Labor doesn't like it.

Photographer: Joe Raedle/Getty Images

Why Democrats Soured on Trade

Albert R. Hunt is a Bloomberg View columnist. He was the executive editor of Bloomberg News, before which he was a reporter, bureau chief and executive Washington editor at the Wall Street Journal.
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Two decades ago, President Bill Clinton needed Republican support to win a bitter battle over the North American Free Trade Agreement. He also garnered 40 percent of congressional Democrats, including almost half the party's senators.

President Barack Obama may also win some close trade votes -- first with the approval of a bill giving him so-called fast-track authority to negotiate the huge Trans-Pacific Partnership and then when the deal itself moves through Congress. This time, more than 80 percent of congressional Democrats will oppose the president.

Democrats have turned decidedly protectionist in the decades since the passage of Nafta, a period that coincides with increasing globalization and steep losses of U.S. manufacturing jobs. Even Hillary Clinton is breaking with her husband's free trade record, hinting she may oppose the TPP, which would bind the U.S. and 11 other Pacific Rim nations.

Obama and his unaccustomed allies, Republican congressional leaders, want to pass fast-track authorization -- which assures a straight up or down vote on TPP and other trade deals -- by the end of the month. It's a slog. For now, fewer than 20 House Democrats are on board, and Obama will get no more than 30; 10 Senate Democrats may go along, but no more than 15. 

Labor is united and going all out against the trade deals, orchestrating mailings, phone calls, broadcasting and social media ad buys and conducting polls in dozens of congressional districts. Obama has stepped up his efforts to build support, meeting with dozens of congressional Democrats and publicly taking issue with Senator Elizabeth Warren's criticism of the trade measures. 

Although leading Republicans embrace the free-trade measures -- including, surprisingly, Texas Senator Ted Cruz -- a handful of the party's senators and as many as 50 of its House members may vote against it, chiefly because it's supported by Obama.

Rational critics often conflate unbridled trade, which has hurt America's industrial workforce, and trade pacts. The complaints used to center on Japan, but now they focus on China, even though the U.S. has no plans for a free-trade agreement with that country.

Nonetheless, there are legitimate concerns about TPP and other deals. One raised by Warren, a Massachusetts Democrat, is the "Investor-State Dispute Settlement," which permits multinational companies to go before special tribunals to challenge certain domestic policies and practices. Philip Morris, for example, has challenged antismoking packaging measures in Australia and Uruguay, contending they endanger the company's intellectual property.

Opposition to this provision, labor leaders say, scores through the roof in polls. Proponents have done an inadequate job of addressing concerns that this could affect U.S. labor or environmental laws; Pacific pact negotiators may have to tighten this provision.

Less legitimate are demands to include currency manipulation protections in any Pacific deal. This is aimed at China, which isn't part of the pact, and such measures are usually handled by Treasury officials, finance ministers or central banks. Yet the issue has been raised by serious lawmakers such as Ohio Republican Senator Ron Portman, a former U.S. trade representative, forcing Obama administration officials to try to come up with some cosmetic way to appease them.

The overpromising of earlier trade deals, especially Nafta, has produced a backlash. For Democrats, two factors emerged in a study of the Nafta vote by the Economic Policy Institute. Back in 1993, there were 67 rural Democrats, who split almost evenly for and against the treaty, while Democrats representing urban or suburban areas opposed it almost 2-to-1. Today, there are few rural Democrats in the House. And business, which provided a big chunk of campaign cash for those pro-Nafta Democrats, gives much less support for Democrats now.

The protectionist pressure has reached Hillary Clinton. Signaling she may oppose TPP may be good primary politics but it may not be as popular a stance in a general election. Although conditions have changed markedly, it's instructive to remember John Connally, the one-time Democrat who, more than Ronald Reagan, became the most dynamic Republican candidate in the 1980 presidential race. He ran on a get tough on trade platform, warning the Japanese that they "better be ready to sit on the docks of Yokohama in their own Toyotas, watching their own Sonys."

The Texan spent $12 million -- the equivalent of $39 million today -- and got one delegate, Ada Mills of Arkansas. He had to drop out after only the third primary.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Albert R. Hunt at ahunt1@bloomberg.net

To contact the editor on this story:
Max Berley at mberley@bloomberg.net