House Democrats voted against an important leg of the proposed Trans-Pacific Partnership this week, potentially derailing President Obama’s ambitious push for the free trade agreement.
In a huge blow to the president, House Democrats voted to end assistance to workers displaced by global trade on Friday, June 12. The move effectively scuttled legislation to fast-track the proposed Trans-Pacific Partnership, intended to grant the president power to negotiate the free trade deal without amendments or filibusters by Congress.
“We have an opportunity to slow down,” said Representative Nancy Pelosi on the House floor Friday. “Whatever the deal is with other countries, we want a better deal for America’s workers.”
The unexpected defeat now imperils the more sweeping Trans-Pacific Partnership, a proposed trade agreement with 11 other nations along the Pacific Ocean that affects 40% of the global economy. But the real surprise may have been how Wall Street reacted to the news. When the motion failed to pass, U.S. stock prices barely budged.
The market’s apparent indifference to this development did not go unnoticed in business circles. On Twitter, economist Tyler Cowen argued passing the Trans-Pacific Partnership “[…] is not actually a huge transfer of wealth” to large corporations.
If he’s right, then perhaps the stakes here aren’t as high as some commentators have suggested. This trade deal will only add millions of dollars in corporate profits to firms already raking in billions.
The Trans-Pacific deal is not finished, but it’s now far less likely to get the green light. House Republicans plan to bring the worker program bill back up for a second vote next week. However, Obama will only have a few short days to persuade dozens of representatives to change their minds on a bill fiercely opposed by key Democrat supporters like unions and environmentalists.