The List

Out of the Way, Congress

5 reasons U.S. lawmakers need to get on board with mega-regional free trade deals.

Last week, U.S. lawmakers took a critical step toward inking mega-regional free trade deals with Europe and 11 Asia-Pacific countries -- deals that could generate hundreds of billions in revenue and keep the U.S. economy inching along the path to recovery. But passage of the Trade Promotion Authority (TPA) bill, which would allow the president to fast-track free trade deals, is bound to involve a bitter political fight as several Democrats and members of the Tea Party have already lined up in opposition to the law. On the left, TPA raises the usual concerns for labor and the environment, while on the far right it presents one more opportunity to jam up the president. Across the board, lawmakers have raised concerns about transparency.

But without a trade promotion authority, which expired in 2007, the United States will be unable to finalize the Trans-Atlantic Trade and Investment Partnership (TTIP) and Trans-Pacific Partnership (TPP), neither of which can be fully negotiated without an authority in place. (Europeans and Asians have indicated they are unwilling to negotiate the thorniest trade topics before they know TPA is in place requiring the U.S. Congress to vote up or down on future deals, rather than amending freshly negotiated texts.) So even if Congress is justifiably angry about the unprecedented level of secrecy surrounding recent trade talks, it needs to see the bigger picture: TPA is critical for American economy, entrepreneurship, and global leadership. Here are five major reasons why:

Growth and jobs. The U.S. economy is recovering, yet headwinds lurk on the horizon -- from the Fed's unwinding to stagnating key export markets. Europe is battling low growth and high unemployment; Japan's Abenomics has yet to deliver promised growth gains, in part due to persistent protectionism that the TPP would undo; and China's economy is set to expand at its slowest pace in 15 years. While serious economic turmoil may have been averted, the trillion-dollar question remains: Where is global growth going to come from in the future? Trade is a key place to look: The TTIP is expected to generate an annual $130 billion in gains for the United States and $162 billion for Europe. The TPP, meanwhile, will boost U.S. annual gains by $77 billion and Japan's by $104 billion. As such, the TTIP will raise U.S. household incomes by $865 annually and create 750,000 new U.S. jobs, while the TPP would generate about $1,230 per household by 2025 -- a significant windfall without a dime of deficit spending, and a strong bonus on the $10,000 in average annual income gains American households have already scored due to post-war trade opening. And by locking in first-rate rules and open markets, the trade deals will give U.S. companies the confidence they need to dip into their $5 trillion in cash holdings -- enabling them buy American inputs and hire U.S. workers.

Geocommercial edge. As gatekeepers of markets with two-thirds of total global spending power, the TPP and TTIP will amount to giant magnetic docking stations for current outsiders, especially emerging and frontier markets. Most remarkably, China, the world's largest trader and a TPP skeptic, is seriously considering joining the deal, now seen by various domestic interests as a means to counteract the economic slowdown and drive much-needed reforms, especially of state-owned enterprises. Likewise, Brazil, the world's seventh largest economy, is being pushed by its business lobbies to consider the TTIP and TPP -- a 180 degree turn for a country that completely missed the global wave of trade integration. With Brazil opening, the long-awaited U.S.-led Free Trade Area of the Americas (FTAA) idea could eventually become a reality. The bottom line for Congress: Once done, the U.S.-led deals will forever alter the strategic landscape of the global trading system, with even some cantankerous BRICs falling in line. America will have positioned itself to set the tone and tempo of global trade politics for decades to come.

Digital economy gains. The old U.S. trade agenda -- immortalized in such deals as the North American Free Trade Agreement (NAFTA) and Central America Free Trade Agreement (CAFTA) -- prioritized corporate supply chains: It removed barriers to trade in parts, components, and final products; opened foreign markets for U.S. investors; and sped up customs procedures. These objectives still matter, but physical supply chains will be less critical as 3-D printing and nanotechnology expand. Manufacturers will increasingly be able to print parts and components right off the Web. Meanwhile, the arrival of the industrial Internet, e-commerce, e-invoicing, and online payments all mean that the global economy will increasingly run not on ships but on the cloud.

Few nations are as well-placed to profit from this new order as the United States. Yet barriers are sprouting. Countries such as TPP member Vietnam are forcing U.S. companies to locate servers in their nations as a pre-condition for market access, while Europeans, incensed about the Snowden scandal, are bent on limiting the data that U.S. companies serving European customers can access and transfer back to America. Too many developing nations are now cracking down on Web users for political and protectionist reasons. Ensuring a fair and unfettered digital economy requires enlightened rules on cross-border e-commerce and data flows, intellectual property protections, dispute settlement mechanisms, and so on. The TPP and TTIP offer Washington an opportunity to establish such rules. But unless Congress passes TPA, there will be no new rules -- at least not ones that are Made in the USA.

Boost for Main Street exporters. Big business may be spearheading the TPA lobby, but small businesses -- the backbone of U.S. economy -- also stand to gain. Giant corporations like Apple and GE still dominate U.S. exports, but small businesses are on an export roll, riding the wave of past U.S. trade deals like NAFTA: Some 300,000 small- and medium-sized enterprises (SMEs) collectively generate one third of U.S. exports. Study after study shows that these export-driven SMEs are the nation's fastest growing and most productive companies. They also happen to be among the most vocal of TPA proponents.

Moreover, as e-commerce, 3-D printing, nanotechnology, and other DIY technologies expand, Americans of all walks of life can become one (wo)man-multinationals -- designers, assemblers, and sellers of goods and services exported around the planet. This export opportunity will explode between now and 2025, as 5 billion new Internet users log-on across the developing world. In the process, millions of new American jobs can be created and thousands of new businesses launched -- but only if smart trade rules are established that open markets and level playing fields globally. The mega-regionals are a perfect venue to start this process. 

Restore American leadership. The United States has for decades been the world's quarterback, brokering differences between nations and providing critical global public goods: a global reserve currency, deep financial markets, vigorous economic growth, and an open trade regime. Today, the devastating financial crisis, disappointing growth, and plain-dumb bickering over the budget risk making "American leadership" an oxymoron. For an administration that campaigned on renegotiating NAFTA and pausing the George W. Bush administration's vibrant trade agenda, the TPP and TTIP represent a stunning about-face -- and the best chance for America to regain its global leadership role.

It's time lawmakers stop framing trade agreements as Trojan Horses that ship American jobs abroad, and start advocating for trade deals as instruments to secure an open and rules-based global trading system -- and to unshackle and empower U.S. companies, small businesses, and garage entrepreneurs to drive America's economic recovery.

David McNew/Getty Images

The List

The Year America’s Post-9/11 Foreign Policy Failed

And the nine other top foreign policy headlines of 2014.

2014 promises to be an extremely active year for foreign policy news. Here are some of the headlines you can expect to see during the next twelve months:

1. The Pillars of America's Post 9/11 Foreign Policy Crumble

By the end of 2014, America will have left Afghanistan and the country will quickly revert to the state of chaos, criminality, and brutality that marked its condition before our arrival. This is the conclusion not just of opponents of U.S. intervention in that country, but of the U.S. intelligence community. According to a recent assessment incorporating views of 16 different U.S. agencies, reported in the Washington Post, by 2017 major deterioration can be expected on the ground, including big gains for the Taliban, one of the two principal enemies targeted in our post 9/11 response.

The other group targeted after the attacks on the World Trade Center and the Pentagon, al Qaeda, will, by more than one measure, be stronger than it has ever been. While it must be acknowledged that the "al Qaeda" brand name has been embraced by a wide array of far-flung extremist groups that have tenuous ties at best with the original organization established by Osama bin Laden, the fact that there are so many more groups willing to adopt the group's name and tactics today than there were when the war on terror started is unsettling to say the least. From Mali, across North Africa, to Syria, the Arabian Peninsula and into Afghanistan and Pakistan, it has been proven that decapitating the bin Laden organization has not reduced the appeal of the al Qaeda model among armed extremists.

The fact that these groups foster instability, promote extremist views, and periodically target U.S. assets as well as those of our allies, is what makes them so dangerous, rather than merely the evocative nature of their names and putative associations. What's more, even the head of the National Counterterrorism Center says there are more terrorists in Iraq today than were found there at the previous peak of 2006. (Indeed, one of the underreported stories of 2013 was the relentless nature and appalling toll of terror attacks in that country. 2014 should see these attacks and their tolls continue, perhaps even escalate.) And there are more in Syria than Iraq. Add to this groups in the Arabian Peninsula, across Africa, in Central Asia, and those remaining in AfPak and you likely today have more self-proclaimed radical Islamist groups than at any time in history. There is no reason to assume, given the conditions that foster the growth of such groups, that these numbers should do anything but grow in 2014.

The three pillars of America's most expensive extended overseas conflict effort -- wars in Afghanistan, Iraq, and against Islamic extremists -- all may be viewed as having completely lost in terms of advancing U.S. long-term goals with regard to each. Of course, there were broader goals of America's "War on Terror" and our post-9/11 initiatives in the Middle East. We sought to make the region safer. And we sought to improve America's standing. And yet, from Tunisia to the Hindu Kush, more of the Greater Middle East is fraught with scenes of regular violence or building tension than at any time in modern memory. 

At the same time, we enter 2014 with American relations with our three most important allies in the region of the past three decades -- Egypt, Israel and the Gulf States -- in very fragile condition. We are seen as having been weak and vacillating regarding intervention in Syria, deaf to the cruelly worsening humanitarian crisis there, limp and indecisive regarding Egypt, insensitive to the concerns of our Gulf Allies with regard to either Iran or the Muslim Brotherhood, and generally more eager to get out of the region than we are to take further risks or make further long-term investments there.

2. U.S. Economic Recovery Will Lead the World but Prove a Double-Edged Sword

Coming off comparatively robust growth at the end of 2013, the U.S. economy is poised to continue demonstrating top-line strength (GDP growth) through 2014. Indeed, the United States is almost certain to lead the world's biggest developed economies in growth through the year, restoring much U.S. soft power, shrinking the U.S. deficit, and attracting more international investment to the United States. For the rest of the world, the downside is that this will almost certainly produce more tapering from the Federal Reserve Bank, under new leadership in 2014. This, in turn, by draining liquidity from the international system, is likely to hit those countries most buoyed by the stimulus sugar high of the past few years -- notably big emerging economies like Brazil, India, and Turkey. In Turkey and India this could lead to political leadership changes which, in the case of Turkey, may be uglier before the changes and in the case of India will likely get ugly only after the new government's biases shape its policies. In Brazil, President Dilma Rousseff is likely to hold on in elections unless economic conditions deteriorate faster than expected.

The big economic story outside the United States will, however, be China. Can it continue to grow and gradually deflate the bubbles that threaten the economy while the government also takes a tougher stance on rampant corruption? Expect 2014 to see more Chinese leaders embroiled in corruption scandals and complaints from Chinese citizens to grow that those at the center of the leadership remain beyond the reach of the law.

3. A Breakthrough Deal with Iran on Nuclear Weapons Is Struck

It may not happen within the initial six-month negotiating period specified during breakthrough Geneva talks, but it is likely that during 2014, the United States, Russia, and other leading powers will finalize an agreement with Iran that will stop for the moment its nuclear weapons development program. The incentives for Presidents Barack Obama and Vladimir Putin as well as the Iranians are strong enough to keep all parties engaged until they find a way forward. For the Iranians, the price is small and the payoff is relatively large; they will get economic relief, be welcomed back into the international community, and very likely receive significant aid with their civilian nuclear energy efforts. For Obama especially, given problems at home and the factors cited above, the win couldn't be more important and his diplomatic team has been doing yeoman's work to set the stage for it. 

Of course, the deal will make Israel and the Gulf States nervous but they are already coming to grips with the idea that it's inevitable. While they don't trust the Iranians -- nor should they -- it's hard to argue that a verifiable pause in Iran's race to gain nuclear weapons capability is not in their interests.

4. New NSA Revelations and Escalating Cyber Attacks Continue

The U.S. intelligence community continues to wait nervously to see which of the unreleased revelations of Edward Snowden will be the most damaging. Yet despite the degree to which 2013 rocked their world, many among them expect 2014 to be even worse. They know that it's only a matter of time before the full scope of U.S. hacking into international systems is revealed (big new stories on this point are only days and weeks away). This in turn is likely to increase backlash against U.S. companies and national interests worldwide. And it will almost certainly produce louder calls for reform in Washington. That said, don't expect the president or the Washington community to embrace anything as sweeping as the reforms recommended by the president's own panel late in December 2013. That group did a good job...but 2014 is likely to show that the White House encouraged them to be bold so that when it embraced somewhat less extensive reforms it would be seen as "protecting" national security interests, a much more politically defensible position. 

Meanwhile, with each day, more cyber attacks will take place, many emanating not from governments but from criminals and rogue hackers, some emulating the Snowden and Assange "agendas" others just intent on wreaking havoc. Almost certainly 2014 will eclipse 2013 as a year in which security, privacy and the inadequacy of government thinking on the principles that should be underlying our policies will come into even starker focus.

5. Syria and Israel-Palestine Peace Initiatives Will Falter

While Secretary of State John Kerry will continue his tireless and frankly, heroic efforts to pursue not just the Iran deal but also a negotiated peace in Syria and a resolution to the Israel-Palestine conundrum, 2014 will likely see frustrations in both. The problem in Syria is that even if a power sharing arrangement might be struck between some Alawite successor to the Assad regime and some of the country's more moderate opposition group, it would be unlikely to be accepted by the extremists who see the no man's lands of the Syrian civil war as just the kind of eco system in which they thrive and who have zero incentive to cut a deal. 

In the case of the Israel deal, while an accord may be struck between the Israelis and the representatives of the Palestinian people -- and that is, of course, a long-shot -- it seems very unlikely to be realizable given the divides between the Hamas-led factions in Gaza and the "official" Palestinian representatives. 

6. and 7. The Winter Games in Sochi and World Cup Again Prove Hosts Are Not Always Winners in Big Sports Events

With Russia already on edge over terror attacks leading up to the Sochi Olympics and Brazil sweating out construction setbacks and cost-overruns in the months before the World Cup comes to that country, leaders in both countries must be wondering aloud who persuaded them hosting such events was a good idea. Both will, of course, produce compelling athletic stories but both are also likely to be tainted. In the case of Sochi, this will mean smaller than desired crowds, tough, visible enforcement measures, and, probably, sadly, more terror attacks. In the case of the World Cup, expect more cost overruns, more crime, more traffic delays, and, worst of all for Brasilia, for the Brazil national team to fail to win the cup. (Note: It's hard not to root for Brazil, given their history with "the beautiful game." Just being realistic here.)

8. Fighting in Africa Escalates on Multiple Fronts -- World Looks the Other Way

From South Sudan to the Central African Republic, from Somalia to the Congo, from al Qaeda in Mali to Boko Haram in Nigeria, blood will be spilled in Africa in quantities that is likely to make all the world's other upheavals -- with the possible exception of Syria -- look lesser by comparison. Periodically Western powers will intervene. But more frequently, as has recently been the case with the United States and France, they will seek alternatives to intervention. Sending videos of senior White House officials calling for restraint (as the United States did in South Sudan) and explaining why, unlike the French, they can't be the policeman for Africa, will only serve to underscore the big and enduring story about Africa: those who can help are content to look away. For an Obama team with stated strong commitment to Africa, this is likely to be a legacy issue they will do their best to sweep under the rug. 

9. Overemphasis on Diplomatic Deliverables to Be Revealed as Deeply Flawed Mideast Strategy

While focusing on what can be done is better than doing nothing in the Middle East, focusing on tactics required to achieve politically resonant diplomatic deals (or troop withdrawals) will fall far short of the kind of overall strategic approach to the region required by U.S. foreign policy or by the community of leading international actors. Tensions throughout the region will likely only deepen.

For example, to eliminate chemical weapons in Syria but to fail in every other respect to address the brutality and regional risks associated with that country will not reflect well on the United States. To hammer out a deal with Iran on nuclear weapons, but in so doing to empower a regime still committed to the destruction of U.S. allies (as well as to directly countering U.S. influence and that of our allies in the region), cannot be seen as a success for the same reasons. (Expect to see growing pleas for more effective humanitarian intervention in Syria as conditions worsen.) And to negotiate an Israel-Palestine deal without effectively addressing the related challenges associated with Egypt, unrest in the Sinai, deterioration in Lebanon and Syria, etc., and the worsening of not just Sunni-Shiite tensions in the region but Sunni-Sunni stresses as well, also must be seen as potentially setting up a hollow-short lived victory. The same must be said for achieving a peace there without providing sufficient funding for creating genuine, lasting organic economic growth in a new Palestinian state -- something that has yet to be seriously discussed or even analyzed. Finally, without a strong, shared vision between the United States and moderate regional allies, a United States that is inevitably (no matter what the politicians and diplomats say) leaning away from the region, will be unable to advance its views or see its interests preserved. The undercutting of historic ties during the past year cannot be made up for via a thaw with Iran or cooperation with Russia or simply getting more troops out of the region. A new plan for strategic cooperation with those leaders and governments whose views most track with ours (and none will do so perfectly) is both essential and, at the moment, missing.

10. In U.S. Politics the Big Winner Will Be...

The incumbent always has the edge in U.S. politics. This is because the incumbent is better known. It is also because thanks to campaign finance laws being a sophisticated formula for white-collar corruption and gerrymandering and other rules tipping the playing field, the system is rigged. That's why incumbents usually win... and it is why of all the incumbents in Washington, the most important one is inertia. Oh sure, there'll be headlines leading up to this year's midterm elections but in the end, the Republicans will continue to control the House, the Democrats will continue to control the Senate, the White House will continue to blame lack of progress on the Hill, the Hill will blame it on the White House, needed reforms won't happen, necessary oversight will be neglected and everyone will start getting excited about 2016's presidential campaign way, way too early.       

Noorullah Shirzada/AFP/Getty Images