Democratic frontrunner’s history of changing positions could be ammunition for opponents but she’s expressed doubts about trade deal before
As the ever-ready Hillary Clinton polishes her rhetoric ahead of Tuesday’s Democratic primary debate, managing her changing positions on the Trans-Pacific Partnership (TPP) will have her team working overtime.
TPP, a wonky trade deal negotiated in secret by the US and 11 Pacific Rim nations, is proving an unusually sexy subject for the media and for Clinton foes. Her vacillating has even been the subject of a Saturday Night Live sketch .
Last week, the treaty was partially leaked to less than enthusiastic reception as the US Congress, which awaits a “legal scrub” of the full document. Clinton, consistently the highest-polling candidate for the Democratic nomination, was among the first to criticize the Obama-backed plan.
“I’m worried about currency manipulation not being part of the agreement,” she told PBS. “We’ve lost American jobs to the manipulations that countries, particularly in Asia, have engaged in.”
Her opponents on the left, notably Bernie Sanders, have long opposed the treaty on these, and other, grounds. But for Clinton this is something of a volte face. She is even facing off against some of her biggest backers.
There is a tremendous amount at stake financially in the treaty: the total goods traded in 2014 between the US and the 11 other countries in the agreement totaled some $1.57tn.
Wall Street, which has been very supportive of Clinton, is worried.
Morgan Stanley, one of the largest investment firms in the US, has lobbied extensively on the TPP as the Center for Responsive Politics noted in May , spending $4m in 2013 and nearly $5m in 2014 on the deal. Tom Nides, Morgan Stanley’s vice chairman, is one of Clinton’s closest advisers.
“It is not desirable for trade agreements to include provisions aimed at so‐called currency manipulation. This is because monetary policy affects the value of currencies. Attempts to penalize countries for supposedly manipulating exchange rates would thus impose constraints on US monetary policy, to the detriment of all Americans,” some 14 economic advisers wrote in a letter to Mitch McConnell, Nancy Pelosi, and Harry Reid on 5March 5 of this year.
Morgan’s Laura D’Andrea Tyson, a major Clinton supporter, was among the signatories. Erskine Bowles, another Morgan Stanley board member, served alongside Tyson during former president Bill Clinton’s administration.
Another Clinton adviser, former Goldman Sach’s vice chairman Robert Hormats, is another big supporter of TPP. “On the base of what I’ve seen, it looks like we’re doing quite well [on TPP],” he told Bloomberg TV last week, the day before she rejected it.
Irrespective of whether or not the position is one of expediency, Clinton shares her new found concerns with one of the advisers who served on a committee reviewing the TPP for the administration, Michael Wessel.
Currency controls are vitally important, Wessel said. “The administration refused to deal with currency, so the positive effects that might result in a small number of sectors could be wiped out overnight,” Wessel said. “We saw that in NAFTA [North American Free Trade Agreement] when Mexico devalued the peso within weeks of the agreement being signed.”
Money is not Clinton’s only concern with the deal. She is now also worried about what TPP might do for drugs companies. “[P]harmaceutical companies may have gotten more benefits and patients and consumers got fewer,” Clinton said last week.
The comment is likely a reference to a part of the IP chapter that appears to outlaw a new kind of generic drug, a “biosimilar” (as opposed to biologic), for at least a decade, potentially driving up the cost of medication used to treat diseases such as multiple sclerosis.
Clinton has come out hard against rising drug costs after recent scandals. After former hedge fund manager Martin Shkreli, who now runs Turing Pharmaceuticals, hiked the price of a drug used by HIV patients from $13.50 a pill to $750 Clinton promised reforms in the pharmaceutical industry.
Both Clinton (and Obama) were major recipients of Big Pharma cash in the 2008 election cycle. It remains to be seen whether those firms will be as generous this time.
Clinton has consistently tacked left during the primary, but it would be unfair to say that this is the first time she has expressed reservations about the TPP. In her memoir Hard Choices, published last year, she wrote “It’s safe to say the TPP won’t be perfect – no deal negotiated among a dozen countries ever will be – but its higher standards, if implemented and enforced, should benefit American businesses and workers.”
Trade negotiations in general, and TPP in particular, are complex. But given Clinton’s recent full-throated disapproval of a deal she once supported, that complexity will not be in her favor when she faces off against her opponents on Tuesday.
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