Shadow Government

U.S. Political Dysfunction and the Trans-Pacific Partnership Trade Agreement

As the bell rings, signaling the end of the current round of Washington scuffling over the debt ceiling, and as the participants return to their respective corners, we can take a moment to assess the damage. There is plenty, but we can focus on the question of what the last few weeks meant for the Obama administration's effort to conclude a Trans-Pacific Partnership (TPP) trade agreement.

The current incarnation of TPP talks dates back to late 2008; these have been going on a while. The 12 countries now participating have set themselves a notional goal of wrapping things up this year.

The Financial Times concludes that the recent budget standoff took a toll, when President Barack Obama decided to skip the APEC leaders' gathering. It quotes the director of research at the Asian Development Bank Institute as saying, "Obama not coming here means that the TPP probably didn't get the big push it was to get." Instead, the Financial Times story describes how China used the occasion to advance its alternative trade vision -- the Regional Comprehensive Economic Partnership -- which just so happens to exclude the United States (as the TPP excludes China).

There are plenty of reasons to worry about the TPP's prospects, and the budget debacle in Washington likely made things worse. But the main problem was not Obama's absence from the Asian gatherings, nor China's chance to peddle its wares. Had the president used the government downtime to find common ground with Republicans and repair a broken relationship, the TPP's prospects would likely have improved. Had there been a grand bargain on budget matters, as some participants sought, Congress could have moved on to other matters, such as granting the president negotiating authority for the TPP and the agreement with Europe (the TTIP - another casualty of government-shutdown theater).

Instead, the president seemed determined to vanquish his off-balance Republican opponents. The putative deal that emerged from the Senate only provides a few months' respite, guaranteeing that Congress will return to fight over the issue another day.

This matters for the TPP (and TTIP) because it will be virtually impossible for the president to conclude these deals successfully without cooperation from congressional Republicans. As I noted in the wake of our early-fall foreign-policy crisis (over Syria), Congress has the ultimate say over trade policy. With Republicans in the majority in the House, the TPP would need their support to pass.

An optimist might counter that this is hardly a serious concern. Are Republicans really going to vote down a concluded agreement just to spite Obama? The threat hardly seems credible. And that would be right -- if the president already had trade negotiating authority. It is that authority which would give him his negotiating instructions and let him put a completed agreement before Congress for an up-down vote. But he doesn't have any such authority. The last version of trade promotion authority (TPA) expired in 2007. There have been attempts since to revive it, notably in 2011, but the White House didn't back the effort and Senate Democrats blocked it.

The road to successful trade agreements runs through TPA. To get TPA, there has to be agreement on what subjects trade pacts ought to cover. This is not just haggling about tariffs; it involves trickier domestic policy issues such as labor standards, environmental measures, intellectual property rights protection, and regulatory practices. There is substantial opposition to the current approach to trade among House Democrats, represented by the House Trade Working Group. The veteran trade skeptics on the left have recently been joined by a smaller group of novice trade skeptics on the right, who voice concerns about the delegation of congressional power to the executive.

One can still imagine a successful coalition in the House that could back TPA, but it would likely involve Obama working hand in hand with Republican leaders to craft a bill that would embrace Republican principles, enjoy majority Republican support, and win over a minority of internationalist Democrats. At this point, such cooperation seems fanciful. Even if the president could fracture the House Republican caucus and get a group to endorse the principles of the Democratic skeptics, the outcome would likely be unpalatable to the country's TPP trading partners.

The TPP is yet another illustration of the analytical value of political scientist Robert Putnam's idea of two-level games. Those lamenting Obama's absence from recent Asian summitry implicitly give greater weight to the international negotiations as an obstacle. At this point, domestic obstacles may loom larger.

Astute TPP partners will be less worried about the president's decision not to mill about in a colorful shirt and more worried about the implications of the recent fight for comity up and down Pennsylvania Avenue. The president showed not that he could work hand in hand with congressional leaders, but that he could deliver a sharp uppercut. Progress on trade will likely have to await the conclusion of the budget fight, Round 2.

Photo: STR/AFP/Getty Images

Shadow Government

Is the U.S. Ready for a Venezuelan Meltdown?

As Republicans and Democrats continue their standoff in Washington, developments overseas directly affecting U.S. security interests continue apace. Think of multiple boulders tumbling down a hill. Let's just hope a distracted Uncle Sam isn't clobbered by one of them.

In Venezuela, the United States' fourth-largest supplier of crude oil and 14th-largest trading partner, conditions are spiraling from bad to worse. The late Hugo Chávez's hapless successor, President Nicolás Maduro, has requested emergency decree powers, which he says are needed to save an economy in free-fall -- including an inflation rate among the world's highest, collapsing public services, and shortages of basic goods such as milk, meat, and toilet paper. This, in a country sitting atop perhaps the largest reserves of crude oil on the globe.

Until now, Maduro has become little more than a laughingstock since claiming a suspicious victory over challenger Henrique Capriles in the April election following Chávez's death. Obsessed with blaming others for Venezuela's travails, he has announced some 13 (and counting) conspiracies against his government, plus four assassination "plots." That strategy has run its course, however; the time for fun and games is clearly over.

Not even reported annual oil revenues of $100 billion has been enough to paper over an inflation rate of 49 percent, a scarcity index of 20 percent, the dollar trading on the black market at seven times the official rate, wanton corruption, electrical blackouts, and horrendous street crime. 

The situation is simply not sustainable -- and Maduro has neither solutions nor much room to maneuver. His Cuban minders are insisting that he not only hold the line, but that he double down on command economy policies. 

Yet the key dynamic in Venezuela today is not between the government and the opposition, but within the regime itself. That's because there is no shortage of powerful figures in the government who continue to proudly identify with Chávez's movement, but who clearly recognize that the country is disintegrating and that Maduro's incompetence is making matters worse. Many of them as well, especially in the military, have always resented the heavy Cuban presence at the top echelons of civilian decision-making. It will fall to these forces to pick up the pieces when Maduro's mismanagement finally overwhelms him.

Barack Obama's administration cannot be caught flat-footed in the event of a change in leadership in Venezuela. The State Department spent the last six months doing everything it could to normalize relations with the Maduro government, but the recent expulsion of the U.S. chargé d'affaires (the ambassador was expelled long ago) has brought that effort to an ignominious end. Now, they need quite a different plan, one that seeks to help guide a peaceful transition to a post-Maduro government less hostile to the United States. If one thing is certain, Russia, China, Iran, and Cuba -- all heavily vested in the regime's radical wing -- are not about to stand idly by and let events play out.

Of course, there is always a chance that Maduro can muddle through (oil is an excellent lubricant), but that is a risky bet. A key date ahead is Dec. 8, when Venezuela is supposed to hold municipal elections. Many see those elections as a referendum on Maduro's presidency. If the ruling party does well, it may buy Maduro time. If not, hold on tight.

A Venezuelan transition will provide significant opportunities for a welcome course correction in bolstering U.S. security interests in the region. Numerous bad actors believe they hit the mother lode in chavismo and have profited immensely, at the expense of the U.S. interests. Either way, if a post-Maduro government is interested in a less toxic relationship with Washington or not, the United States will have new leverage. U.S. interests lie in nothing less than the expulsion of the Cubans, the Iranians, and the drug cartels from Venezuela. If a new leadership in Venezuela seeks a future sans such nefarious associations, the Venezuelan people and their historical friends in the United States stand to benefit.

Photo: LEO RAMIREZ/AFP/Getty Images