Analysis: White House hopes for fast-track trade hit political tangle

WASHINGTON Thu Jan 30, 2014 9:30pm EST

U.S. Senate Majority Leader Harry Reid (D-NV) speaks to reporters after the weekly Democratic caucus luncheon at the U.S. Capitol in Washington, January 7, 2014. REUTERS/Jonathan Ernst

U.S. Senate Majority Leader Harry Reid (D-NV) speaks to reporters after the weekly Democratic caucus luncheon at the U.S. Capitol in Washington, January 7, 2014.

Credit: Reuters/Jonathan Ernst

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WASHINGTON (Reuters) - President Barack Obama's push for authority to fast-track trade deals has hit a big setback in the form of opposition from his top fellow Democrat in Congress, but it is far from dead.

Senate Majority Leader Harry Reid's warning to policymakers on Wednesday "just to not push this right now" reflects concern about the domestic political agenda ahead of November's congressional elections, when free trade could be a damaging issue for many Democrats.

The unusually blunt public opposition came less than 24 hours after Obama noted the need for fast-track power in his State of the Union address, albeit less forcefully than business lobbyists and pro-trade Republicans would have liked.

The White House called Reid's office shortly after his comments to voice displeasure, a top Democratic party aide said.

"They were really upset," the aide said. But the aide said the White House did not try to get Reid to shift his position.

A bill before the House and Senate would grant the White House power to submit free trade deals to Congress for an up-or-down vote without amendments, something that would give trading partners peace of mind but that raises hackles among some lawmakers.

Add to that the genuine mistrust among some Democrats about the impact of trade deals on local jobs and industry and environmental standards, and it's a volatile mix.

With two major free trade deals hanging in the balance, the U.S. administration now faces even more pressure to win over skeptics on both sides of politics to pass trade promotion authority (TPA) as the electoral clock ticks down.

"Reid's put a strait-jacket on TPA for now," said Welles Orr, trade adviser for law firm Miller Chevalier and former congressional relations expert at the U.S. Trade Representative.

Aides insist that Reid, who controls what comes up on the Senate floor, has not decided to kill the bill but is not ready to embrace it either and has let the White House know he will not be an easy sell.

That leaves the White House with a tough decision on how much political capital to expend lining up support on a politically contentious measure ahead of the elections.

U.S. Trade Representative Michael Froman and his staff are lobbying lawmakers about the benefits of TPA and proposed trade pacts with Pacific Rim countries and the European Union, which would cover nearly two-thirds of global trade.

But he clearly has further to go.

"I'm with Harry on this," said Democratic Senator Sheldon Whitehouse of Rhode Island.

"There is all sorts of mischief that gets snuck into these trade agreements. We have seen real damage to our manufacturing sector as a result of them," Whitehouse said. "Allowing fast-track lets them get through Congress without proper scrutiny."

Reid's stance also struck a chord among some Republicans, who are generally more aligned with free trade than Democrats.

"I seldom agree with Harry, but this may be one time," said Republican Senator Lindsey Graham of South Carolina. "I've got concerns about it."

UNDER PRESSURE

For trading partners, especially in Asia where negotiators had hoped to get agreement on the Trans-Pacific Partnership by the time Obama makes a trip to the region in April, the political uncertainty complicates an already-tight timeline.

Tacticians now have the option of pushing ahead with the TPA bill in the House, although it is currently lacking a Democrat co-sponsor; waiting for amendments to toughen up the negotiating objectives and make it more palatable to critics, or waiting for the administration to make greater effort to lobbying skeptics.

"They (the White House) have an opportunity to make its case. They should do that," another Senate Democratic leadership aide said, noting that fast track should not be considered dead in the Senate.

Despite differences on trade - the second aide said Reid "hasn't seen a trade deal that he has liked in a long time, if ever" - the Nevada senator has been perhaps the White House's most important ally in Congress.

In the past year alone, he has changed Senate rules to win confirmation of stalled Obama nominees and taken a lead in trying to ease Democratic outrage over the White House's botched rollout of its key healthcare law.

Part of the push-back may be a tactic to gain distance from a president whose popularity suffered in the wake of Obamacare, according to CNN/ORC and Gallup polls.

Matthew Green, associate professor of politics at the Catholic University of America, said Reid would not want to make his members take a difficult vote on a bill that subsequently would die in the House, risking their support for nothing.

"The control of the Senate is very much up for grabs. So I'm sure Reid is thinking, how might trade legislation help or hurt his most vulnerable members who are running for re-election?" he said.

Even if the bill does not pass in its current form, several leading Democrats, including the likely next chair of the Senate Finance Committee, Ron Wyden, have suggested they may back tweaks that could boost its chances of success - something Reid might have in mind as well.

"He's strengthening the hand of his colleagues who want a more protectionist version of the bill," said Daniel Ikenson, director of the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute.

"I'd expect a competing bill to surface soon and then, hopefully, eventually, a compromise," he said.

(Reporting by Krista Hughes and Thomas Ferraro; Additional reporting by Roberta Rampton, Mark Felsenthal, David Lawder and Steve Holland; Editing by Ken Wills)

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Comments (7)
Pete_Murphy wrote:
We don’t need any more “fast-track” trade deals. If anything, we need to derail that train.

Since the signing of the Global Agreement on Tariffs and Trade in 1947, America has been steadily transformed from a net exporter and the world’s pre-eminent industrial power into a virtual skid-row bum, begging the world for cash to finance 38 consecutive years of trade deficits, now totaling a cumulative $12 trillion. It’s no mere coincidence that that figure closely matches the growth in the national debt during the same time frame.

The free trade concept upon which America’s trade policy is founded is fatally flawed because it fails to account for the inverse relationship between population density and per capita consumption. When two nations grossly disparate in population density attempt to trade freely with each other (as in the case of trade between the U.S. and China, Japan and Germany, just to name a few), the work of manufacturing is spread evenly across the combined labor force, while large disparities in per capita consumption remain. The inevitable result is a shift in manufacturing jobs toward the more densely populated nations and a trade deficit for the U.S.

The time has come for the U.S. to reclaim the right to manage trade in its own best self-interest, making sensible use of tariffs to assure a balance of trade in those situations where free trade is a sure-fire loser.

Pete Murphy
Author, “Five Short Blasts”

Jan 31, 2014 6:02am EST  --  Report as abuse
Des3Maisons wrote:
There’s a good reason why the Trans-Pacific Partnership has been negotiated in secret. If anybody thought NAFTA was a disaster they haven’t seen anything yet. The TPP embraces all of the worst of NAFTA plus a lot more. It’s all about putting as much money as possible into the pockets of corporations at the expense of everybody else that it touches, besides being an environmental disaster. This trade agreement is so bad even some Republicans are stepping forward with reservations so you know it has to be really bad.

How telling that Reuters failed to inform their readers why there is so much opposition to the TPP.

Jan 31, 2014 8:46am EST  --  Report as abuse
COindependent wrote:
That giant sucking sound of American jobs being replaced with cheap foreign goods with little in return. We open the largest economy n the world to countries who have the purchasing power that is a fraction of what we make available to them.

Typically, a second term President has the first two years to drive an agenda. After the mid-term elections he is just a placeholder. In the case of this President, he went lame almost immediately after the elections, with a suite of domestic and foreign policy failures that would embarrass a normal person.

It’s only reinforced by the fact that the members of his own party are heading for the escape hatches, and our allies are let him go into voicemail. He is incapable of leadership–and the country would be better off if he spent more time in Hawaii, working on his March Madness bracket, and left the decisions to the adults in the room.

Jan 31, 2014 9:37am EST  --  Report as abuse
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