With global financial markets in turmoil and several trade deals on ice, labor unions and business groups are trying to decipher how President-elect Obama and an expanded Democratic majority in Congress will approach international trade policy, and are eyeing the U.S.-Colombia trade pact as an early indicator.
President Bush wants to see action on the deal, which has been hamstrung due to Democratic concerns over violence against union activists in the South American country, in a lame-duck session next week. With Democrats seeking to advance an economic stimulus package that the White House has thus far resisted, the deal could be a bargaining chip.
But unions and other skeptics of trade liberalization are arguing that the election results were a clear signal that the public is opposed to further trade agreements, and Democratic action on the Colombia deal would prompt a backlash from organized labor and other groups, which would be unhelpful, to say the least, to Obama’s political honeymoon.
“I think it’s ridiculous. It’s a complete non-starter,” said Thea Lee, policy director for the AFL-CIO, adding that the deal would not stimulate the economy. “The Colombia agreement has nothing to do with the economic crisis we’re facing right now. … We obviously would be strongly opposed.”
Obama’s incoming chief of staff, Rep. Rahm Emanuel , D-Ill., appears to agree. “You don’t link those essential needs to some other trade deal,” he said Sunday on ABC.
While President Bush was able to push through several free trade initiatives in his administration, including a renewal of fast-track trade negotiating authority and passage of the Central American Free Trade Agreement, the pace has slowed considerably since Democrats captured control of Congress in 2006.
In 2007, the White House and congressional Democrats reached a deal on how labor and environmental standards should be dealt with in trade agreements. But the Democratic majority remains split on trade policy, thwarting Bush’s trade agenda.
A deal with South Korea faces opposition from domestic automakers. An agreement with Panama was sidelined after Pedro Miguel Gonzalez, wanted in the United States for the murder of a U.S. soldier in 1992, was elected in 2007 to Panama’s National Assembly. (Gonzalez has now stepped down, however, possibly removing that political obstacle.) And the Colombia deal, which is strongly supported by companies like Caterpillar Inc., remains in limbo.
‘Clear the Decks’?
Pro-trade business groups, whose victories have been few and far between of late, would like to see the deals — particularly with Colombia and Panama — done before the new president takes office and has an opportunity to renegotiate them. The logic being pushed is that Obama should want to “clear the decks” before delving into the myriad challenges that face him starting Jan. 20.
A coalition of more than 1,000 business, chambers of commerce and other industry groups calling itself the Latin America Trade Coalition wrote Obama Nov. 5 urging him to work with lawmakers to get the Colombia and Panama deals passed.
“To delay approval of these trade deals would be to abandon America’s closest allies in Latin America at a critical moment,” the group wrote. “To approve them will spur the economic growth and job creation that U.S. workers, farmers, and companies need; approval of these agreements is a logical part of any stimulus package.”
Retailers would also like to see lawmakers attach language to the stimulus that would eliminate a tariff on low-cost imported footwear originally enacted as part of the 1930 Smoot-Hawley law.
But during his bitter primary battle with Sen. Hillary Clinton, D-N.Y., Obama’s rhetoric on trade in battleground states like Michigan and Ohio had a decidedly skeptical tint, and he at one point suggested that the North American Free Trade Agreement be re-negotiated.
In his final televised debate during his general election campaign against Sen. John McCain , R-Ariz., Obama expressed clear concerns about the Colombia deal. “The history in Colombia right now is that labor leaders have been targeted for assassination on a fairly consistent basis and there have not been prosecutions,” Obama said. “I think that the important point is we’ve got to have a president who understands the benefits of free trade but also … is going to stand up to other countries.”
The Bush administration and Colombian officials insist that Bogota has made significant progress in curbing violence and instituting the rule of law amid a 40-year civil war against leftist guerrillas and right-wing militias. But Democrats say the progress is insufficient.
Congressional Election Issue
Organizations like Public Citizen are watching Obama’s words carefully, and say they intend to hold him to them. The group, which calls for “fundamental overhaul” of U.S. trade policies, tracked how trade was used as an issue during the 2008 campaign, especially in political advertisements, and argues that as many as 37 members of Congress were replaced by newcomers more apt to overhaul current trade policy.
“This political shift follows where the American public has been moving for years,” Lori Wallach, director of Public Citizen’s Global Trade Watch program, said during a Nov. 6 conference call. “The challenge . . . is to translate the electoral messaging into real change.”
“Just the political cost of doing a Colombia agreement . . . would just shut down everything else they’re going to do,” Wallach argued in a separate interview.
“Fair trade has become a national priority,” Sen. Sherrod Brown , D-Ohio, said during the conference call. “We start with a timeout on trade agreements.”
Still, many in the business community argue that Obama will find it in his interest to pursue more free trade agreements — and even to ask Congress for a new version of trade promotion authority. The biggest test may be how Obama handles calls from some Democratic lawmakers for the administration to take action against China for alleged currency manipulation.
At the same time, business groups anticipate a difficult road ahead on trade and other issues on which organized labor is weighing in.
“I’m not naive. I’ve been around a long time, and I can count,” Thomas J. Donohue, president of the U.S. Chamber of Commerce, said at a Nov. 6 news conference. He predicted it will be “much harder to stop some anti-business” measures, and that unions and trial lawyers will be looking for “quick and frequent political payback.”