Obama Allies Vow to Fight His State of the Union Plea on Trade

U.S. President Barack Obama delivers the State of the Union address to a joint session of Congress at the Capitol in Washington, D.C., U.S., on Tuesday, Jan. 20, 2015.

Photographer: Mandel Ngan/Pool via Bloomberg

Some of President Barack Obama’s staunchest allies are vowing to fight legislation he requested to expand his power to negotiate trade agreements.

Representative Rosa DeLauro said she supports Obama’s initiatives aimed at strengthening the middle class, but drew the line at his desire for so-called fast-track trade negotiating authority, which she said would sideline Congress.

“It surrenders the congressional authority that we may need to protect American workers and American consumers,” DeLauro, a Connecticut Democrat, said Wednesday at a news conference hours after Obama asked for fast-track authority in his State of the Union address to Congress.

Labor groups, including the AFL-CIO, and some Democrats have attacked the proposal, which would let Obama present a trade accord to Congress for an up-or-down vote without amendments. Opponents argue the trade deals are negotiated in secret and reflect a corporate agenda that has pulled down U.S. wages.

U.S. businesses stand to gain greater access to markets in the Asia-Pacific region through a proposed accord known as the Trans-Pacific Partnership with 12 nations representing 40 percent of the global economy that the Obama administration said it hopes to complete this year. The U.S. also is working on a agreement with the 28-nation European Union that aims to clear away barriers to trade.

AFL, CWA

The difficult path for Obama to win passage of legislation giving him the authority was illustrated by opponents who began issuing statements Tuesday night before Obama had even finished speaking.

The Communications Workers of America said it supports many of Obama’s initiatives but wouldn’t stand with him “to send more U.S. jobs offshore.” AFL-CIO President Richard Trumka applauded Obama’s initiatives on taxes and wages, but added “our opposition to fast-track trade deals that are giant giveaways to big corporations must be resolute.”

The authority was used in 1993 to pass the North American Free Trade Agreement and the pact that created the World Trade Organization.

“I’m the first one to admit that past trade deals haven’t always lived up to the hype,” Obama said in his State of the Union speech in Washington. “But 95 percent of the world’s customers live outside our borders, and we can’t close ourselves off from those opportunities.”

Lengthy Campaign

U.S. Trade Representative Michael Froman has spent months in a campaign to win trade negotiating authority. The effort, supported by top Republicans who now control both houses of Congress, will be joined in coming months by at least six cabinet secretaries, and will complement a planned lobbying blitz by business groups.

Bill Reinsch, president of the National Foreign Trade Council, said before the speech that the “omens are promising” for passage of legislation and welcomed Obama’s high-profile endorsement.

“The administration and the leadership are marching together on this issue,” Reinsch said. “Nobody has put any dealbreakers on the table.”

The sweeping Asia trade agreement covers not only tariffs but other policies affecting trade such as intellectual property protection and data flows. It could eventually benefit companies such as International Business Machines Corp., Caterpillar Inc., Boeing Co. and Pfizer Inc.

DeLauro Vow

DeLauro promised to rally both Democrats and Republicans behind the message that trade deals have cost jobs and hurt the middle class.

“We are going to fight this tooth and nail, and I believe we are going to win,” said Representative Louise Slaughter, a New York Democrat.

Passing U.S. trade legislation has proved a tough slog since President Bill Clinton pushed through the NAFTA over the opposition of most of his party. Fast-track authority has been especially difficult to pass, having failed in the House of Representatives in 1998 and passed by one vote in 2002.

Obama raised fast-track authority in last year’s State of the Union address, but then-Senate Majority Leader Harry Reid, a Nevada Democrat, effectively killed it by refusing to bring a bill to the Senate floor. Senator Orrin Hatch, a Utah Republican and chairman of the committee that oversees trade policy, said before the speech that he would move quickly to formulate legislation in the Senate.

With the Republican takeover of the Senate in the 2014 elections, Majority Leader Mitch McConnell, a Kentucky Republican, wants to pass the legislation, as does House Speaker John Boehner of Ohio. But some Republicans are likely to oppose it and Boehner and McConnell will need Democratic votes.

Cuba Trade

Representative Steny Hoyer of Maryland, the No. 2 Democrat in the House, said prior to the speech that fast track “can pass” in the House. He also lauded prior trade deals as “good for our country and our workers.”

A month after announcing an easing of U.S. restrictions on trade with and travel to Cuba, and the resumption of diplomatic relations, Obama also urged Congress Tuesday to “begin the work” of lifting the full U.S. embargo on Cuba.

A full lifting of the trade embargo isn’t likely until at least 2017, according to an analysis by Bloomberg Intelligence. Greater tourism could help non-U.S. hotel chains already in Cuba, such as Accor SA and Melia Hotels International SA.

The embargo dates from the administration of President John F. Kennedy five decades ago. Congress wrote it into law in 1996, so only legislative action can permit the resumption of normal trade relations.

“In Cuba, we are ending a policy that was long past its expiration date,” Obama said. “When what you’re doing doesn’t work for 50 years, it’s time to try something new.”

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