The Trade Beef Between Elizabeth Warren and Barack Obama, Explained

Obama is eager to broker the Trans-Pacific Partnership, but progressive critics like Warren see it as NAFTA on steroids

President Obama and Elizabeth Warren disagree about the Trans-Pacific Partnership. Credit: Jessica Rinaldi/The Boston Globe/Getty

Republicans take infighting for granted. The GOP establishment and Tea Party insurgents have been waging a bloody battle for the heart and soul of the party for years now.

Democrats aren't used to this kind of rancor — particularly between party all stars. So when President Barack Obama slammed Elizabeth Warren over the weekend as "a politician like everybody else" whose "arguments don't stand the test of fact and scrutiny"?

For the party faithful, it was a little like if mom and dad had started shouting at each other in the living room.

What's the beef about?

In a word, trade.

President Obama and congressional Republicans are eager to broker a new trade accord called the Trans-Pacific Partnership, or TPP.

Sounds innocuous. What is it?

The idea is to create a massive free-trade zone around the Pacific rim: from Canada down to Chile, across to New Zealand, and up to Korea and Japan, by way of Australia, Singapore and Vietnam (notably excluding China).

This is a massive deal — according to administration estimates, the United States exported $622.5 billion in manufactured goods in 2013 to TPP nations. U.S. negotiators hope TPP will not only lower tariffs, but deliver broad agreements to protect intellectual property, affecting everything from software and movies to drug patents and the free flow of data on the Internet.

Why does Obama like it?

The deal has broad geopolitical implications — as underscored by the fact that even the Pentagon's political leadership is joining the fight for TPP.

TPP is a vehicle for the United States to project its economic power in Asia, and to challenge the ascendancy of China. The argument that Obama and other proponents make is that if the U.S. doesn't broker a deal like this, China will, to the disadvantage of U.S. companies and their workers. In a letter sent to his political email list this week, Obama wrote: "We don't have the option to sit back and let others set the rules. We need to take this opportunity to level the playing field."

The labor and environmental standards that will be baked into the TPP may not be perfect, this line of argument goes, but they're surely preferable to the status quo or anything that Beijing might dream up. "If and when this agreement is completed, you're going to have countries who have very low, if any, environmental standards in the past suddenly having obligations to deal with issues like deforestation or dealing with overfishing their waters or pollution or child labor," Obama
told The Wall Street Journal.

Politically, TPP also gives Obama his last best shot at a big, bipartisan policy victory. For his presidential legacy, Obama desperately wants TPP to stand as a counterweight to the divisive politics that have defined his two terms in office. For their part, top Republicans are playing ball: Rep. Paul Ryan has likened the president to a "blind squirrel" who has finally found a nut with TPP.

Why does Warren hate it?

Progressive critics of TPP see it as NAFTA on steroids.

The NAFTA era has coincided with stagnant American wages and soaring inequality. (Is the North American Free Trade Agreement a root cause, or a convenient scapegoat for these economic trends? The data are not, unfortunately, clear.) What's certainly true is that Obama, himself, rose to power bashing the free trade deal. Campaigning for his first term, Obama promised to renegotiate the pact to include tougher environmental and labor standards. That never happened — although Obama has lately argued that TPP, because it includes Mexico and Canada, is a round-about fulfillment of that vow. "If you're still mad about NAFTA from 25 years ago," he told The Wall Street Journal, "effectively, we're renegotiating NAFTA to solve some of those problems through the Trans-Pacific Partnership."

For Warren, in particular, the secrecy of the negotiations is a red flag. Led by former Citigroup and Robert Rubin deputy Michael Froman, the U.S. Trade Representative, TPP has been drafted behind closed doors, with big corporations getting more access to information about the deal than many members of congress. Leaked draft memos have only inflamed the concerns of critics.

"If the president is so confident it's a good deal," Warren told The Washington Post on Monday, "he should declassify the text and let people see it."

Of deeper concern to Warren, TPP could empower big companies to challenge the laws of sovereign governments  — including tough U.S. environmental regulations — through trade tribunals. The so-called "investor-state dispute settlement mechanism" could put taxpayers on the hook for paying out billions to multinational corporations who successfully make their case before trade arbitrators. "The only winners will be multinational corporations," Warren has written. "Why create these rigged, pseudo-courts at all? What's so wrong with the U.S. judicial system?"

So what just happened in the Senate that I keep seeing headlines about?

President Obama has been seeking "fast track" negotiating authority. Fast track would give the administration a free hand to close a deal on TPP, guaranteeing the final draft would get an up or down vote in Congress — no amendments, no filibuster.

An attempt to approve fast track on Tuesday stalled out after it failed to failed to reach the 60 votes needed to overcome a filibuster, on a squarely party-line 52-45 vote.

White House spokesperson Josh Earnest repeatedly called this rebuke from Senate Democrats a "procedural SNAFU."

Situation normal, all fucked up, indeed.