Trade Deals Wed Obama to Republicans as Democrats Vow to Oppose

President Barack Obama won a standing ovation when he called in his speech to Congress last week for lawmakers to approve stalled free-trade agreements with South Korea, Colombia and Panama. The cheers came from the Republican side of the chamber.

“He got virtually the entire Republican party to stand up on that,” Representative Darrell Issa, a California Republican who has challenged the administration’s policies, said in an interview after the Sept. 8 speech on jobs. “On their side, only a dozen or so stood up. That’s where the president’s problem is.”

Victory for Obama on the trade accords may require the votes of most Republicans, who have opposed him on issues from health care to increasing the federal debt ceiling. That’s because some of the president’s fellow Democrats won’t support deals they say would cost jobs and fail to protect workers in other countries, Bloomberg Government reported.

“That’s something he really hasn’t faced before,” Doug Irwin, an economics professor at Dartmouth College in Hanover, New Hampshire, who served as an economist in the Reagan administration, said in an interview. “He’s relying on support from Republicans, who have vociferously opposed him on most of his other initiatives, and his Democratic allies in Congress are recalcitrant and don’t want to do this.”

Representative Mike Michaud, a Maine Democrat, “will work to build the broadest coalition possible” to oppose all three agreements, spokesman Ed Gilman said in an e-mail. Michaud heads the House Trade Working Group, a coalition made up mostly of Democrats who question the value of free-trade accords.

Clinton Accord

There is a precedent for Obama’s predicament. Democratic President Bill Clinton, who succeeded in passing the North American Free Trade Agreement (MXTBBAL) in 1993, needed support from a majority of Republicans in the House and Senate because most Democrats wouldn’t back the pact. More than three quarters of Republicans in each chamber voted for the accord with Mexico and Canada (TBBLCNDA).

In the House, 102 Democrats voted for the deal, compared with 156 who voted against it. In the Senate, 27 Democrats supported the accord, while 28 opposed it and one didn’t vote.

Obama has urged Congress to act on the South Korea (KOTRBAL), Colombia and Panama agreements negotiated during President George W. Bush’s administration, saying they will spawn export- related jobs as his administration works to reduce the 9.1 percent U.S. unemployment rate.

The South Korea deal, the biggest for the U.S. since Nafta, would boost U.S. exports by as much as $10.9 billion in the first year in which it’s in full effect, according to the U.S. International Trade Commission. The accord with Colombia (TBBLCLMB) would increase exports by as much as $1.1 billion a year.

The U.S. Chamber of Commerce says the trade agreements will prevent the loss of 380,000 jobs. The AFL-CIO, the nation’s largest labor federation, says they will lead to a decline in U.S. manufacturing as jobs go abroad.

Changes Negotiated

During Obama’s first two years in his office, his administration refashioned the accords in an effort to broaden support among Democrats and soften opposition from unions.

He negotiated new terms for auto tariffs in the South Korea deal that won over the United Auto Workers union, an agreement on exchanging tax information with Panama and labor-rights assurances from Colombia.

Obama also refused to submit the trade agreements to Congress unless he got a commitment for approval of extending a program, known as Trade Adjustment Assistance, that augments health and unemployment benefits for workers who lose their jobs to overseas competition. The worker aid is popular with Democrats.

Obama and Republicans deadlocked over the aid issue in June and July. Republicans led by Senator Orrin Hatch of Utah said the assistance, which was expanded in the 2009 stimulus measure, was unaffordable and inefficient.

Procedural Differences

“It’s a testament to today’s partisanship that procedural differences have held up the free-trade agreements this long,” John Murphy, vice president of international affairs at the U.S. Chamber of Commerce in Washington, said in an interview.

Senate leaders from both parties ended the impasse on Aug. 3, agreeing to vote on the aid and then take up the trade deals after their one-month recess.

“It’s time to clear the way for a series of trade agreements that would make it easier for American companies to sell their products in Panama, Colombia and South Korea -- while also helping the workers whose jobs have been affected by global competition,” Obama said in his Sept. 8 speech.

In a first step, the House voted on Sept. 7 to renew trade preferences on goods from developing nations, which expired last year. Senate Majority Leader Harry Reid, a Nevada Democrat, told reporters he would use the preferences bill as a vehicle to renew the Trade Adjustment Assistance.

McConnell, Boehner

House Speaker John Boehner, an Ohio Republican, said in August that he supported the “job-creating trade bills.”

Senate Republican Leader Mitch McConnell of Kentucky, who said in November his top political priority is to deny Obama a second term, called Obama’s request for Congress to pass the trade deals “an encouraging sign for economic opportunity” on Aug. 16 in Louisville, Kentucky.

“Obama hasn’t found common ground very frequently with Republicans,” Michael Moore, a professor at George Washington University in Washington and an economist in the Bush administration, said in an interview. “I’m sure the president’s economic advisers are saying, ‘We can get cooperation from Republicans, look bipartisan and we can get something that looks good for the election, which is export jobs.’”

The Colombia free-trade agreement faces the strongest Democratic opposition because the labor-rights plan the administration negotiated wasn’t included in drafts of the bill.

Intimidation, Violence

Representative Sander Levin, a Michigan Democrat, said he won’t support the Colombia deal because its government fails to protect workers from intimidation and violence.

“Colombia continues to have its problems and will be more controversial,” Levin said in an interview. He said he will vote for the South Korea and Panama accords.

Senator Max Baucus, a Montana Democrat and chairman of the Senate Finance Committee, supports all three deals. Senate Democrats from other states with substantial farm employment are also likely to support the trade agreements because they would open markets for agricultural exports, said Moore, the George Washington University professor.

Republicans in the House aligned with the Tea Party will probably support the trade accords while opposing the worker aid, Moore said. Sixty-seven of the 87 freshmen House Republicans, led by Representatives Rick Berg of North Dakota and Tom Reed of New York, sent Obama a letter in March urging him to submit the pacts for approval.

“The administration seems to have figured out that in order to win, they’re going to have to rely on Republican votes,” William Reinsch, president of the National Foreign Trade Council and a Commerce Department official in the Clinton administration, said in an interview. “You take your friends where you find them.”

To contact the reporter on this story: Eric Martin in New York at emartin21@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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