On Trade, Obama Faces a Tough Political Dance

In pursuing its lofty international trade agenda, the Obama administration has been courting labor unions, long the strongest supporters of the president but also perhaps the strongest skeptics of expanded free trade.

That makes the courting of labor on trade issues a tough political balancing act for the White House as it seeks a signature economic achievement for President Barack Obama’s second term: The administration must defuse labor’s fierce opposition to bring congressional Democrats on board. ut in pressing for new free trade deals the White House doesn’t want to drain enthusiasm, and depress voter turnout, from a major Democratic bloc in the upcoming midterm elections.

At stake are two trade pacts, the Trans-Pacific Partnership and a Transatlantic Trade and Investment Partnership, as well as fast-track trade authority, the congressionally-granted power that would help speed completed trade agreements through Congress.

Despite the outreach to unions, labor leaders don’t seem assuaged.

“The American labor movement continues to engage in a dialogue with the Obama administration,” said AFL-CIO president Richard Trumka in a recent speech about trade policy. “But make no mistake about it, old-style trade deals that put Wall Street first and workers last are goners, no matter what kind of rhetoric their advocates toss around.”

Michael Froman, the U.S. trade representative and a former White House economic aide, is highlighting labor’s role in the ongoing negotiations over TPP and TTIP and has launched new advisory committees to give unions a bigger role in the process.

“Labor is a critical group of stakeholders for us in these negotiations,” Froman told the House Ways and Means Committee last week.

He noted 23 union presidents serve on the USTR’s labor advisory committee, and four union leaders serve on the president’s advisory committee on trade policy. “And they’ve had tremendous input from the beginning, not only on the labor chapter but on other chapters: state-owned enterprise chapter, rules of origin, market access issues,” Froman said. “And we’re still in the midst of negotiating many of those issues, but we have tried very hard to take into serious consideration and to negotiate successfully on behalf of those issues.”

Advising the negotiators and having a deeper impact on any final agreements are two different things, however.

Froman, traveling in Japan this week, did not respond to a request for comment, nor did several unions, including the AFL-CIO. The Teamsters union declined comment.

Earlier this year, Trumka complained in a letter to every member of Congress that despite the USTR’s assertions, unions had not been adequately consulted through the TPP negotiations, which Froman has said should conclude this year. That criticism likely prompted the USTR to create a Public Interest Trade Advisory Committee and to expand the Industry Trade Advisory Committees to better include labor and other interests.

“There was some pretty specific criticism by the labor union movement about the lack of consultation, and Ambassador Froman’s efforts ramped up,” said Scott Miller, a senior adviser and Scholl chair in international business at the Center for Strategic and International Studies.

Miller noted the administration has previously successfully won labor support in the trade arena. After the Obama administration modified the U.S.-Korea free trade agreement, originally negotiated during the George W. Bush administration, the United Auto Workers gave its approval. “I think they’re building on that success,” Miller said.

Lori Wallach, who heads Public Citizen’s Global Trade Watch and is a frequent ally of unions on trade policy, said the Obama administration needs to do more to woo labor.

“If the Obama administration is sincere about getting support from Democratic base organizations, they’re going to need to change the content of the agreement, so they don’t undermine those organizations’ goals and agendas,” she said.

She said the TPP deal in its current, unfinished form includes investment rules that would promote off-shoring U.S. jobs, among other labor concerns.

But Froman and other cabinet officials argue the major trade deals could position the United States for jobs-fueling economic growth, especially in the manufacturing sector. That could lead to growth for unions, whose membership has been in decline for decades.

“I’ve been visited by several businesses, particularly from Europe, who’ve come and said the U.S. is a great market,” Froman told lawmakers last week. “When you complete these trade agreements — TPP and TTIP — the U.S. will have free trade, will have unfettered access to two-thirds of the global economy. That makes the U.S. the production platform of choice, it makes the U.S. the place where manufacturers want to put their next investment and produce stuff not just for this market but to send to Asia to Latin America to Europe.”

The administration’s trade agenda is unlikely to move on Capitol Hill before the midterm elections, largely because most congressional Democrats have no interest in taking on the highly charged issue in the run-up to November. But administration officials and trade proponents on Capitol Hill are teeing up potentially both fast-track and the TPP for movement in a lame-duck Congress or early in the next one.

Ways and Means Chairman Dave Camp of Michigan introduced a fast-track bill earlier this year. And Froman said recently that his office continues to work on the few remaining and difficult issues in the TPP deal.

But it makes for a difficult juggling act for the administration to press the issue against the wishes of labor unions, whose membership could make the difference in tight House and Senate races.

“The Obama folks are mindful that off-year election turnout tends to be low and when low, Democrats are hit the hardest,” said Alan Tonelson, a senior fellow at the U.S. Business and Industry Council who opposes fast-track authority. Tonelson recalled the 1994 midterm elections, which gave Republicans control of the House and Senate, after President Bill Clinton pushed hard for the North American Free Trade Agreement.

“A lot of union voters stayed home,” he said. “This time, they’re hoping to mollify labor leaders enough to encourage them to try to keep turnout up.”

The dicey politics among Democrats may explain why Obama so far has not made selling Congress and the public on fast-track and the TPP a major priority.

Tonelson isn’t the only one drawing parallels between today and the 1994 NAFTA debate.

During a recent speech to the liberal Center for American Progress, Trumka said the results of NAFTA have been “bad” for U.S. workers.

“And that’s why we cannot enact new trade agreements modeled on NAFTA,” he said. “It’s also why we cannot use an outdated NAFTA-style process for arriving at those agreements, especially not in an election year. I’m talking about fast-track negotiations.”