The Economist: Obama’s unwillingness to fight for trade is going to make everybody $600 billion poorer

posted at 12:51 pm on February 24, 2014 by Erika Johnsen

Administration officials are still claiming that President Obama hasn’t given up on the fight for fast-track trade promotion authority (the better to complete a couple of major trade deal with Pacific countries and the European Union), despite Democrats’ general reluctance to engage on the issue and Harry Reid’s insistence that he won’t even entertain the notion during this politically sensitive pre-midterm period, but… Obama isn’t exactly pushing it, either. One of Democrats’ big arguments against the idea of setting the United States up for freer trade is that none of the deals on the table would really do that much to help out our economy anyway, so there’s no use getting so upset over the whole thing — but The Economist offers up some solid numbers to explode that myth, as well as some apt criticism of Obama’s pusillanimity to boot:

If not championed by leaders who understand its broad benefits, it will constantly be eroded by narrow economic nationalism. Mr Obama now appears to be surrendering to protectionists within his own party. If he cannot drag Democrats back to their senses, the world will lose its best opportunity in two decades for a burst of liberalisation. …

In fact, the deals on the table are big. Reasonable estimates say that the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP) could boost the world’s annual output by $600 billion—equivalent to adding another Saudi Arabia. Some $200 billion of that would accrue to America. And the actual gains could be even larger. The agreements would clear the way for freer trade in services, which account for most of rich countries’ GDP but only a small share of trade. Opening up trade in services could help reduce the cost of everything from shipping to banking, education and health care. Exposing professional occupations to the same global competition that factory workers have faced for decades could even strike a blow against the income inequality that Mr Obama so often decries.

Tactically, even a short delay could prove fatal to both deals. Pacific negotiations have been extended while America and Japan hammer out compromises on agriculture. Why should Japanese politicians risk infuriating their farmers when any agreement can be torn up on Capitol Hill? The deal with the EU was meant to be done swiftly—perhaps in as little as two years—to keep politics from mucking it up. Europe’s leaders will now doubt America’s commitment, given how feebly Mr Obama has fought for fast-track.

Maybe Democrats will be more willing to take up the issue agenda after the midterms, but it’s not like their pro-labor/protectionist politics are ever going away unless they decide to actually do something about it — and as The Economist notes, delay means some serious opportunity costs for all of the parties involved here. Man, if only those stubborn Democrats would stop obstructing President Obama’s economic agenda!


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Dog Eater is simply utilizing the deep knowledge of economics he has accrued during his long experience in the field, why do you homophobes hate knowledge?

Bishop on February 24, 2014 at 12:58 PM

“If not championed by leaders who understand” ……. no need to read any further. Obama understands one thing. POWER… His power and expanding where ever possible.

roflmmfao

donabernathy on February 24, 2014 at 12:58 PM

I still have a 2008 copy of The Economist with Barky’s picture on it and the caption “It’s Time.”

No, it wasn’t and it never will be, but thanks for kinda sorta noticing the destruction he’s visited on the entire planet with his galactic incompetence.

Maddie on February 24, 2014 at 12:59 PM

I thought that was global warming. It’s hard to keep these things straight.

Fenris on February 24, 2014 at 12:59 PM

Dog Eater is simply utilizing the deep knowledge of economics he has accrued during his long experience in the field, why do you homophobes hate knowledge?

Bishop on February 24, 2014 at 12:58 PM

Bingo!

Which is why poster verb is a F*king genius in these parts…

ToddPA on February 24, 2014 at 1:01 PM

Hopey is too busy Domesicating:
==================================

Mark Knoller ‏@markknoller 57m

WH says the projects combine Government and private-sector funding to boost manufacturing and attract high-quality jobs to those areas.
Expand

Reply
Retweet
Favorite

Mark Knoller ‏@markknoller 59m

The consortium in Detroit will focus on metals manufacturing; the one in Chicago on digital manufacturing and design technologies.
Expand

Reply
Retweet
Favorite

Mark Knoller ‏@markknoller 1h

Tomorrow at the WH, Pres Obama announces another two Manufacturing Innovation Institutes to promote gob growth in Detroit & Chicago areas.

canopfor on February 24, 2014 at 1:05 PM

Worried that his last bashing of support, unions, would turn on him.

Tater Salad on February 24, 2014 at 1:05 PM

MeanWhile,…the can kicking down the months road sumpins:

Mark Knoller ‏@markknoller 4m

Governors report Pres Obama said he anticipates a decision on whether to build the Keystone Pipeline “in a couple of months.”

canopfor on February 24, 2014 at 1:06 PM

Damn autocorrect, “bastion”.

Tater Salad on February 24, 2014 at 1:06 PM

Keystone pipeline debate
2m
Report: Obama tells governors during closed-door meeting that he plans to make Keystone decision in next couple of months, @ABC reports – @jeffzeleny
see original on twitter.com

canopfor on February 24, 2014 at 1:06 PM

Our economy is so hot right now that if it got any better we’d have a melt down.

gwelf on February 24, 2014 at 1:07 PM

Rgeyll still blame the GOP

cmsinaz on February 24, 2014 at 1:07 PM

MISSION ACCOMPLISHED!

Murphy9 on February 24, 2014 at 1:08 PM

The Economist: Obama’s unwillingness to fight for trade is going to make everybody $600 billion poorer

… as if Barky would care. The moron can’t really comprehend any numbers over 20. “But, he was Precedent of the Hah-vahd Lawn Review!!!!!!”

ThePrimordialOrderedPair on February 24, 2014 at 1:08 PM

Did somebody say pusillanimity

Privatize It on February 24, 2014 at 1:11 PM

Next couple of months Canopfor?

Sheesh

cmsinaz on February 24, 2014 at 1:13 PM

It’s quite simple, really.

If you presume that Obama’s actions will be precisely the opposite of that which is in the country’s best interest, you can precisely guess what he’s going to do.

Midas on February 24, 2014 at 1:15 PM

MISSION ACCOMPLISHED!

Murphy9 on February 24, 2014 at 1:08 PM

Very true. Except for the well connected among the 1%ers the goal is to make us ALL poor.

Equal misery for all!! Well, almost all, the usual suspects excluded.

hawkeye54 on February 24, 2014 at 1:16 PM

Dog Eater is simply utilizing the deep knowledge of economics he has accrued during his long experience in the field, why do you homophobes hate knowledge?

Bishop on February 24, 2014 at 12:58 PM

Wow! Bishop “Bishoped”

I’ll never forget the precious look on Christina Romer’s face when it finally dawned on her that the economic crap she had been teaching for decades at Berkeley really doesn’t work in real life. It was like watching primative man discover fire for the first time.

Happy Nomad on February 24, 2014 at 1:16 PM

Opening up trade in services could help reduce the cost of everything from shipping to banking, education and health care. Exposing professional occupations to the same global competition that factory workers have faced for decades could even strike a blow against the income inequality that Mr Obama so often decries.

Not sure how much the shipping people have contributed to the current administration, but the banking, education camps have mightily. These groups are all for the manufacturing group facing real competition. Themselves, not so much.

As to the last part, “so often decries”, we’ll just add that to the Words, Just Words speech of Mr. Obama’s from 2008. Words, just more words — like “like you doctor, like your plan”, redlines…yada, yada

CPRforAmerica on February 24, 2014 at 1:21 PM

$200 billion here.

$200 billion there.

Pretty soon, you’re talking about Obamacare money…

JohnGalt23 on February 24, 2014 at 1:26 PM

Rick Perry
1m
Texas Gov. Rick Perry after meeting with Obama at White House: ‘I was a bit troubled today by the tone of the president’ – @Chris_Moody

https://twitter.com/Chris_Moody

canopfor on February 24, 2014 at 1:28 PM

Everything will be fine if in bump the minimum wage to $10.10. And ban coal and oil. And bow down to mullahs, and kiss Putin’s butt, and give England, Germany, and Italy the finger.

peski on February 24, 2014 at 1:29 PM

King Barky the Incompetent and his magical fecal touch. It is on purpose, America deserves this because….RACISM!!!

jukin3 on February 24, 2014 at 1:33 PM

I’ll never forget the precious look on Christina Romer’s face when it finally dawned on her that the economic crap she had been teaching for decades at Berkeley really doesn’t work in real life. It was like watching primative man discover fire for the first time.

Happy Nomad on February 24, 2014 at 1:16 PM

The awakening to reality is quite something…when it finally happens.

Unfortunately it happens far too rarely. Most of the time, the ‘true-believers’ insist that doing it more aggressively is all that is needed to make the intellectual, moral, fiscal, and ethical bankruptcy of their ideology ‘work’.

Needless to say, not only is the Administration’s (and Harry Reid’s) fecklessness regarding trade an economic failure, but also a foreign policy one as they are antagonizing our friends and allies with their unwillingness to actually complete these deals.

Athos on February 24, 2014 at 1:34 PM

As a Canadian i have to say Obama is driving us nuts.

Pegcity on February 24, 2014 at 1:36 PM

As a Canadian i have to say Obama is driving us nuts.

Pegcity on February 24, 2014 at 1:36 PM

Pegcity:

Welcome aboard,..the Canadian Tea Cafe’ is
on the second deck,..adjacent to “The Bishop”
Troll Bishing Shrine!!-:0

canopfor on February 24, 2014 at 1:38 PM

A note of caution…

http://www.heritage.org/research/reports/2013/12/transatlantic-trade-and-investment-partnership-ttip-pitfalls-and-promises

EU Statements and Recent Precedents Give Reasons for Caution

Though the EU is sometimes described as a European free trade area, it is in reality a pan-European managed market. The EU does not work by mutual recognition of different national standards; rather, it imposes standards from Brussels. The EU is a bitter opponent of any form of regulatory competition. For example, it defines “an effective level of taxation which is significantly lower than the general level of taxation” as “harmful tax competition.”[6] In the EU, lower taxes are viewed as a form of cheating.

It is therefore disturbing to note that EU Trade Commissioner Karel De Gucht describes TTIP as similar to Europe’s “early preparations during the 1980s for a Single Market” and anticipates that the U.S. and the EU will “use such a transformative process [as TTIP] to raise their game.”[7] He forthrightly hopes that TTIP would lead to “more convergence between EU and US standards…[and] reconciling their inconsistencies.”[8] De Gucht praises “mutual recognition,” but what he is describing is, in fact, harmonization. Similarly, a leaked EU assessment of its trade negotiations with Canada notes that issues related to “environmental and labour standards” will likely be resolved along the “EU approach.”[9]

sharrukin on February 24, 2014 at 1:39 PM

Again and again I default to Ann Coulters question….what would Obama be doing differently if he actually did want to destroy America…….?????….hmmmmm…..I got nothing…..

Caseoftheblues on February 24, 2014 at 1:41 PM

I’m with Obama on this one. The last thing the US needs right now is another managed free trade deal.

I like what Michael Lewis had to say about the The Economist. Your view of the magazine changes after you realize that most of its writers are pimply-faced twenty-year-old-something boys.

Pincher Martin on February 24, 2014 at 1:41 PM

Crossposted to Erica and AP both:

You don’t seem to be proud of our first black President. I can’t help but think you’re racist.

LashRambo on February 24, 2014 at 1:42 PM

As a Canadian i have to say Obama is driving us nuts.

Pegcity on February 24, 2014 at 1:36 PM

Just some payback for all that frigid air you people have pushed our way this winter. If you think Obama drives you nuts, try entertaining a feral pack of small children after multiple days of closed schools. ;0

Happy Nomad on February 24, 2014 at 1:59 PM

Just last week House democrats were blaming the republicans letting unemployment benefits expire at the end of 2013 to cost the economy $3 billion. Somehow I doubt they’ll care about this.

supernova on February 24, 2014 at 2:03 PM

is therefore disturbing to note that EU Trade Commissioner Karel De Gucht describes TTIP as similar to Europe’s “early preparations during the 1980s for a Single Market” and anticipates that the U.S. and the EU will “use such a transformative process [as TTIP] to raise their game.”[7] He forthrightly hopes that TTIP would lead to “more convergence between EU and US standards…[and] reconciling their inconsistencies.”[8] De Gucht praises “mutual recognition,” but what he is describing is, in fact, harmonization. Similarly, a leaked EU assessment of its trade negotiations with Canada notes that issues related to “environmental and labour standards” will likely be resolved along the “EU approach.”[9]
sharrukin on February 24, 2014 at 1:39 PM

Spot on. Beware of what the EU defines as” standards”. Taxes have been a sticking point with France leading the way to force other countries to raise their taxes to “harmonize” the cost of goods and services. This has been going on for 20 years. To wit, Ireland started out with corporations wildly eager to invest due to low taxes in the 90s. France and Germany cried foul. Ireland raised taxes and investments withered.

In a way, the progressives here would like this scheme to force us to cough up more $$ but methinks the only thing holding them back is our sucking economy. Watch for them to do it whenever things get better.

AH_C on February 24, 2014 at 2:12 PM

Donkeys are to free trade of goods what Republicans are to free trade of labor.

Open the border to goods and labor. Let freedom ring!

MJBrutus on February 24, 2014 at 2:14 PM

In a way, the progressives here would like this scheme to force us to cough up more $$ but methinks the only thing holding them back is our sucking economy. Watch for them to do it whenever things get better.

AH_C on February 24, 2014 at 2:12 PM

The leftists aren’t getting what they want from the legislative assemblies so they attempt an end run around by treaty obligations and extra-national entities.

sharrukin on February 24, 2014 at 2:16 PM

Mr. Obama doesn’t understand economics, so this doesn’t interest him. He’s busy working on the fundamental transformation, whatever that means.

oldennis on February 24, 2014 at 2:24 PM

What does Obama know about economics or trade? What in his background in any way, point to him having any knowledge, any more than any person on the street, about trade.

He never spent any time in the Senate, never took any real economics courses, or at least any more than any other college student. He too law classes, and didn’t even muster enough to become an attorney.

The man is absolutely clueless about trade, absolutely clueless about negotiations, he is one heck of a campaigner and uses his “status” better than anyone has ever used it before…but as far as getting anything done, especially economics, we have never had a bigger failure.

right2bright on February 24, 2014 at 2:27 PM

Wow, I am impressed. Usually the Economist doesn’t write anything about Economics just Socialism.

She Walks In Beauty on February 24, 2014 at 2:31 PM

The TPP (Trans Pacific Partnership) is just SOPA and PIPA in an uglier form. I hate Harry Reid, but not allowing the TPP to get anywhere near becoming law is a good thing.

Eagles409 on February 24, 2014 at 2:58 PM

This article assumes that Obama wants economic prosperity in this country.

Techster64 on February 24, 2014 at 3:01 PM

Ummm, have we been working under the assumption that he was NOT trying to bankrupt America?

WryTrvllr on February 24, 2014 at 3:12 PM

This article assumes that Obama wants economic prosperity in this country.

Techster64 on February 24, 2014 at 3:01 PM

oops. sorry

WryTrvllr on February 24, 2014 at 3:13 PM

Barry doesn’t do construction, he’s a demolition man.

steveracer on February 24, 2014 at 3:13 PM

Obama’s unwillingness to fight for trade is going to make everybody $600 billion poorer

And another goal by the encroaching socialist octopus is reached….

Don L on February 24, 2014 at 3:32 PM

Free trade isn’t an unfettered good. There are, as in everything in life, tradeoffs and winners/losers. I’m not terribly interested myself in any major free trade pacts right now. The biggest thing we can do for our economy is to get the DOMESTIC regulatory regime off of the back of business.

xNavigator on February 24, 2014 at 4:00 PM

As a Canadian i have to say Obama is driving us nuts.

Pegcity on February 24, 2014 at 1:36 PM

Aaaay?

slickwillie2001 on February 24, 2014 at 4:14 PM

Wait…??? “Fight?” Our President? President Obama?

This writer needs medical attention and a dose or reality.

The President has an absolute block on admitting when he isn’t the smartest guy in the room…and on the economy and crating jobs he has proven himself clueless. And when he is clueless he hides it by concentrating on other things…talking about other things. So…of course…those don’t get done either, but he tries to keep all of us thinking about those other things.

IF…and no bigger “if” has ever been invoked in this world…he could admit he needed input and help (for something other than to take blame)maybe we could have recovered from this camouflaged recession that still trickles on after almost 6 years. But that is never going to happen. Someone very wise once told me that learning stops and wisdom goes on Holiday when a person stops listening…and President Obama has rarely stopped talking. And his eyes glaze over when someone else is speaking…a sure sign he is not listening.

Obama “fighting”…as likely as Baldwin getting a “plays well with others” award…

TKPedersen42 on February 25, 2014 at 11:07 AM