Obama Fast-Track Trade Agenda Risk Comes From Democrat

One of the biggest challenges to President Barack Obama’s trade agenda is a senior House Democrat from Michigan with some of the Capitol’s closest ties to organized labor and his home state’s auto industry.

Representative Sander Levin, the top Democrat on the House Ways and Means Committee, said he’ll lead opposition to a bipartisan measure unveiled yesterday to allow Obama to negotiate trade deals that lawmakers can’t amend. A fast-track method for advancing trade agreements, which the administration wants, is key to winning passage of some of the largest trade agreements in history.

“I don’t support what they’ve proposed,” Levin told reporters, saying he’ll write a rival measure that expands the role of Congress in overseeing trade deals. “It can’t be the same old business as usual in terms of the role of Congress.”

The move by Levin, House Democrats’ leader on trade policy, comes as Obama faces growing opposition from members of his own party who say the trade deals being negotiated could short-change U.S. workers and some industries. Levin’s expertise on trade gives him the ability to pull his way other members who aren’t decided, said Michael Moore, a professor of economics and international affairs at George Washington University.

His stance also risks expanding the intra-party rift over free trade and U.S. jobs as the party seeks to make income inequality an issue in the 2014 midterm election, Moore said.

‘In Trouble’

“The longer this debate is delayed, the more it’s in trouble,” he said. “It’s always a winner to complain about trade in an election year.”

The Obama administration is seeking authority to smooth congressional passage of trade deals, including one being negotiated with a group of 11 other Pacific-region nations and another with the 28-nation European Union. Those pacts, to create the world’s largest free-trade zones, would link regions with about $44 trillion in annual economic output.

The U.S. is also negotiating a services-trade agreement with a group of nations that would cover about half of the world’s economy.

If more Democrats join Levin in opposing fast-track authority, trade deals could be delayed indefinitely. Bill Reinsch, president of the National Foreign Trade Council whose members include Caterpillar Inc. (CAT) and Pfizer Inc. (PFE), recalls that trade authority passed the House by just one vote when last approved a dozen years ago.

‘Bitter, Partisan’

“Nobody wants to relive what happened then, where you had a very bitter, partisan battle,” Reinsch said. “We seem to be headed in that direction.”

Richard Trumka, president of the AFL-CIO, said Levin’s opposition adds to his confidence that the nation’s largest labor federation could defeat a move for fast-track authority in the House.

“It’s going to be an all-out campaign because it’s bad policy, particularly as drafted,” Trumka said in an interview.

The debate was heightened yesterday, when House Ways and Means Committee Chairman Dave Camp of Michigan joined leaders of the Senate Finance Committee to offer their version of the legislation on so-called trade-promotion authority.

Baucus, Hatch

Also backed by Democratic Senator Max Baucus of Montana and Republican Senator Orrin Hatch of Utah, the measure includes updates for labor and environmental protections, provisions to guard intellectual property against Internet crimes, and a first-ever provision to prevent currency manipulation by trading partners. The Senate Finance Committee will hold a hearing Jan. 16.

Even before the announcement, lawmakers at opposite ends of the political spectrum were objecting to giving Obama fast-track authority, particularly in the House. Republicans control the chamber, 233-200, with two vacancies.

In November, 151 House Democrats sent a letter to Obama opposing giving the administration fast-track authority. At the same time, 23 House Republicans, including some aligned with the small-government Tea Party movement, sent a letter saying they don’t back fast-track approval of trade deals.

House Speaker John Boehner, an Ohio Republican, said yesterday he wouldn’t advance such a measure without more Democratic support, maintaining that Obama has provided “scant attention” to the sinking support for it in his party’s ranks.

Bipartisan Support

“I made clear to the president that this can’t pass unless there’s bipartisan support for it,” Boehner told reporters.

Obama in a July 30 speech called for the authority, and U.S. Trade Representative Michael Froman and Commerce Secretary Penny Pritzker, two of his top deputies, have each urged Congress to pass the measure. White House Press Secretary Jay Carney yesterday said the bipartisan proposal is “welcome,” without endorsing it.

“If we don’t seize these opportunities, our competitors surely will,” Carney said in a statement. “And if we don’t take the leadership to set high standards around the world, we will face a race to the bottom which is not in the interest of our workers and firms.”

Levin said his measure will have stronger provisions on labor, the environment, currency and also access to medicines. He also wants immediate approval of a separate measure reauthorizing assistance to workers whose jobs are lost because of expanded trade.

Multilateral Deals

His proposal includes a bipartisan congressional panel that will weigh in on trade deals, he said. Obama is moving away from individual-country trade deals to multilateral ones with higher stakes for U.S. jobs and exports, Levin said.

“The emphasis has to be on getting trade deals and negotiations right,” he said.

Representative Rob Andrews, a New Jersey Democrat, said Levin’s opposition to the bipartisan proposal could doom prospects in the House, where trade votes are often razor-thin.

In 2002, when President George W. Bush won fast-track trade approval, Levin led the opposition. The measure first passed the House on a 216-215 vote, and only after then-Speaker Dennis Hastert, a Republican, held the vote open an extra 20 minutes to win enough support.

A final version negotiated with the Senate passed in the House by just a three-vote margin months later, even as the Senate easily passed it, 64-34.

House ‘Battle’

“Trade politics are always the same -- the battle is always in the House, and the extent to which there is a critical mass of Democrats who are willing to support fast-track,” Andrews said.“Without Mr. Levin, that probably doesn’t happen. I think it’s very significant.”

Camp said in an interview he thinks his proposal can prevail.

“‘All debates have a potential to become partisan, but we really want a strong economy and a vibrant trade agenda,’’ Camp said. ‘‘And we can’t have a vibrant trade agenda without the authority to negotiate the trade agreements.’’

Like his younger brother, Senator Carl Levin of Michigan, Sander Levin is an authority on trade issues. He favored a 1980s free trade deal with Canada that benefited the auto industry, while opposing 1993’s North American Free Trade Agreement. He used his clout to get Bush to alter labor and environmental protections in a Peru free trade deal, and also has insisted on changes in agreements reached with Colombia, South Korea and Panama.

Labor union considerations are often close to his thinking, as are the needs of his home-state auto industry, both of which are among his largest campaign contributors.

Auto-Industry Donations

Since 1989, auto industry PACs and individual employees of automakers have donated about $420,000 to Levin, according to the nonpartisan Center for Responsive Politics in Washington. Labor-union related donations have reached about $2.4 million.

The United Auto Workers and the big automakers -- Ford Motor Co., General Motors Co. (GM) and Chrysler Group LLC -- have said they won’t support the Pacific region trade deal unless it takes steps to address currency manipulation by Japan that is hurting U.S. car sales.

Levin said he supports a proposal from the automakers yesterday that would let countries taking part in the Pacific trade deal track foreign exchange activity and, if manipulation has occurred, seek to suspend the violating country from benefits of the trade pact for at least a year.

In his office, Levin keeps a plaque displaying a U.S. car part, a universal joint that he says would cost about $11.50 cents in the U.S., and $105 in Japan. He said he keeps it near his desk to remind him of trade injustices.

‘‘If Japan wants to be in this deal, it has to open up its market,” he said.

To contact the reporter on this story: Laura Litvan in Washington at llitvan@bloomberg.net

To contact the editors responsible for this story: Jodi Schneider at jschneider50@bloomberg.net; Jon Morgan at jmorgan97@bloomberg.net

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