Progressives, libertarians serve notice on their parties

Opinion: May 21, 2015 at 12:00a.m.

By Rekha Basu

Des Moines Register

Every presidential election cycle, the tension between moderate and evangelical conservative voters in the Republican Party becomes the subject of hand-wringing speculation: Could a moderate seeking the Republican nomination win in an early voting state like Iowa, where evangelicals dominate? Could an evangelical candidate win the general election? Now a growing libertarian wing is further fragmenting Republican votes.

But the real story shaping up this election cycle is from the other party, where an increasingly vocal left wing is demanding Democratic standard-bearers take action against economic inequality, the distorting role of money in politics and diminishing worker clout. That faction found its voice last week when enough Democratic senators rejected a move to give “fast track” authority to the president to negotiate foreign trade deals that the measure failed. President Barack Obama wants the authority to move forward a Trans Pacific Partnership with 11 other countries, including Japan, Vietnam, Canada and Mexico. Fast-track authority would allow him and future presidents to negotiate trade deals that Congress could only approve or disapprove, but could not amend. Obama says the TPP would open up foreign markets to U.S. goods and services. The Washington Post says it could affect 40 percent of U.S. trade. Senate Republicans mostly sided with him.

American jobs

But some Democrats who oppose the deal sided with labor unions in worrying about its impact on American jobs. Sen. Elizabeth Warren, D-Mass., has emerged as a major critic of the trade measure, warning it could ultimately lead to deregulation of banks, which became subject to tighter rules with the 2010 Dodd-Frank Act. Obama has bristled at those suggestions, saying he wouldn’t jeopardize a law that he pushed for and signed. But Warren worries that a future Republican administration would cut trade deals that override provisions.

The trade issue seems to have become a catalyst for disaffected Democrats to coalesce around. After the bill was blocked, some members of Congress used the occasion to join labor leaders, activists and New York City Mayor Bill de Blasio outside the Capitol to celebrate and introduce a 13-point Progressive Agenda to Combat Income Inequality. Democrats want provisions attached to the TPP, including Trade Adjustment Assistance, to provide financial assistance to workers who lost their jobs because of trade agreements. They also want a provision to penalize countries that artificially deflate their currencies to enhance the appeal of their exports.

But Warren has said her biggest cause for concern was in a draft agreement that hadn’t yet been made public. It’s a provision called Investor-State Dispute Settlement, which would allow foreign companies – typically giant corporate investors – to circumvent the court system to challenge U.S. laws intended to protect the environment or workers, for example. Rulings would be made by international panels of arbitrators who are corporate lawyers. And U.S. taxpayers could be on the hook for damages for undermining those companies’ business prospects. In a hypothetical example Warren offered in a Washington Post opinion piece, she imagined the U.S. banning a toxic gasoline additive and being challenged by the company that makes it. If the panel ruled against the U.S. law, the government could be fined millions or billions of dollars in damages and could not appeal to the courts. Another example imagines a Vietnamese company challenging an increase in the U.S. minimum wage. Yet on the other side, a U.S. labor union would not have an equal right to challenge Vietnam in its courts for allowing its companies to pay “slave wages” in violation of trade agreements.

These examples are not so far-fetched when you consider the laws of various countries that have already been challenged. A minimum wage increase in Egypt was challenged by a French company. Germany’s decision to phase out nuclear power was challenged by a Swedish company. And the Czech Republic was sued by a Dutch company for the government’s refusal to bail out a bank owned partly by that Dutch company. American tobacco giant Philip Morris has used ISDS to try to stop Uruguay from implementing new regulations on tobacco.

‘Special interests’

Senate Minority Leader Mitch McConnell accused Democrats who oppose the deal of siding with “special interests” – labor unions. Maybe they are, but since the other special interests - corporations – would have disproportionate seats at the table under ISDS, someone needs to represent labor interests.

These insurgent Democrats are serving an important role. The trade measure is likely to be reintroduced after some lobbying efforts in Congress. It’s essential that all possible ramifications be explored in the open. With the entry of Vermont Sen. Bernie Sanders, the only self-described socialist in Congress, into the presidential race, such issues are likely to get a fuller hearing in presidential debates as well. In recent elections, Democratic candidates Obama, John Edwards, Howard Dean and Dennis Kucinich have offered pointed critiques of the wars in Iraq and Afghanistan, and the dissolution of American civil liberties. But we have heard less debate on the economic bread-and-butter issues that cut to the heart and soul of the party.

Rekha Basu is a columnist for the Des Moines Register. Distributed by Tribune Content Agency, LLC.