With the Trans-Pacific Partnership (TPP) negotiations reported to be nearing completion and the Transatlantic Trade and Investment Partnership (TTIP) talks kicking into higher gear, Congress is expected to turn its attention to Trade Promotion Authority (TPA) legislation in the weeks ahead.

That’s where opponents of trade – mostly from the Left, but some from the Right – have decided to wage the next battle in their war against trade liberalization. Tactically, that makes some sense because, if they succeed, the TPP and the TTIP will be sidelined indefinitely. But, as observed by the Greek Tragedians and countless times in the millennia since, truth is the first casualty of war.

Trade opponents characterize TPA as an executive power-grab, a legislative capitulation, and a blank check from Congress that entitles the president to negotiate trade deals in secret without any congressional input except the right to vote “yea” or “nay” on an unalterable, unamendable, completed and signed agreement. But the truth is that TPA does not cede any authority from one branch to the other, but makes exercise of that authority more practicable for both branches.

Under the Constitution, Article I, Section 8, Congress is given the authority to “regulate commerce with foreign nations” and to “lay and collect taxes, duties, imposts, and excises.” While the president has no specific constitutional authority over trade, Article II grants the president power to make treaties with the advice and consent of the Senate. Accordingly, the formulation, negotiation, and implementation of trade agreements require the involvement and cooperation of both branches.

TPA allows the executive branch to negotiate trade deals with foreign governments on the basis of guidance from Congress, to be approved or not, under expedited legislative procedure by a subsequent up-or-down congressional vote on legislation to implement the agreement after it has been completed. That guidance includes articulation of Congress’s trade policy objectives, specific parameters, and other conditions that it expects the executive branch to meet in order for completed trade deals to receive the fast-track treatment of guaranteed, timely, up-or-down votes in both chambers without scope for amendments or filibusters. In other words, Congress does not relinquish its authority. It reiterates its authority by setting boundaries for the president.

Absent a grant of TPA, the executive branch would have difficulty concluding trade negotiations because foreign governments would be unlikely to put their best offers on the table without assurances that the agreement wouldn’t be unraveled by Congress. Put another way, TPA gives the president additional negotiating leverage by assuring trade partners that any agreement reached is final.

Every U.S. president since 1974 (when TPA was born as “Fast Track Negotiating Authority”) has been granted this authority by Congress to negotiate agreements to expand trade with other nations. Questions about whether this compact is proper and constitutional have been raised and answered affirmatively over the years by legal scholars. In 2002, former Attorney General Edwin Meese III and a colleague authored a legal memorandum for the Heritage Foundation, which found that TPA was “clearly constitutional” because:

Congress retains its authority to approve or reject all future trade agreements. It might be unconstitutional if Congress tried to delegate its authority to approve the final deal, but that is not at issue. Congress may always kill any future international trade agreement by withholding its final approval.

(More background on practical, legal, and constitutional matter here and here.)

In July 2013, President Obama requested that Congress reauthorize TPA, which elapsed six year earlier during the Bush administration. In January 2014, legislation to renew TPA—the Bipartisan Congressional Trade Priorities Act of 2014—was introduced in the House and Senate, but Congress did not act upon it, so new legislation will be required in the 114th Congress.

Although support for renewal of TPA is stronger in the 114th Congress, there is likely going to be considerable debate about which congressional objectives, conditions, and parameters to include, and what shortcomings might trigger removal of an agreement from fast track consideration. That all makes for healthy and appropriate debate.

Some libertarians have been expressing concern about particular aspects of trade negotiations, often focusing on provisions relating to intellectual property. Here’s Jesse Walker of Reason:

“Free trade” agreements frequently include details that don’t have anything to do with freeing trade. When intellectual property enters the picture, the rules typically make trade more rather than less restrictive. That certainly seems to be the case with the TPP: Provisions in the leaked drafts would extend copyright terms, impose DMCA-style restrictions on circumventing copy protection, and otherwise take a maximalist approach to intellectual property. There are efforts to add tighter IP regulations to the Transatlantic Trade and Investment Partnership too.

I already tend to be skeptical about trade agreements as a path to freer trade, but I recognize and respect the argument that they do more good than harm. That argument is much harder to maintain, though, when the deals are loaded down with provisions like these. If fast-track authority makes such rules easier to pass, then fast-track authority is something I’m happy to do without.

I get what he is saying about intellectual property, and I have criticized this aspect of trade talks myself. But as my colleague Dan Ikenson says, we should consider whether these deals are “net liberalizing.” In this regard, I think trade deals have the potential to do a lot of good, in ways that people may not be aware of. Here’s an example from the negotiations between the U.S. and EU. The EU has proposed new disciplines on government subsidies, in which it states:

subsidies given to support insolvent or ailing companies without a credible restructuring plan belong to some of the most harmful types of subsidies and have the potential to have an adverse effect on trade and investment relations.

Now, translating such sentiments into concrete rules can be difficult, but I like the idea of pushing for limits on subsidies. I can’t guarantee that anything will come out of the EU proposal, but I’m glad they are pursuing it. To me, a trade agreement that offers additional disciplines on subsidies is something of great value.

(Some of you might be thinking, wait, how come the EU is proposing constraints on subsidies? Aren’t they the worst abusers, with their farm subsidies, Airbus subsidies, etc.? Here’s my sense of what is going on: In addition to the concerns about bailout-type subsidies mentioned in the quoted text, the EU has some pretty strict internal rules governing when its member states can provide subsidies. As a result, the Europeans get annoyed at subsidies offered by U.S. states, and are looking for ways to impose constraints on these and other U.S. subsidies).

Some of the most vocal criticism of the Transatlantic Trade and Investment Partnership, a proposed trade agreement between the European Union and the United States, is coming from Europeans worried that the agreement will liberalize parts of their economy that it actually won’t. This is a very frustrating situation, because supporters of the agreement are then forced to assure critics that the TTIP will not, in fact, do this particular good thing they don’t want it to do.

For example, people have claimed angrily that the TTIP will require the UK to privatize its National Health Service and then prevent the government from “renationalizing” it—that would be great, but it’s not true. At most, the UK would be required to allow U.S. companies to participate if the government chose to privatize parts of the NHS and then compensate them in any future taking, as it would surely do anyway. If the UK ever reforms its health system, it won’t be because of TTIP.

Now a new boogieman has emerged, with European news media fretting this week that the TTIP could require Europe to relax protections for geographical indications on cheese and meat products.

As reported in the Financial Times:

Christian Schmidt, Germany’s agriculture minister, said in an interview with Der Spiegel: “If we want to seize the opportunities of free trade with the enormous American market then we can’t carry on protecting every sausage and cheese speciality.”

Food producers, politicians and campaigners against the trade deal seized on his remarks as evidence that the protection of regional brands would be sacrificed to globalisation.

…

[But] Daniel Rosario, spokesman for the EU, insisted that TTIP would not undermine European food brands or weaken intellectual property safeguards.

“On the EU side, we have made clear to our American counterparts that geographical indications are one of our main priorities and we have not agreed and will not agree to reduce the protection of our geographical indications in Europe,” he said.

Despite what a German official may have said, the EU is not only committed to maintaining its GI protection scheme but is intent on spreading it internationally. If the TTIP does impact the use of geographical indications it will likely be to require the United States to recognize and protect European GIs in the U.S. market.

That’s a real shame, because Europe’s method for protecting GIs is bad for European consumers. U.S. policymakers should avoid imitating it.

Sometimes when a product uses the name of a place, it’s to indicate origin. For example, any consumer that purchased Napa Valley wine, Wisconsin cheese, or Florida orange juice expects that some or all of the product was produced in those locations. On the other hand, lots of place names are generic indicators of a product’s characteristics. For example, no one thinks Philly cheesesteak, Boston cream pie, or Texas toast have to be made only in those places.

The proper way to distinguish between these different uses of place names is to gauge consumer expectation. However, many countries in Europe, and the EU itself, protect GIs not to prevent consumer confusion but to secure advantages for traditional producers. They use restrictions on language in order to prevent names from becoming generic, and are trying to claw back names that have already become generic in foreign markets.

Americans would be surprised to learn how many of the foods they eat have names that Europe thinks are GIs in need of protection. The most well-known example of a term that is generic to Americans but not Europeans is champagne, which to most Americans simply means wine with bubbles. But cheeses like asiago, parmesan, and gorgonzola are also regulated geographically in Europe as well as countless other descriptive terms like Cornish pasty and Greek yogurt.

The result for Europe is a market where quality and geography are legally tied together. This system pleases local producers and politicians, but it also kills innovation and prevents the development of efficient supply chains. Consumers may know just where their cheese came from, but without competition, they will have to pay more for it and it probably won’t taste as good.

Our immigration system is broken and Congress has shamelessly refused to fix it. Of course, this unfortunate circumstance doesn’t give the executive branch the power to institute reforms itself. Yet through a recently announced policy known as Deferred Action for Parental Accountability (DAPA), President Obama has given partial legal status to more than four million illegal migrants, entitling them to work authorizations and other benefits.

This unilateral action is good policy, bad law, and terrible precedent. Perhaps most importantly, it violates the separation of powers and is thus unconstitutional.

In what is becoming a routine occurrence under this administration, 25 states have sued the federal government in response to this executive action. The case is now before a federal district judge in Brownsville, Texas, who is entertaining the plaintiffs’ motion to enjoin DAPA.

Cato, joined by law professors Josh Blackman, Jeremy Rabkin, and Peter Margulies, has filed an amicus brief supporting the motion. It’s highly unusual for Cato to file at the district court level—indeed amicus briefs of any kind are unusual in this forum—but this is a highly unusual situation.

To be clear, we support comprehensive reform that would provide relief to the aliens protected by DAPA (among many other goals), but it’s not for the president to make such legislative changes alone.

President Obama has defended his action by citing past deferrals for (1) battered and abused aliens, (2) aliens involved in human trafficking, (3) foreign students affected by Hurricane Katrina, and (4) widows of U.S. citizens. But these deferred actions, to the extent they’re relevant here, served as temporary bridges from one legal status to another, not tunnels that undermine legislative structure or detours around the law to hitherto unknown destinations. Moreover, they were several orders of magnitude smaller than DAPA, in the tens of thousands not the millions. Most significantly, they were all approved by Congress.

None of these principles holds true for DAPA. The administration itself stated the applicable test in the memorandum setting out DAPA’s legal justification: “an agency’s enforcement decisions should be consonant with, rather than contrary to, the congressional policy underlying the statutes the agency is charged with administering.” This executive action represents a fundamental rewrite of the immigration laws that is inconsistent with the congressional policy currently embodied in the Immigration and Naturalization Act (INA)—a policy that, again, those who joined this brief by no means endorse.

As Prof. Blackman explains in a new law review article, DAPA is in palpable tension with the INA, implementing under the guise of executive discretion wholesale waiver/​suspension/​deferral that swallows the enforcement rule. Indeed, Congress rejected or failed to pass immigration-reform bills reflecting this policy several times, so executive power in this area is “at its lowest ebb,” to use Justice Robert Jackson’s famous formulation from the 1952 Steel Seizure Case.

In our constitutional architecture, executive action based solely on Congress’s resistance to presidential policy preferences has no place. While we agree that the immigration laws need to be overhauled and sympathize with the plight facing undocumented aliens, the path designed by the Framers for implementing needed reforms goes through the halls of Congress. Unilateral exercises of power such as DAPA undermine the separation of powers and ultimately the rule of law.

Judge Andrew Hanen, who was nominated by George W. Bush and unanimously confirmed by the Senate, will hold his preliminary injunction hearing in Texas v. United States on Jan. 15 in Brownsville, Texas.

Though a monument to the ravages of Soviet central planning, the barren Magnitogorsk steel works complex still inspires America’s industrial policy proponents. “Failure to plan is a plan for failure,” said comrade Rep. Dan Lipinski (D‑IL), as he described the “pro-manufacturing” legislation he helped slip into the mammoth Cromnibus bill, which became law this month.

The Revitalize American Manufacturing and Innovation Act directs the Secretary of Commerce to establish a “Network for Manufacturing Innovation” to:

• improve the competitiveness of U.S. manufacturing and increase production of goods manufactured predominately within the United States;
• stimulate U.S. leadership in advanced manufacturing research, innovation, and technology;
• accelerate the development of an advanced manufacturing workforce; and
• create and preserve jobs

Of course, the verbs “revitalize,” “improve,” “stimulate,” “accelerate,” “create,” and “preserve” are euphemisms for protect, subsidize, regulate, and intervene.

From Lipinsky’s perspective:

This is a big victory for a sector of our economy that over the years has provided so many high quality jobs in my district, in our region, and across the nation, but has taken many hits over the past couple of decades, especially during the recent recession. While manufacturing is by-and-large a private, market endeavor, few can disagree that government policy impacts manufacturing in countless ways.

Yes, government policy has affected manufacturing in countless–usually adverse–ways. Excessive regulations enabled by irresponsible agency cost-benefit analyses, a burdensome tax system, endemic exposure to frivolous lawsuits, exorbitant health care costs, inefficient union work rules, tariffs on industrial inputs, absurd restrictions on immigration, subsidization of chosen firms, and other forms of corporate favoritism are all drags on manufacturing (and other economic sectors, too). U.S. manufacturing would benefit from less Washington, not more.

The Revitalize Act is a solution in search of a problem – and a bad solution at that. American manufacturing does not need revitalizing. Despite Washington’s many meddling interventions, and despite the persistence of the myth of U.S. industrial decline, U.S. manufacturing is thriving–and always has been. Year after year, with the exceptions of during cyclical recession, new records are set with respect to most relevant industry health metrics. The most recent official data reveal all-time highs for manufacturing sector output, value-added, revenues, exports, profits, and foreign direct investment–all in real terms and all achieved, largely, in the absence of top-down planning.

Moreover, for a country whose consumers spend twice as much on services than on goods, and where 90 percent of the workforce is employed outside the manufacturing sector, official obsession over the future of manufacturing is more than a bit overplayed. Many with this obsession dwell on the past, evoking the good old days of 1979, when the sector employed almost 20 million workers, or 1953, when manufacturing accounted for a record 28 percent of U.S. GDP. But today’s manufacturing worker produces an average of $170,000 of value-added per year, as compared to $28,000 in 1979–a more than quadrupling of output in real terms. And, although manufacturing’s share of the economy has declined to about 12 percent today, the absolute value of U.S. manufacturing output, in real terms, has increased more than six-fold since 1953. The facts that the sector supports far fewer jobs today and accounts for a smaller share of the U.S. economy say absolutely nothing about the state of the manufacturing.

What matters is whether there is continued growth in value-added, revenues, foreign direct investment, research and development expenditures, capital expenditures, and productivity. By each of those measures, U.S. manufacturing is robust. When it comes to the question of the condition of U.S. manufacturing, which is likely to be a more credible barometer: legislators who benefit from the perception of fixing “manufactured” problems or investors revealing their preferences through their own actions? As of 2013, nearly $1 trillion of foreign direct investment was parked in U.S. manufacturing, by far the number-one manufacturing investment destination in the world. That’s a rather strong endorsement of the state of U.S. manufacturing.

How on earth would U.S. manufacturers–the world’s most advantaged with their unparalleled access to idea incubators, research universities, R&D laboratories, and broad and deep capital markets to commercialize the ideas that make it through a rigorous vetting process–benefit from the Commerce Department’s participation in mapping out the future? Sure, some firms in some manufacturing industries–those that succeed in convincing the government that they are worthy of public support (i.e., those that commit more resources to political, rather than economic, activities)–may benefit. But others, which rely upon and adapt to the verdicts of consumers in a market environment, will be disadvantaged.

Industrial policy is anathema to the market. It short-circuits a selective, evolutionary process that has undergirded the world’s most successful innovation machine and reduces chances of worthy ideas, firms, and industries leading the next commercial wave. Did the last generation’s policymakers anticipate the arrival of Steve Jobs, Bill Gates, or Mark Zuckerberg and the revolutionary products and services they delivered? Did Washington bureaucrats foresee the advent of specific life-extending medicines and devices, like swallowable, pill-sized cameras? Had those proposing industrial policy in response to a rising Japan in the 1980s and early 1990s prevailed, much of the technology and medical advances taken for granted today would have never come to fruition. American manufacturing and the broader U.S. economy have been successful by shunning, more than embracing, industrial policy.

With its pre-eminence in innovation and entrepreneurship still intact, the United States is situated at the top of the global value chain. Staying there will require Americans to remain skeptical of top-down industrial policy. It could propel the United States above Kazakhstan as the world’s greatest producer of potassium, but at unthinkable costs.

We were once told that the Trans-Pacific Partnership would be completed by the end of 2013. Then it was early 2014, then late 2014, or probably sometime before 2015, or in early 2015 for sure. At this point, only two things are certain: you shouldn’t believe any predictions about the TPP, and the TPP is taking a really, really long time.

To get an idea for how long the TPP is taking, consider this graph put out by the Peterson Institute earlier this month showing the negotiation and ratification times for previous free trade agreements:

The argument they’re trying to make with this graph is that the United States needs to pass trade promotion authority to make sure the TPP doesn’t get bogged down in Congress (the red line) after negotiations finally conclude. They may be right, but I think it also tells us quite plainly that quick ratification of the TPP, with or without trade promotion authority, is an unrealistic expectation.

Here’s the same data presented with the negotiation and ratification times stacked on top of each other and with the current progress of the TPP (and TTIP) included:

As you can see, the TPP negotiations are taking an unprecedentedly long time to complete. 

Undaunted by the failure of previous predictions, the U.S. Trade Representative is now claiming that the negotiations will conclude and the whole deal can be passed by Congress before the end of 2015. That would be an impressively abrupt end to a long project, with a blue and red line total of just under 70 months. 

It’s possible that passing trade promotion authority will bring much needed energy to the TPP process. Hopefully, USTR is right, and Congress will pass trade promotion authority, the TPP negotiations will conclude, and the ratification will be swift. 

It seems more likely, however, that the TPP is a trade policy quagmire the United States entered into with overly ambitious goals and inadequate resolve to see them met. There’s a lot more than just the lack of trade promotion authority keeping the TPP negotiations from concluding. And you might notice from the graph above that, even with trade promotion authority in place, the most recent trade agreements lingered in Congress for a very long time after the negotiations were completed.

Maybe I’m wrong. Maybe the stars are about to align for the TPP. But if I’m right, how long do we have to wait before we rethink our strategy?