson said the reason for bad deals, especially with Asian nations, is simple: The bureaucracies there are large and complex, and American officials do not understand them.
The Asian officials also use the bureaucracies to keep their side of the deal going, while hiding violations that harm American exports, said Tonelson.
Clinton probably knows all this. But for now, she is playing along. If elected, Clinton’s signature will likely be on TPP sooner or later.
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