Lobbying over a proposed South Korea free-trade agreement has escalated as President Barack Obama seeks to iron out differences over the pact, which has stirred up an array of opponents, including labor unions and U.S. auto giants.
The president has seized on the pact, first negotiated by the George W. Bush administration, as a way to reach out to newly empowered Congressional Republicans who have traditionally embraced free trade. He hopes to resolve outstanding issues this week when he meets with South Korean President Lee Myung-bak on Thursday at the Group of 20 summit in Seoul.
But even if Obama is successful, there is no guarantee that the trade pact will be a slam dunk on Capitol Hill. Ford Motor Co. and Chrysler Group LLC are opposed unless a provision related to automobiles can be changed to make it easier for U.S. exports to enter the South Korean market. American beef producers are worried about South Korean limits on U.S. exports of beef from cattle that are less than 30 months old. Organized labor, which spent tens of millions of dollars defending Democrats in the recent elections, fears the agreement will hasten the exodus of manufacturing jobs from the United States.
Those who are working on the matter say they can’t predict how lawmakers will respond to the measure if, as expected, it is punted to the new Congress next year.
“There are extremely difficult issues for both sides,” said Scott Parven, who is leading a team at Akin Gump Strauss Hauer & Feld, which is lobbying for the trade agreement on behalf of the South Korean government.
Parven’s speciality is working with the Blue Dog Coalition of fiscally conservative Democratic lawmakers, who often break with the liberals in their party and support trade agreements. But many of these moderates were defeated in last week’s midterm elections and will be replaced by Republicans. Parven said it is unclear whether incoming lawmakers who were backed by the tea party movement will be as receptive to trade agreements as the establishment, pro-business wing of the Republican Party.
“We will not know until it is on the floor. It makes it a bit mangy. You just don’t know,” he said. Parven added that some may favor free-trade pacts because they bring down tariffs, which some people view as akin to taxes.
But a new poll released Tuesday by the Pew Research Center found that support for free-trade agreements among Republicans had fallen to 28 percent, from 43 percent in November 2009. The survey of 1,255 adults polled from Thursday to Sunday found that Republicans and Republican-leaning independents who agree with the tea party have a particularly negative view of the policies of the World Trade Organization and such pacts as the North American Free Trade Agreement, with fewer than one in four saying they have been a good thing for the country. The survey found that Democrats and independents overall had a more favorable view of these free-trade pacts.
The poll also found that 45 percent of all respondents said that increased trade with South Korea would be good for the United States, while 41 percent said it would be bad.
The South Korean government has been bracing for a fight by beefing up its lobbying and public relations efforts in Washington, according to documents filed with the Justice Department under the Foreign Agents Registration Act. It hired three firms — Singer Bonjean Strategies, the Glover Park Group and Edelman — in September to work on communications issues, including online advocacy of the free-trade pact, and the Fratelli Group was retained earlier in the year to work on the issue.
Akin Gump, which proposed a monthly fee of $50,000 plus expenses for its services, has tapped some of its most politically connected advisers to work on the issue, including former Reps. Vic Fazio (D-Calif.) and Bill Paxon (R-N.Y.), according to the documents filed with the Justice Department.
Under the terms of engagement between Akin Gump and the South Korean government, which was filed with the Justice Department in August, the firm said, “We will ensure you have opportunities to meet key leaders in the White House and in Congress through both social and official channels.”
The firm also plans to engage outside organizations that specialize in national security. “Our goal is to create an ‘echo chamber’ of national security experts who all agree that the U.S. must quickly ratify the” South Korea free-trade agreement, the plan stated.
Additionally, more than 800 companies and trade associations seeking to promote the trade pact have formed the U.S.-Korea FTA Business Coalition, an offshoot of the U.S. Chamber of Commerce’s U.S.-Korea Business Council. The business council’s steering committee is chaired by the executives from Boeing Co., Chevron Corp., Pfizer Inc., Goldman Sachs Group Inc. and Citigroup Inc. Other steering committee members include the Advanced Medical Technology Association, AT&T Inc., the American Council of Life Insurers, the Business Roundtable, Caterpillar Inc., Microsoft Corp., the Motion Picture Association of America, the Pharmaceutical Research and Manufacturers of America, Time Warner Inc., and United Parcel Service Inc.
Christopher Wenk, a trade expert at the Chamber of Commerce who is coordinating the South Korean trade effort, said the coalition will ramp up its efforts to sell the pact on Capitol Hill after Obama reaches an agreement.
“We are planning a very aggressive game plan,” Wenk said. The effort will include advertising and outreach to Washington lawmakers, one-third of whom have never voted on a trade pact, he added. Congress last approved a trade pact, with Peru, in 2007.
Other groups have already been trying to influence the trade agreement talks. Ford ran print ads last week, both in inside-the-Beltway publications and in newspapers in auto manufacturing states, opposing the agreement in its current form because it does not sufficiently address South Korea’s limits on U.S. autos.
“For now, we’re laser-focused on how the U.S. government can negotiate changes to this FTA,” Ford spokeswoman Christin Baker said. The company has also been “communicating with key voices in House and Senate leadership, the Ways and Means Committee, Senate Finance Committee and others that are advocates for free-trade agreements that truly open foreign markets to American exports,” she added.
Baker said Rep. Dave Camp (R-Mich.), the presumed next chairman of the House Ways and Means Committee, has been sympathetic to the automakers’ concerns, as has Rep. Kevin Brady (R-Texas), the expected chairman of the panel’s trade subcommittee.
One U.S. carmaker that has stayed out of the fight is General Motors Co., which owns operations in South Korea.
“GM is a global automaker that historically builds in the markets it sells vehicles. We also leverage our global manufacturing and engineering footprint as a competitive advantage,” GM spokesman Greg Martin said. “As such, GM remains neutral on the Korean free-trade agreement.”
The trade pact is almost certain to cause tensions between Obama and organized labor, which has long been suspicious of trade agreements.
Earlier this year, AFL-CIO President Richard Trumka criticized the proposed pact with South Korea, saying it “would exacerbate our already lopsided trade relationship with South Korea, putting at risk thousands of good U.S. jobs in the auto, steel and other industrial sectors.”