Obama trades, Clinton hedges on US-Pacific economic deal

Proposed trade deal divides Democrats and fires up party’s 2016 race for White House

Senator Elizabeth Warren: ‘No more secret deals. No more special deals for multinational corporations.’ Photograph: Yuri Gripas/Reuters

Senator Elizabeth Warren: ‘No more secret deals. No more special deals for multinational corporations.’ Photograph: Yuri Gripas/Reuters

 

Powers that would allows US president Barack Obama to agree trade deals with Asian countries and the European Union, as well as the deals themselves, have become a political football – not only within US Congress, but in the fledgling 2016 presidential field.

Mr Obama has made the Trans-Pacific Partnership, a trade deal with 11 Pacific Rim countries, and another agreement with Europe, known as the Transatlantic Trade and Investment Partnership (TTIP), two key goals of his remaining 19 months in the White House.

The president, a recent convert to free trade deals, believes the agreements would help the US economy by removing trade barriers to the west, across the Pacific, and to the east, across the Atlantic.

To agree those deals, Mr Obama needs what’s known as the Trade Promotion Authority, the ability of the Congress and president to “fast-track” trade deals, by restoring a power that expired in 2007.

Some Democrats on the party’s left flank, including pro-labour unions, environmentalists and Hispanic groups – potent voting blocs in national elections – are opposed to trade deals. They warn of the threats to American workers by removing tariffs and other protections for US industries to competitors from low-cost countries.

Resistance on left

Still hurting from past free trade deals, such as the North American Free Trade Agreement (Nafta) agreed by president Bill Clinton with Canada and Mexico in the 1990s, the Democratic progressive left are resisting the deals in a trade war within Mr Obama’s own party.

In a deal agreed with Republicans, the White House agreed this week to subject any trade deal negotiated by Mr Obama to a review by Congress and the public.

The compromise, signed off by the influential Senate finance committee but yet to be fully approved by Congress, is a sop to Democrats who are making the trade deals a topic of debate in the 2016 race.

Liberal Massachusetts senator Elizabeth Warren, a trade-deal opponent, has said she is not running for president. Still, her influence is keenly felt in the emerging campaign, given her popularity among grassroots Democrats, the core base of the party that candidates must court.

“Are you ready to fight?” Ms Warren said last week at an anti-trade deal rally with union leaders and Vermont socialist Bernie Sanders, an independent who might run for president.

“No more secret deals,” she urged. “No more special deals for multinational corporations.”

“I love Elizabeth,” Mr Obama told MSNBC this week. “We’re allies on a whole host of issues, but she’s wrong on this.”

Ms Warren has a staunch ally in Democratic Senate leader Harry Reid, who said that he has “never, ever” supported a trade agreement and would not start now.

“The answer is not only no, but hell no,” the veteran senator said on Tuesday.

Hedging her opinion

Recognising the political gains to be made on the left, presidential contender and frontrunner Hillary Clinton is hedging her position.

As first lady, Mrs Clinton backed her husband on Nafta; as Mr Obama’s secretary of state during his first term, she supported the Trans-Pacific Partnership.

She lauded the proposed 12-country Pacific deal in Hard Choices, her 2014 memoir seen as a blueprint for an expected presidential election manifesto.

Then, she wrote that the deal would “link markets throughout Asia and the Americas, lowering trade barriers while raising standards on labour, the environment and intellectual property”.

Now, however, in early campaign mode, Mrs Clinton is more circumspect, playing to that important left flank.

At an event this week in New Hampshire, the first- in-the-nation primary voting state, Mrs Clinton said: “Any trade deal has to produce jobs and raise wages and increase prosperity and protect our security. And we have to do our part in making sure we have the capabilities and the skills to be competitive.”

This flip-flopping is not new. As a Senate candidate in 2000, Mrs Clinton called Nafta a “flawed” deal (despite her earlier support as first lady). During her first ill-fated presidential bid in 2008, she called the deal “a mistake” and pledged to take “a trade timeout when I am president.”

O’Malley criticism

Rivals have jumped on her pivoting position. Former Maryland governor Martin O’Malley, who is expected to challenge Mrs Clinton for the Democratic nomination, has opposed trade deals and has needled the former senator in highlighting his opposition to supporters.

“Hard choice?” Mr O’Malley said in the subject line of an email, playing on the title of Mrs Clinton’s memoir. “Nope. To me, opposing bad trade deals like [TTIP] is just common sense.”

As the heat of the presidential contest intensifies, Mr Obama’s ability to raise enough support among fellow Democrats to push these free trade deals over the line will prove increasingly difficult .