Nearing possible completion of what would be the most ambitious free-trade agreement in a generation, the Obama administration is facing a difficult sales job at home as key industries and unions grow cautious, domestic manufacturers move to protect their markets, and trade skeptics amp up their opposition.
It has taken the White House three years and 19 rounds of negotiations to move the 12-
nation Trans-Pacific Partnership to this point.
The talks are continuing this week at an unrelated meeting in Indonesia. Obama is scheduled to attend, and officials hope the leaders of the 12 countries will reach an agreement push the agreement towards completion by the end of the year.
But the more difficult fight may be taking shape in Washington and in corporate and union offices around the United States, where the scars of the economic crisis and high unemployment will test the country’s attitude toward free trade.
Obama has made the agreement a centerpiece of his strategy toward Asia, “but it seems to us that the economic aims have been subsumed” to ensure that some agreement is reached among the disparate group of countries, said Steve Biegun, vice president for international governmental affairs at Ford Motor.
Ford joined with the United Auto Workers, steel companies, the technology industry and others to gather congressional support for a recent letter telling the White House it should use the negotiations to make countries such as Japan promise not to use the value of their currency to boost exports.
The issue is a long-standing one in U.S. politics but would be difficult to embody in a trade agreement. The import of the letter, however, was in the number of signatures — 60 senators and 230 members of the House — and the work between Ford and the union in gathering them. When the company and the UAW endorsed the Korea free-trade agreement two years ago, they provided an important push for that pact — and their suspicions about TPP could be similarly significant.
Any trade agreement has its detractors, but the ambition and diversity of interests in this case will make the politics that much more complex.
The Obama administration began the talks promising a “gold standard” agreement that would set high-level rules for the industries that the United States sees as important for its future.
U.S. Trade Representative Michael Froman said that’s still the goal but acknowledged in a phone interview from Bali that the emerging agreement won’t please everyone.
“Our goal is to reach an agreement that reflects . . . our interests, our concerns in a balanced way. Sometimes that balance has to be struck among domestic stakeholders,” Froman said. “The question at the end of the day is does the agreement further American jobs, growth, strengthen the middle class? That is our guidepost. And we believe the answer is yes. We believe we are on track in that regard.”
Merely expanding trade would be a step back from the ambitions the administration carried into the talks. Increasingly, negotiators have had to balance competing values within the administration, among the disparate nations around the table, and among domestic interests. Better intellectual-property protection, for example, could mean higher drug prices and less access in poorer nations, a dilemma that still has not been resolved; concerned about the political fight ahead on Capitol Hill, the administration recently backed off a proposal it had made to exempt any nation’s tobacco laws from provisions opening trade in agricultural products.
Maine’s New Balance shoe company shows the type of difficulties ahead. The company is among the few shoe companies that manufacture in the United States, and its officials worry that demands by Vietnam to eliminate existing tariffs could drive them out of business.
They have sought relief in an indirect way, pushing legislation that would through a law that would favor U.S. shoe companies in purchases at U.S. military bases.
But that could potentially run afoul of other aspects of the TPP that aim to minimize local purchasing or content requirements — something U.S. industry in general is eager to see stripped away around the world.
“It is hard for us not to look at this as our industry versus theirs,” Matt LeBretton, head of public affairs for the company, said of Vietnam. “We look at it as a zero-sum game in our sector.”
Rep. Jim McDermott (D-Wash.), said in a conference call with reporters Thursday that he felt the agreement was potentially politically important for Obama and important to the U.S. presence in Asia.
But he remains uncommitted and concerned about whether the administration can resolve all the potential conflicts.
“If we get all of Asia including the Japanese in an agreement like this, it would be a huge achievement for the president,” he said, “but I am not just willing to go with anything to have a political victory.”