[Ip-health] WSJ: Reid Deals Body Blow to Obama on Trade

Thiru Balasubramaniam thiru at keionline.org
Thu Jan 30 00:11:05 PST 2014

POLITICS AND POLICY<http://online.wsj.com/public/search?article-doc-type=%7BPolitics+and+Policy%7D&HEADER_TEXT=politics+and+policy>Reid
Deals Body Blow to Obama on TradeHis Opposition to Fast-Track Authority for
Trade Deals Puts Him at Odds With President's Economic Agenda

Updated Jan. 29, 2014 9:47 p.m. ET

WASHINGTON--Senate Majority Leader Harry
Reid<http://topics.wsj.com/person/R/Harry-Reid/5832> broke
publicly with the White House Wednesday on trade policy, instantly
imperiling two major international trade deals and punching a hole in one
piece of the economic agenda the president outlined in his State of the
Union address a day earlier.

Mr. Reid told reporters he opposed legislation aimed at smoothing the
passage of free-trade agreements, a vital component to negotiating any
deal, and pointedly said supporters should back down.

"I'm against fast track," Mr. Reid (D., Nev.) said, using the shorthand
term for legislation that prevents overseas trade agreements from being
amended during the congressional approval process. "I think everyone would
be well-advised just not to push this right now."

The move spells trouble for two sets of complicated talks, one with the
European Union and the other with countries in the Asia-Pacific region.
Both deals likely would have required such a "fast track" approval to clear
the Congress. The U.S.'s negotiating partners wouldn't likely commit to a
final agreement that could be unpopular back home without assurances that
it couldn't be modified by U.S. lawmakers.

Mr. Reid declined to say whether he would stop fast-track legislation from
coming up for a Senate floor vote, but other senators said his opposition
was important. "You can kiss any new trade deals goodbye," said Sen. John
Cornyn (R., Texas.) "I think the majority leader's focus is on the November
elections and he doesn't want to expose his vulnerable members to
controversial votes." Added Gary Hufbauer, senior trade expert at the
Peterson Institute for International Economics in Washington: "It's a
one-two punch against trade policy," he said.

Mr. Reid's comments amplified a fight within the Democratic Party over
trade at a surprising moment. Mr. Obama said in the State of the Union
speech that fast-track authority and the trade deals would help boost
hiring at small businesses, which he said account for 98% of U.S.
exporters. Mr. Reid's opposition places him as the leader among Democrats
who contend trade deals are bad for U.S. workers.

A White House official suggested the administration would continue to press
for what is formally known as trade promotion authority, saying that Mr.
Reid's position on this particular issue was well known. "We will not cede
this important opportunity for American workers and businesses to our
competitors," the official said.

How the administration will do that isn't clear. Many Democrats say
free-trade agreements don't do enough to stem the flow of jobs overseas and
don't require trading partners to observe strict-enough labor and
environmental rules. Some are concerned the Asia-Pacific pact under
negotiation would siphon U.S. jobs to low-income countries such as Vietnam.
Some conservative and tea-party Republicans oppose giving fast-track
authority to Mr. Obama, complicating the Republican position.

The U.S. Chamber of Commerce, one of the biggest supporters of the trade
agreements under negotiation, said the Obama administration has a decision
to make on how hard to fight against its own party. "This puts the
president front and center in terms of how bad does he want a trade
agenda," said Myron Brilliant, executive vice president at the Chamber. "We
think he does."

The strongest business support for trade negotiations comes from companies
that do the most business overseas, including Hollywood studios and
exporters of heavy machinery. Others with a U.S. focus, such as textiles
and auto makers, are worried the trade deals could expose them to what they
say is unfair competition from abroad. Agricultural concerns would likely
only support trade pacts that significantly open export markets, especially

U.S. officials had hoped to finish talks on the Trans-Pacific Partnership,
which includes Japan and other Asian and Pacific nations but not China,
last year. Sensitivities over basic tariffs and quotas, especially in
agriculture, have held the talks back.

The latest developments come amid growing skepticism in Japan about the
U.S.'s commitment to free trade. "It's up to the resolve of the U.S.
government," Japan's economy minister, Akira Amari, told reporters in Tokyo
Thursday morning. "If the president comes to the negotiating table with a
strong enough determination to wrap it up by spring, other countries will
follow suit."

Japanese Prime Minister Shinzo Abe has been pressing forward with
free-trade deals to keep pressure on domestic industries to do long-overdue
reforms--even as it has drawn criticism from farm groups.

Mr. Reid, whose state has a heavy union presence, has long opposed trade
deals. He also represents a caucus with several vulnerable Democrats up for
election in November who might have been forced to choose between Mr. Obama
and the unions that help finance campaigns.

"I think there's a lot of dubiousness in our caucus to fast track, given
that every time we sign a free-trade agreement it seems other countries
violate the rules and we don't," said Sen. Chuck Schumer (D., N.Y.), a
member of the Senate Democratic leadership.

Unions opposing the trade deals cheered the move. "For those of us who want
to have a progressive trade agenda, it means that we're encouraged," said
Larry Cohen, head of the Communications Workers of America, one of the most
vocal unions criticizing the current trade negotiations.

Celeste Drake, a trade-policy specialist with the AFL-CIO, a union
confederation, said Mr. Reid's comments offered "a great opportunity to get
off the fast track to bad trade deals and open the policy window to a
better deal for workers."

Fast-track authority, which would require lawmakers to vote on trade deals
with limited procedural hurdles and no opportunity to make changes, expired
in 2007 and hasn't since been renewed.

Until now, the top Senate Democrat had avoided publicly disagreeing with
the White House on trade legislation. On Wednesday, he said he made clear
the depth of his opposition to Senate Finance Chairman Max Baucus (D.,
Mont.), who recently unveiled the fast-track bill, and Sen. Ron Wyden (D.,
Ore.), who is presumed to become chairman of the committee if Mr. Baucus is
confirmed as the next U.S. ambassador to China.

Mr. Wyden has also expressed concerns about the existing fast-track bill
and thinks it needs to be rewritten, an aide said. An aide to Ways and
Means Chairman Dave Camp said the Michigan Republican, who would be in
charge of such a bill in the House, would like to have bipartisan support
before moving legislation.

--Mitsuru Obe in Tokyo contributed to this article.

Write to Siobhan Hughes at siobhan.hughes at wsj.com and William Mauldin at
william.mauldin at wsj.com

Corrections & Amplifications
Sen. Reid spoke to reporters on Wednesday. An earlier version of this
article incorrectly said he spoke on Tuesday.

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