Drugs, Cars and Cigarettes: Obama's Tough Fight for Trade Deal

Why the TPP Accord Is Not Necessarily a Done Deal
  • Majority of Congress has shown it will support trade accords
  • Provisions on drugs, tobacco and farmers may swing votes

President Barack Obama needs to hold together a razor-thin majority of pro-trade lawmakers in the U.S. Congress to win approval of his huge Asia-Pacific trade deal while fending off influential foes including carmakers, tobacco companies and dairy farmers.

An Obama victory will depend on winning a majority of Republican support, forcing him to contend with a party that has largely obstructed him. Most Democrats, leery of free-trade pacts, are likely to abandon their president. A vote isn’t possible before 2016.

There’s evidence a majority in Congress will support trade deals. In June, 218 members of the House, a bare majority, voted to grant Obama authority to negotiate the Trans-Pacific Partnership. The same legislation passed with 60 votes in the Senate; ratification of the deal requires only 51. Whether those coalitions hold depends on specific provisions of the agreement and how they affect businesses, labor unions, American families and the politicians who represent them in Washington.

"There are well-known differences of opinion on this and I don’t anticipate that we’re going to persuade every single member of Congress," Josh Earnest, the White House press secretary, told reporters on Monday.

Sales Pitch

The White House began its push immediately. Obama made the case for the deal at meeting Tuesday with executives and representatives from the manufacturing, farm and technology industries at the U.S. Agriculture Department’s headquarters in Washington.

“This agreement makes us more competitive,” Obama told the group. “We are knocking down barriers that are currently preventing American businesses from selling in those markets.”

The White House released a list of 19 participants who joined administration officials in the meeting on the trade deal, including John Engler, president of the Business Roundtable; Jay Timmons, president and chief executive officer of the National Association of Manufacturers; R. Bruce Josten executive vice president of the U.S. Chamber of Commerce; Dean Garfield, president and CEO of the Information Technology Industry Council, and Tom Linebarger, CEO and chairman of Cummins Inc.

Public declarations of support for the deal on Monday were scarce, as its details remain secret. On the other side, automakers, cigarette manufacturers, pharmaceutical companies, some agricultural interests and their congressional allies all criticized it within hours.

‘Uphill Climb’

Selling the trade pact will be an "uphill climb" for the White House, Bill Samuel, director of government affairs for the AFL-CIO, the nation’s largest affiliation of labor unions, said in a phone interview. The group has fought previous trade deals.

"The timing works against the administration," Samuel said. The deal "comes up in the hothouse of a presidential election and a congressional election; never a good time to be selling free trade."

Obama may be able to build support among pro-trade Republicans, said Gabriel Horwitz, vice president for the economic program at Third Way, a research group that supports trade. Fifty House Republicans opposed granting Obama so-called fast-track authority to negotiate the trade pact in June. Some of them may support trade but had concerns about expanding Obama’s powers, Horwitz said.

Courting Democrats

Just 28 House Democrats backed the fast-track legislation. Some Democrats wary of trade agreements in principle may be won over by the specifics of Obama’s agreement once businesses in their districts assess its impact, Horwitz said.

"It is 100 percent too early to tell what this deal does to votes," Horwitz said. "When you look at members of Congress, the business community, farm groups, etcetera, a lot of them are keeping their powder dry."

Still, rumblings of discontent were evident among some who sided with Obama on fast-track authority.

Senate Finance Committee Chairman Orrin Hatch of Utah, a Republican ally of the pharmaceutical industry who supported fast-track, said in a statement that the deal "appears to fall woefully short." Pharmaceutical companies had sought 12 years of protection from generic competition for advanced drugs called biologics, the U.S. standard. The agreement would provide for a minimum of five years in other countries.

Senator Thom Tillis, a Republican from North Carolina who voted for fast-track, warned that a provision of the trade deal related to cigarette manufacturers may cost it support. Under the agreement, tobacco companies would be unable to challenge foreign countries’ restrictions on their products. Public health advocates support the provision.

Tobacco Industry

For more read this QuickTake: Free Trade Feud

“By carving out tobacco from the TPP,” Tillis said in a
statement circulated by industry representatives, “the Obama
administration is discriminating against an entire agricultural
commodity, setting a dangerous precedent for future trade
agreements.”

Mike Conaway, a Republican from Texas who’s chairman of the House Agriculture Committee, said he and 16 other lawmakers sent the Obama administration a letter last week highlighting concerns with the deal such as a lack of access to foreign markets for rice and dairy farmers, as well as the tobacco provision.

"While I am encouraged to hear that U.S. livestock products such as beef and pork will see significant gains in market access, it will take a coalition of many to move TPP over the coming months," Conaway said in a statement. "At this time, I am skeptical that these concerns were sufficiently addressed but will remain open-minded."

The earliest Congress could consider the deal is February, and lawmakers may delay ratification until after the 2016 presidential election.

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