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Zero Hedge reports
[May 12], in an embarrassing setback for the president, Senate Democrats in a 52-45 vote--short of the required 60 supporters--blocked a bill that would give President Barack Obama fast-track authority to expedite trade agreements through Congress, a major defeat for Obama and his allies who "say the measure is necessary to complete a 12-nation Pacific trade deal that is a centerpiece of the administration's economic agenda."
The passage failed after a leading pro-trade Democrat said he would oppose the bill: Ron Wyden, the top Democrat on the Senate Finance Committee, said he would vote no and his loss was a major blow to hopes of attracting a sufficient number Democrats to get 60 "yes" votes in the chamber.
According to Reuters, the Senate vote was one of a series of obstacles to be overcome that hinged on the support of a handful of Democrats. The White House has launched a campaign blitz directed at them in support of granting the president authority to speed trade deals through Congress.
Fast-track legislation gives lawmakers the right to set negotiating objectives but restricts them to a yes-or-no vote on trade deals such as the TPP, a potential legacy-defining achievement for Obama.
[...]Why is Obama scrambling to ram the TPP bill through Congress as fast as possible?
[...]This enormous new treaty would tilt the playing field in the United States further in favor of big multinational corporations. Worse, it would undermine U.S. sovereignty.
[Investor-State Dispute Settlement (ISDS)] would allow foreign companies to challenge U.S. laws--and potentially to pick up huge payouts from taxpayers--without ever stepping foot in a U.S. court. Here's how it would work:
Imagine that the United States bans a toxic chemical that is often added to gasoline because of its health and environmental consequences. If a foreign company that makes the toxic chemical opposes the law, it would normally have to challenge it in a U.S. court. But with ISDS, the company could skip the U.S. courts and go before an international panel of arbitrators [read: corporate-friendly tribunal]. If the company won, the ruling couldn't be challenged in U.S. courts, and the arbitration panel could require American taxpayers to cough up millions--and even billions--of dollars in damages.
(Score: 1) by khallow on Thursday May 14 2015, @12:26AM
This comic identifies some potentially problematic elements with the theory that underlies reducing trade barriers.
Interesting how someone can put so much effort into terrible arguments. For example, he claims that balance of trade doesn't work because China prints more yuan. But most of the world's resources aren't valued in yuan. When you inflate a currency, prices go up. Chinese goods are cheap now despite the decades of trade deficits because they have significantly improved their efficiencies of making and delivering things for export not because of Chinese government monetary policy. Meanwhile the US just has been throwing more and more obstacles in front of its employers.
(Score: 2) by PartTimeZombie on Thursday May 14 2015, @04:25AM
No, he's right and you're wrong.
Chinese monetary policy is exactly why Chinese exports are still cheap. Also the US government tries to lean on the Chinese to get them to re-value their currency to make US goods more competitive.
The Chinese tell them to shove it. (But politely, because diplomacy).
(Score: 1) by khallow on Thursday May 14 2015, @03:45PM
Chinese monetary policy is exactly why Chinese exports are still cheap.
No, cheap Chinese industry along with cheap shipping infrastructure are why Chinese exports are cheap. I find it typically delusional that one can ignore the efficiency of the largest industrial power in the world and just say without a shred of evidence that it is just monetary policy.
Also the US government tries to lean on the Chinese to get them to re-value their currency to make US goods more competitive.
Which is one of the dumber foreign policy things the US does.
(Score: 2) by PartTimeZombie on Friday May 15 2015, @01:41AM
(Score: 1) by khallow on Friday May 15 2015, @03:37AM
It really doesn't matter how "efficient" your manufacturing is if you're paying all your costs in an overvalued currency.
Because the numerical value of a cost will never go up with an overvalued currency? For an obvious counterexample, Chinese wages have gone up even adjusting for the inflation of the Yuan and Renminbli currencies.
(Score: 0) by Anonymous Coward on Thursday May 14 2015, @08:24AM
Wrong. When you print up your local money, your money goes down relative to other currencies, but your cost is based on local currency, so your exported goods are cheaper to the importing country. That's why all these countries muck with currency manipulation.
(Score: 1) by khallow on Friday May 15 2015, @12:18AM
but your cost is based on local currency
Here's where the argument breaks down. It's not. Cost is based on the cost of the things that go into the good or service, such as labor, materials, etc. They are traded in terms of the inflating currency, but the price of them go up when the currency inflates.
That's why all these countries muck with currency manipulation.
Rather the problem is that considerable currency deflation results in investment decisions like money hoarding that are undesirable for any agents who want to maximize economic activity.