WASHINGTON — President Barack Obama is aggressively pushing an ambitious agenda to liberalize global trading.
But already political trade wars are forming, and they’re with fellow Democrats rather than with Republicans, his usual antagonists. Obama is promoting free-trade proposals with Europe and Asia that could affect up to two-thirds of all global trade.
The ambitious deals would reduce or eliminate tariffs and other trade barriers. But there’s trouble ahead for both the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership — at the negotiating table and from Congress.
The deal with Europe will be a top item this coming week in Northern Ireland at the Group of Eight summit of major industrial countries. The Asia pact was brought up pointedly by the new Chinese president, Xi Jinping, in his California meetings with Obama last weekend.
Republicans historically have supported free-trade agreements far more than have Democrats, and a politically weakened Obama may not have enough second-term clout to successfully twist the arms of enough Democratic lawmakers.
Some Republicans who usually vote for easing trade barriers may vote “no” just because the agreements will bear Obama’s signature. Both deals generally have the support of U.S. businesses. But labor unions and human rights and environmental groups — core Democratic constituencies — have so far viewed them cynically.
These organizations, and Democrats in general, say that free-trade deals can cost American jobs and lead to environmental and workplace abuses that would not be tolerated in the U.S. “We certainly have concerns,” said Celeste Drake, a trade and policy specialist at the AFL-CIO, the nation’s largest labor federation. “I think Obama realizes this problem about Republicans always being the big supporters (on trade liberalization) and he would like to have our support. But overall we’re skeptical. We wish we’d see more.”
It’s not a new problem. President Bill Clinton powered the U.S.-Mexico-Canada North American Free Trade Agreement through Congress in 1993 only by heavily courting Republicans and overcoming stiff Democratic opposition, including from House Democratic leaders and unions.
As he campaigned for president in 2008, Obama courted blue-collar votes by criticizing NAFTA. Since then, he’s changed his tune. Obama worked to overcome Democratic resistance to win passage in 2011 of trade pacts with South Korea, Panama and Colombia, completing negotiations begun by his Republican predecessor, President George W. Bush.
The talks for a new Asia-Pacific free-trade zone came up in the Obama-Xi meetings last weekend. At first, the deliberations involved the United States and 10 Pacific Rim nations: Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. More recently, Japan has sought to join the talks, drawing the keen interest of the Chinese leader. Until now, China hasn’t been included in the process.
“We have a half-a-trillion-dollar-a-year trade relationship with China,” said Tom Donilon, Obama’s national security adviser. “President Xi’s point … was that the Chinese would like to be kept informed and have some transparency into the process.”
But the possible inclusion of Japan, the third-largest economy, after the U.S. and China, generated heat from auto-state lawmakers, who criticized Japan’s efforts to restrict auto imports. Democratic Sen. Debbie Stabenow pledged to fight ratification if Japan won’t “stop blocking American companies from its markets.”
Michael Froman, a White House international economics adviser nominated to be the next U.S. trade representative, said the auto industry concerns are “well-founded” and he suggested they would be addressed.
Backers of a sweeping U.S. trade deal with the 27 European Union countries hoped to get an enthusiastic sendoff from the G-8 summit in Northern Ireland on Monday and Tuesday. British Prime Minister David Cameron, the host, has made trade liberalization a priority, and many European nations are hoping the promise of expanded trade will help reverse Europe’s spreading recessions.
“An EU-U.S. trade deal could add tens of billions to our economies,” Cameron told reporters. “Everything is on the table, with no exception.” But there already are serious divisions in Europe. Despite Cameron’s and Obama’s assertions that everything should be on the table, the European Union Parliament bowed to strong French concerns and recently voted to exclude TV, movies and other cultural “audiovisual services” from the trade talks even before formal negotiations begin next month.
France stuck to this “cultural exception” at a meeting of the EU members in Luxembourg on Friday. Also, some members of the European Parliament are urging that data protection provisions be made a key part of the negotiations — in response to recent disclosures of widespread snooping by the U.S. intelligence community on telephone and Internet communications at home and abroad.
Other potential roadblocks include longstanding arguments over genetically engineered food and other agricultural issues, as well as “Buy American” provisions in recent U.S. legislation, climate change and a squabble over government subsidies involving plane makers Boeing in the U.S. and Airbus in Europe.
“Both sides know that they need to work very hard,” said Philipp Rosler, vice chancellor of Germany and minister of economics and technology. “And only if the people understand that, and only if we don’t end up just having discussions on tiny details — like chickens — only then will we have the opportunity of not only negotiating, but also of concluding a good agreement,” Rosler told a conference at the Brookings Institution, a U.S. think tank.
Obama, with the backing of Michigan Rep. Dave Camp, the Republican chairman of the House Ways and Means Committee, is also pushing for renewal of an expired law that allowed the White House to submit trade deals to Congress for a straight yes-or-no vote without amendments.
“This is a Congress that’s pro-trade. But it’s also highly polarized,” said James Thurber, a political science professor at American University. “Business has been pushing these trade deals for a long time. Labor has not. So that splits things in a difficult manner for Obama.”
“He’s got people who don’t want him to win on anything. And then he’s got some people from labor who are skeptical about expansionistic trade policies and their effect on the workforce here,” Thurber said. “So it will be tough.”