Tuesday, November 16, 2010

Did Congressional Pressure, not White House Incompetence/Politics, Really Derail the KORUS?

As the international trade community desperately seeks to explain last week's utterly unbelievable KORUS debacle, one of the many conspiracy theories out there is that the White House was forced to pull the plug on the negotiations because certain leaders in the House and Senate threatened to derail congressional consideration of the FTA's implementing legislation if the Korean delegation refused to cave to their precise market access demands.  In particular, there are rumors floating around that current and future Ways & Means Committee Chairmen Sander Levin (D-MI) and Dave Camp (R-MI) took an extremely hard line on the FTA's automobile provisions (they're both from auto-loving Michigan afterall), and/or that Senate Finance Max Baucus threatened to scuttle Senate consideration of the FTA unless the Koreans agreed to dramatically expanded (and sped-up) access for US Beef imports.

This theory has a modicum of plausibility for three reasons: (i) these Chairmen clearly have a strong political stake in ensuring that the domestic auto producers and the United Autoworkers Union (in the case of Levin and Camp), and/or the American ranchers and meat producers (in the case of Baucus) get their way; (ii) they control the congressional committees that review and approve US trade measures, including FTA legislation; and (iii) Levin, Camp and Baucus released very hard-line statements immediately before and after the announcement of failure by Presidents Obama and Lee (with Camp's statement representing an apparent change of heart from an earlier stance back in September).  And this theory, of course, has the benefit of casting President Obama as neither a raving protectionist nor a ruthless, union-pleasing politician, but instead as the unfortunate and unwitting victim of a last-minute change of heart by these powerful committee chairs.

But is this theory in any way grounded in political reality?  Could these guys really use their power to derail the KORUS FTA if/when the White House finally submitted a deal to Congress next year?  Baucus in particular certainly hasn't been shy about threatening such a move, stating at an August hearing: “No deal is better than a bad deal.... I don’t know why I should schedule a hearing on a Korean FTA that does not include all beef, all ages, all cuts.”   And rumors have even swirled about scary committee staffers ominously present in the staff-level negotiations leading up to the Obama-Lee meeting.  But is such a congressional power-play really a possibility?

In short, no and yes.  But the latter answer might actually make the White House look even worse in this mess than we originally thought.

First, let's deal with the "no."  Because the KORUS FTA was negotiated and signed back on June 30, 2007, it is subject to the now-expired provisions of Trade Promotion Authority - or "fast track."  Under this law, 19 USC Sec. 2191, once the President submits a trade agreement's implementing legislation (essentially all of the changes to US law that the FTA would entail), the House and Senate must vote on the bill, without amendment, within 90 legislative days of the bill's submission.  Here's wikipedia with a good summary of TPA's procedures and timelines (emphasis mine):
If the President transmits a trade agreement to Congress, then the majority leaders of the House and Senate or their designees must introduce the implementing bill submitted by the President on the first day on which their House is in session. (19 U.S.C. § 2191(c)(1).) Senators and Representatives may not amend the President’s bill, either in committee or in the Senate or House. (19 U.S.C. § 2191(d).) The committees to which the bill has been referred have 45 days after its introduction to report the bill, or be automatically discharged, and each House must vote within 15 days after the bill is reported or discharged. (19 U.S.C. § 2191(e)(1).) In the likely case that the bill is a revenue bill (as tariffs are revenues), the bill must originate in the House (see U.S. Const., art I, sec. 7), and after the Senate received the House-passed bill, the Finance Committee would have another 15 days to report the bill or be discharged, and then the Senate would have another 15 days to pass the bill. (19 U.S.C. § 2191(e)(2).) On the House and Senate floors, each Body can debate the bill for no more than 20 hours, and thus Senators cannot filibuster the bill and it will pass with a simple majority vote. (19 U.S.C. § 2191(f)-(g).) Thus the entire Congressional consideration could take no longer than 90 days.
This summary makes clear that, US law (TPA) precludes the Chair of the House Ways & Means Committee or of the Senate Finance Committee from holding up the FTA legislation, thus keeping it from a floor vote.  If they try (as Baucus apparently threatened above), the bill will be automatically discharged from committee and scheduled for a floor vote (which they also can't stop, or even amend).  Thus, it is legally impossible for any single member of Congress, no matter what committee he chairs, to derail the KORUS FTA.

However, that's not the end of the story, and it brings us to the "yes" part of my Kremlinology.  As we unfortunately learned back in 2008, the House or Senate can derail an FTA by passing (by majority vote in only that chamber) a resolution to dismantle TPA's timelines, just as the Pelosi-led House did in order to hide members from the up-or-down vote on the US-Colombia FTA which President Bush had submitted to Congress earlier that year.  But this still required a majority of House members to pull off, and thus Levin/Camp or Baucus would have to rally the support of 215 other members of the House or 50 other Senators in order to pass this cowardly resolution.  On the House side, it seems extremely unlikely that Camp could pull off such a move next year because the new House GOP leadership (plus a few brave Democrats) has routinely called for the FTA's passage as-is.  On the Senate side, Baucus might be able to garner support, but only if he can rally almost all Senate Democrats (plus maybe a couple anti-trade Republicans).  But - and here's the kicker - for either scenario to be even remotely possible, the White House would have to absolutely refuse to confront the FTA's congressional opposition and defend the deal (and free trade more generally) to the American people.  (Recall that the President - and he alone - submits the FTA to Congress, and he thus controls the national conversation on KORUS.)

So this overly-lengthy analysis leads us to only two conclusions:

(1) Due to the legal restrictions of TPA, this theory about unbearable congressional pressure is absolute nonsense.  If so, we're back to blaming the White House - and only the White House - for a policy and diplomatic mistake of monumental proportions and/or some seriously ruthless political strategery; or

(2) Due to the tiny little (man-made) loophole in TPA, this theory about unbearable congressional pressure is true.  If so, the White House has apparently made a calculated political decision that it will not devote even an iota of political capital to fighting Congress for the KORUS FTA or to publicly defending free trade in 2011.

But does scenario 2 really make you feel any better about last week's collapse?

I didn't think so.


John B. said...

Your analysis suggests that Levin, Camp, et al, might come around if they get what they want. But they have cleverly avoided saying exactly what they want so that they will never be forced into a position of having to change their minds, which they intend never to do, no matter what. Obama knows that.

The reason the talks in Seoul broke down is that the Koreans refused to budge on anything. When USTR tried to change the subject from cars to beef, the Koreans walked out. Not that I blame them - a deal's a deal.

Scott Lincicome said...

Hi John,

I certainly did not mean to imply that these guys were playing it straight when it comes to their ambiguous demands on autos/beef. On autos in particular, I noted last week that the issue has never really been abt Korean market access but instead unfettered competition from Korean cars and trucks in the US market. So it wouldn't surprise me at all to hear that these "demands" were really just a game of moving-the-goalposts.

On your second point, that's very interesting, and I'd love to know where you got your information (because it would paint all those USTR/Korean statements about "progress" before the Obama-Lee meeting in quite the, umm, unfavorable light). And I certainly agree with you that the Koreans had every right to tell the USA to buzz off. Regardless, the events you describe still confirm my views that (a) this isn't about congressional threats at all, and the President knows it; (b) the White House refuses to spend an ounce of political capital on KORUS or trade generally leading into 2012; and (c) the President's June announcement of the big G20 deadline, as well as how the narrative and negotiations played out, were the height of incompetence.

I'm not sure you'd disagree with any of that, but I thought I'd include it just so we're clear. Anyway, thanks for your comments.