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Trade and Immigration after the Midterms
Welcome to the president's inbox see her podcast about the foreign policy challenges facing the United States. I'm Jim Lindsey direct. Your studies at the council poor relations this week's topic trade immigration after the congressional midterms. With me this week to talk about how midterm election results might affect trade immigration is Ted Alden. Ted is the Bernard l Schwartz senior fellow at sea afar. Specializing in US economic competitiveness trade in immigration policy. He is the author of the terrific book failure to adjust. How Americans got left behind in the global economy. Ted, thanks joining me today. Jim, thank you. So we had the election voters went to the polls historic turn out. Democrats picked up something on the order of three dozen seats in the US house lost perhaps two maybe three seats in the Senate. But the most significant thing that the the two years of unified control in Washington is going to come to an end in January Democrats have control of the house. It's the question is what does this mean going forward? Let's start first with trade on the trade front. Let's talk. About your favorite acronym. US MCA NAFTA two point. Oh. What is the result of having Democrats controlling congress come January when we talk about US MCA, well with this means Jim there is a legal process established under what they call the trade promotion authority law under which congress has to give this new US MCA agreement and upper down vote. That's the vote in the Senate, which presumably the president won't have too much trouble with and a vote in the house, which of course, now controlled by the Democrats. So he is going to have to persuade the Democrats that his new and improved NAFTA. The US MCA is a deal worthy of their support. Even if he holds onto all of the Republican members of congress, he's going to need some significant democratic support. So that gives the Democrats some leverage. And there are ready. You know, even before the new congress is seated starting to make noises about how they might try to use that left. So let's break that down in a couple of bits number one. Do you expect the? President to be able to keep all the House Republicans in line. I mean is I look at the US MCA in some sense. It is a deal that should restrict market access rather than broadens market access. It has ruler guarding minimum auto witches and things things that Republicans typically at least in the pre Trump. Our didn't support is the presence still going to be able to bring Republicans along while this is going to be a new test, right? If you look at the old formula for passing trade agreements, it involved, the vast majority of Republicans always lost some there was always, you know, a dozen or maybe a few more worried about particular industries, and then you'd pick up a group of Democrats usually somewhere between twenty and thirty five and that was enough. Just barely get the thing over the finish line in house that was the formula for a long time. We don't know what's going to happen. Now. This is the first Trump trade agreement that's going to go in front of the congress. We don't know if that will. Old formula works anymore. There's a lot other wildcards in in here as well. You'd have to think he's gonna lose a few Republicans. So he's going to need it's going to need, you know, I would guess thirty or forty Democrats on board with him to get this thing. So he doesn't need to take this need to get all Democrats onboard. He needs to get some Democrats. But. Obviously big questions. We what's the shape of the legislation that actually comes to the floor of the house. This is the so-called implementing legislation. And I guess I question I before even talk about the nature that the implementing legislation is under trade promotion forty this law that governs it and requires the up down vote. That's if the green is actually complied with terms of TPA Iverson, people argue that actually the deal the administration structure the way they struck. It means that it doesn't actually comply with T P A. And so the House Democrats could incessantly rule it out of order while so there's the theory of teepee in the reality of teepee, and the theory of TPA is that that allows the president again with the caveat, you mentioned assuming that he followed broadly directions of the of the congress lousy president submit the agreement. For an upper down vote within a specific timeframe. The idea was was both to prevent the congress from amending the agreements complicated because you've got to go back to your trading partners and get their agreement go shoot United States. If congress has just always going to walk at the sessions and ask for me. Exactly. And it's also supposed to force the congress to vote on it within a certain specified period of time. The reality in recent years, though has been that the initial agreement is often an opening bid, and then the congress will say, well, we don't like this provision that provision before we're going to move forward. We want you the administration to go back and renegotiate that happen to the Bush administration with the deals with Korean Panama and Colombia that were then renegotiated under the Obama administration before they were finally submitted. That was what was in the process of happening in the Trans-Pacific Partnership before Trump pulled the plug after he took office. And that's what the Democrats are signaling even at this early stage that there are aspects of the agreement. They don't lie. Like, and they're going to try to put pressure on the president to go back to Mexico in particular in renegotiating the aspects of the agreement. They don't like Dawson we aspects of the government they liked they just want more. I mean, they liked the idea of setting a floor average on auto wages, but they don't like the fact that it's not indexed to inflation mung other criticisms, I mean, I think the biggest issue for the Democrats is going to be the general issue of enforcement of labor standards in Mexico standard a democratic object. And if they're sort of a of a kind of fatal flaw in NAFTA going back to when it was launched in the mid nineteen nineties, the theory was that as Mexico became more productive and competitive Mexican raises excuse me, Mexican wages would rise, and therefore Mexico would be a bigger market for US exports trade would stay reasonably balanced, and so the deal would workout on both sides fact, Mexican wages have stayed inordinately low. They've actually lost ground vis-a-vis US wages over the last. Quarter century. And so the democratic criticism of this agreement is well actually does make some improvements on this front. It doesn't really get at that core problem their testimony today in front of International Trade Commission, where all this is being talked about that's going to be the issue. National trade mission is a US government agency. It's not an international agency. No sorry. It's a US government agency, and is part of this process. Are this is so convoluted? The I c has to do an analysis of the economic impact one hundred five days is that is exactly so we're at the at the early stages of that, and and they take testimony. I mean, a lot of this is pretty much in the weeds. The the big picture here is one candidate Macron that's forced Trump to renegotiate parts of the deal. That's difficult. And if they can't what happens, then can they stole it? Can they block it? Or does the President Try to force action in my bed is the president tries to force action. I mean, this is the president goes like NAFTA in the first place, right? He was sort of a real he sort of renegotiated it reluctantly, I think the democr-. That's really try to stall this or insist on a major renegotiation. I think the possibility of the president pulling the plug on the entire deal goes back on the table. Would he pull the plug on the deal tenuous nation or would he go and change the choice that the congress face because one thing see could announce that he's withdrawing from NAFTA the original version, so then the choice for Congress's either you pass revised NAFTA or you get nothing. Yep. Exactly. And that's that's what it would be. It would be a leveraged tactic. Not that he particularly thinks it would it would lead to NAFTA going away, but it would provide him leverage over the Democrats. Now, the business community hates this idea. Because one of the things that's happened with this renegotiation is is some of the uncertainty. That was hanging over North American trade has been put to one side you announce a six month withdrawal, all of that comes back again with all its negative economic things. You don't want about uncertainty is that you don't know what to invest in. Because you don't know what the rules are serving goes on hold experts. That hurt your business. So what is your sense? Where is this all going to come down at the end of the day? We're going to have sort of a lot of sound and fury signifying nothing. Or are we going to actually see NAFTA go by the wayside because you can't get it passed? No. I think the deal gets passed. I think this administration and the US trade Representative Bob light has been quite explicit about it. A lot of the provisions that were renegotiated NAFTA our long standing asks from the labor unions, and from the Democratic Party limitation of investor state dispute settlement these new rules of origin on autos that try to favor high-wage production, some tightening labor standards in Mexico, maybe not enough. But some definitely the addition of a provision of will willing currency manipulation these longstanding asked so Democrats are getting something even his written. Yeah. They've actually got a lot in this deal and the labor unions. Interestingly have. So far kind of been on the fence. Remember what the Trans-Pacific Partnership? They were furious about the deal that Obama negotiated. They threatened to give money to people running against any democrat who voted for TB. They were on the warpath over it. So far with the US MCI. They've said, well, there are things we don't like their things we do like were studying it. So I think at the end of the day the Democrats get onboard. But what they're going to want to do in the process is try to be able to make public ace that Trump wasn't tough enough in this deal. The Democrats hate that Trump took this issue away from them. I mean, historically, the congressional Democrats were they were the critics of of these free trade deals. They were the ones who said that American workers were getting screwed. They were the ones who set enforcement wasn't tough enough. Trump took all those. They wanna get it back. That is if if they pass it then Trump gets to declare victory, and I think at the end of the day. That's what happens here. I think this will be sound and fury. But I think the deal go through it again in the background of all this is twenty twenty which is already the racer twenty twenty has already started. Well, I mean, just one quick comment on that. I mean, there's there's an individual who embodies this. And the question is is Sharad Brown. Senator Brown gonna run for president or not from the great state of trade one despite the state generally going Republican because the only democrat to win statewide, exactly. So so this'll all get played out with his decision on whether to run for president. And if so how the party greets that interest in politics infects political decisions in Washington, que does the midterm election have any consequence for any other trade negotiations? I mean, we have the whole issue of the Chinese the trade war with China. We have the question of whether or not we're going have tariffs on automobiles clearly affects the Japanese potentially the Europeans. Yeah. I don't. Don't think much because I mean, I the Democrats are supporting a lot of what Trump's doing on China in particular little less so on on Europe or Japan, they're pretty sympathetic as well. Secondly, they don't have the numbers to force any kind of change the president has his vast statutory powers that were granted to over many decades. Congress gave away its power day where it's a hard time. Reclaim very hard to reclaim. You're not going to have two thirds majorities take that back. Even if if folks on the hill wanted to so I don't think this really changes the picture whole lot on trade. The the the big enchilada apologies for mixing the metaphors. Here's China, and how the negotiations with China play out in generally, the Democrats have supported the the hardline at the Trump administration's taking. So I think that continues to move for there. There may be a lot of twists and turns. But but no big change in direction. One about an inside baseball inside trade story in that is the WTO World Trade Organization appellate body. This administration has been blocking the appointment of new appellate justices arbitrators, and as a result by the end of twenty nineteen they will not be enough appellate of wouldn't be a large of appellate body to be able to take on any cases, expect anything to happen on that front. I mean, again, the congress can't stop this. If the administration wants to go down that road. But, but certainly I think there's a strong consensus in the congress in both parties at the WTO is in the United States interest. They don't wanna see the body. Become completely dysfunctional is interesting this week that the US China economic and security review commission, which is an advisory body to the congress, which has traditionally taken quite a hard line on China trade issues said look we really ought to be using the WTO US should be filing a big case in the WTO not just using these direct unilateral tactics. So so I think if the administration really tries. To cut the World Trade Organization off at the knees. There will be some real pushback from congress. I I don't think the administration wants to walk away. I think is in a lot of these other issues. I think their desires to make their trading partners, squirm try to gain maximum leverage. And see if they can walk away with the deal that addresses some of the US concerns, I think that's where things are playing out the WTO arena. But also WTO heaven our trading partners filed or about file case on the aluminum steel tariffs because of national security considerations. Yeah. Those cases of already been filed. And the Trump administration has basically said to the WTO don't go here. National security is a sovereign dish decision in. However that dispute plays out. It will not be good for the credibility. The WTO will not be good for the integrity system. So there there's a sort of staring contest going on in countries. What it use that in the United States saying, look, this is none of your business if you will against this. We're walking the implicit threat, but these w. O cases generally take time of year. So it's not it's not on the front burner in terms of any sort of decisions. Okay. Any consequences in the election for the renewal of trade promotion authority, when's the president have to go back in and ask for more given that we're talking about a whole nother set of negotiations the Japanese the Europeans potential Chinese you're dealing with the worst part of my memory, which is exact dates, they got a renewal recently of the Obama TPA and that I think holds for another couple of years at this point. They the administration has asked the congress for thirty to negotiate trade agreements with Europe and with Japan under the existing trade promotion authority rules. I think everything this administration wants to do in its first term will be covered under the existing TPA. If it goes beyond that, then they're going to have to go back, and at that point, it's a rewrite of the law. They've gotta go back. It's not. Just an extension, but it is more conflict. Nothing coming down the road. Because again people already beginning to run for twenty twenty. I'm trying to sort of figure out. When lights are going to start flashing red. When it's impossible to get stuff done because everybody's locked onto the next election. Yeah. No, I think I'm gonna trade. I don't think that's going to have a big effect on what the congress has the US MCA is the is the the big thing that this congress is gonna have to do with. Let's switch gears now and talk what your other area of expertise, which is immigration policy, and you've written widely and well on the topic. Let's talk about sort of the most immediate issue, which is the approach of this caravan to the US southern border. The president tweeted about it and spoke about it a lot in the run up to the election seldom spoken about it. Since what sort of the current state of the issue, particularly as it relates to asylum policy. It's interesting, you know, both trade and immigration. We're obviously big issues in the two thousand sixteen campaign in the midterms. The trade issue didn't play all that problem. The president talk about a lot in tweet about it a lot things went fairly quite immigration. Was the opposite. Obviously, the caravan became a centerpiece of many of his rallies of a number of the ads that the Republicans ran warning of this invasion from Central America. And then it kind of dropped off the map the day after the election. There is a bigger underlying. We still have troops on the southern. She was on this other about finding somewhere between five and seven thousand US troops secretary Mattis was just down there. I think earlier today or yesterday talking to the troops down there on the border. So so this this mobilized the lot of activity by the administration. I mean, let's look at what we're talking about here. We're talking about this very slow moving group of people walking across Mexico in in in most cases, trying to make it to the border of the United States. The real issue here is that that US asylum pasta. Just United States is Europe is well silent policies been broken for a long commute has had a clarification what is asylum policy. What does it mean to request asylum? What are the rules governing? It so historically if you look at the southern border, most of the people coming were Mexicans mostly they were coming to work in mostly they tried to evade the border patrol. They try to get in the United States disappear into the country and work asylum was a long standing category of US law European law and others that says, look if you're. Fleeing torture and persecution in you arrive at our borders and one into the country, we will consider that request is we think you're fleeing torture and persecution than we're willing to allow you to stay. We're not gonna send you back to your country to be killed or harmed. So the I mean these these provisions go back to the end of the second World War when there was such a collective guilt about the refusal so many countries to take Jews who were fleeing Hitler's regime. So this is a long standing feature. It's it's in US law. Now, the the wrinkle here that's really problematic is that the way asylum law is written. It doesn't matter. How you arrive in the United States. It doesn't matter if you come legally on an airplane. It doesn't matter if you come legally through the port of entry at the border or if you walk across the desert and get arrested by a border patrol agent. Doesn't matter once you're on the territory of the United States, you have the right to request asylum, and the Trump administration looks at this is a gigantic loophole there. They essentially look they say look this provides enormous incentive for people to try to get across Mexico get to the border of the United States. Secondarily, if you arrive with family members, and particularly young children having to do with lot of case law in the United States. The ability of the US government to hold you in some kind of detention is limited. We don't wanna see two year olds in jail for two years. And because. The courts that adjudicate these cases that decide who can receive a psalm are so backlogged people who arrive they may not get their day in court for year two years three years. Meanwhile, there's somewhere in the United States. So the whole system is badly broken and the administration's right about that they're fixes or making it worse. But the system is badly broken. No question. So what courts here these petitions for saw their part of the department of Justice there. Call the immigration courts. And and and part of the problem either just under nearly enough images separate from court. You think about Steve scream courts or state courts or courts, they are. They are an arm of the department of Justice. They're essentially administrative ministration of judges kind of like social security has judges. There are other agencies that have judges. These are judges who adjudicate cases involving US immigration law, and these judges largely handled two kinds of cases one is people who are facing removal from the United States if you're arrested by. Immigration and customs enforcement ice, and you're gonna get sent back to your country you ever right to a hearing before one of these immigration judges. That's the first and the second set is these asylum cases people who arrive in a requesting asylum. The combination of the Trump administration's crackdown here at home trying to deport a lot more people and this huge surge in people fleeing from Central America trying to get into the United States seeking asylum has completely overloaded these courts, and that's why you have these long backlogs in creating all sorts of knock on dysfunction in the rest of the system. Get you said the administration's fixes are actually making the problem worse. What do you mean? Well, this is not a problem that can be resolved by enforcement at the border the notion that more border patrol agents or building a wall or sending troops to the border. These are not people who are showing up and trying to sneak in there showing up turning themselves in and saying I want asylum and so the solution for that. Not an easy one is is to ramp up the capacity to process these cases in a timely fashion. So you can make decisions in thirty days and say you qualify or you don't and then you can execute on that decision quickly. But there's no effort being made to improve the capacity the system. So instead ministrations trying to deter people that's what the family separation policy was about don't arrive here with your kids will take your kids away. So don't come that, obviously failed terribly with a lot of serious human consequences. The new tactic the administration's trying is threatening that if you arrive in you, enter the country illegally, they the US government will not hear your asylum claim now that is as far as I can tell a direct violation of the law as written by congress. The Trump administration has been sued by the American Civil Liberties union, and others the cases I suspect are going to move through court quickly. I suspect there's going to be injunction. I suspect the administration will not be allowed to go down this road. So everything that the Trump administration is doing is aimed at. Deterrence and punishment rather than trying to fix the broken parts of the silent processing another way of approaching the problem might be trying to deal with the problem at its source. We have people leaving these countries, particularly undo Guatemala, El Salvador places, a great violence homicide rates in those countries are among the highest in the world leaves hang in Honduras. It is the highest in the world. But this administration doesn't seem to be taking the course of what could we do to make things more Poudel for people in those countries, rather, they're threatening the governments of those countries know exactly there were two efforts under the Obama administration. One was just to increase aid, particularly to law enforcement and judicial systems in those countries to try to deal with some of the organized crime problems get that far. But there was a series of the second issue is our drug demand. Because of course, a lot of the violence. Those countries is fueled by the drug gangs. And there was a third effort that never got very far which was. Try to create a capacity for processing these claims closer to the source, so for instance, setting up refugee camps in Costa Rica, so people are leaving the northern triangle countries rather than crossing Mexico. They could go into Costa Rica have their cases process there. Trump administration shuttle that down instead basically saying to these countries in less you take steps to stop your own people from leaving were further gonna reduce US aid. So the whole approach interesting. Probably make the problem worse. And and you've seen this. And then, of course, the other interesting thing here is the role of Mexico. Mexico seems to kind of blow hot and cold over whether they are willing to try to stop these groups at their southern border. And I think the the incoming Mexican administration is much less inclined to do that. I mean during the campaign emloyees suggested that he didn't want him Levin. The the new the incoming President Lula's over. So I think the Mexicans are going to become less and less cooperative on that front leaving the. United States to deal with this providence board. So do you expect congress to do something on the asylum issue, or we back to this case where you don't have the votes? So you may have a lot of finger pointing and shouting maybe a lot of hearings particularly on the house sock. The Democrats have political as well as policy reasons to shine a spotlight on the administration's behavior. You know, I can imagine that that the house will pass legislation knowing that it will die in the Senate in a way to sort of set down a marker for twenty twenty as possible. The Senate will do the same thing. I mean, this is this is an issue that probably divides, the Republican and democratic parties more deeply than any other single issue. And now that the each control one of the houses, I suspect that they will use it as an opportunity to force the other party to make difficult votes to try to pass legislation that they can then campaign on twenty twenty but I'm not expecting anything to come out of congress. So that actually helps resolve this problem don't expect prog. Expect politics telling me how. So let's talk about something else in this space, which is the wall of Asli perhaps these signature issue for Donald Trump back in the campaign of thousand sixteen. He said Mexico is gonna pay for it. Experts said Mexico's not gonna pay for it Mexico. In fact, isn't paying for it. So I guess this is one where the experts gone it. Right. But president wants wants to build it now is trying to persuade congress to appropriate the money. He had trouble getting money out of congress when Republicans control both houses now, the Democrats can control one. So what happens to the issue of the wall? I mean, I think there continues to be little or no appetite in the congress to finance construction of of more fencing in wall along the southern border. So it gets down to the the sort of old issue of government shutdowns. I mean is Trump willing to veto appropriations bills that don't include funding for his wall and his? He prepared to let funding lapse particularly something's critical as the department of homeland security in order to try to force this issue again, you know, as in your previous comment, I think this will be a political calculation does that play well with his base by and large. It'd be interested in your take. It seems to me that both parties have concluded that government shutdowns or not a good thing, politically, they don't help the parties that force them any. That's why we haven't seen one in a while. I suspect that conclusion will hold that we won't see shutdown, but that's the only mechanism that Trump has to try to force the issue. This would be a different type of government shutdown given that in the past you had. House Republicans who were insisting on getting their way or they weren't going to support necessary legislation. But in this case, you'll have be having the president of the United States presumably saying if I don't get what I want. I'm not going to sign the Bill. I can't imagine that the Democrats would want to shut down the government. They believe in government. They want wanna make it work better. So it's gonna be interesting to see what the politics are. And I think you're quite right. It's going to come down to a political calculation by the president whether he believes serves his political interests, not the track record suggests that when presidents demand things from congress, and this way that it's really hard to carry the day because all of the nurse should division. Disagreement on Capitol Hill that keeps it from doing things keeps it from doing what you want. And it's even when you're very effective politician like the clearly Donald Trump is it is hard to make what seems at time to be an. Notable object move and in the end of the day, the congress still controls the purse is giving away a lot of authority in areas like trade. But and I suppose you could imagine deals where he gets a little bit of money, but he's probably going to have to give House Democrats something they really care about to make that worthwhile. Which reminds where do we stand on DACA? It's winding its way to the courts, but I'm sort of sort of left up in the air is to where things currently stand. Whether it's any resolution anytime soon, I mean, I think it will finally end up in the supreme court. So there was an appeals court decision. I'm forgetting which appeals court our politics, but just in this last week which ruled against Trump's effort to shut down the program. So remember it was crane. It's been a ninth because the president. Let's go to the night. Which is in California. I think it was. It was the ninth. But you know, if if we're. You're listening to this. But, but, you know, of course, Obama created the program by executive authority Trump tried to shut it down by executive authority to courts intervened to halt, the the winding up of the program. And now the courts have been been ruling sequentially on it. And and the latest ruling basically saying that the administration did not have the authority to shut down doc. So I think this will end up before the supreme court. This may be one of the first cases in which Brett Kavanagh's appointment becomes significant in determining the outcome. If the court rules against doc. It's going to be hard for the congress to overturn it. I think you're gonna have a difficult time having the votes getting votes there one final question any chance we're gonna get comprehensive immigration reform going forward. I asked this because we've had number of efforts in the past. They ball flopped. But there's sometimes talk that perhaps Democrats have incentive to want to show that they can govern and make things work. Perhaps you could take this off the table. Donald Trump could channel his inner Richard Nixon goes to China spirit is that out of the realm of possibility. I think it's completely out of their own possibility. I mean, the old formula for comprehensive immigration reform was tougher enforcement in exchange for some kind of legalization or amnesty. That's just so far off the table. Now. I mean, Donald Trump would not touch anything that looked like amnesty. Of course, his favored approach immigration. Performance to cut legal immigration substantially which the administration's is actually trying to do administratively you've seen significant slowdown in immigration just because of the toughening of of of regulation sort of admission to cut refugee admissions substantially which immigration had discretion over. So they're just they're just as no Vendee Graham on this issue that that us, you know, grand compromise is coming down the road. Okay. Thank you. Good. Ted. My guests speak has been Ted Alden. He's a senior fellow here at the council on foreign relations. And again, he is the author of the terrific book failure to adjust. How Americans got left behind in the global economy. Thanks journey dead. Great to be with Jim. Thank you. Please. Subscribe to the presence inbox on apple podcasts or you. Get your podcast while you're at it leave review, they help us. Get noticed opinions expressed in the presence inbox. So those the host or guests, none of far which takes no institutional positions. Today's episode was produced by Kevin Liz, Rosa, senior producer. Jeremy surely, Dan, mud was recording. Engineer. Thanks, Dan special. Thanks, go out to Corey Cooper. So fear Elise in Gabrielle Sierra for their systems. This is Jim Lindsey. Thanks for listening.
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