New York Times (Nov. 17, 2010)

Obama Sails Trade Sea, Where Friends Are Foes

By HELENE COOPER

WASHINGTON — Conventional wisdom in Washington says that trade policy is one of the few areas where President Obama and Congressional Republicans can work together in the next two years. But making progress will require Mr. Obama to navigate opposition from within his own party, and could test how far he is willing to go in compromising and building new coalitions in the wake of the Republican victories.

In announcing last week that he could not reach an expected free-trade pact with South Korea, Mr. Obama cited a possibly skeptical Congress as a potential hurdle, saying he did not want to negotiate a pact he could not sell on Capitol Hill, where Democrats have frozen consideration of free-trade deals with South Korea, Panama and Colombia.

But Mr. Obama also promised that in the next several weeks, his negotiators would keep trying to overcome the disputes with South Korea over autos and beef that stalled the pact last week.

If the president is successful, he may be setting himself up for a big fight with Democrats.

Even if the Koreans agree to gradually drop a ban on imports of American beef from older cattle and agree to a slower phase-out of American tariffs on imports of Korean cars while eliminating safety and environmental rules that help keep the Korean market one of the world’s most closed, “the Korea trade pact is not O.K., and it won’t be a trade agreement that I’ll want to vote for,” said Senator Sherrod Brown, Democrat of Ohio.

He also suggested that the Colombia and Panama trade pacts would fare no better with liberals; Mr. Brown said all three agreements would cost Americans jobs.

“If they try to jam these trade agreements through,” he said, “it’s clearly out of step with what the American public wants.”

But if Mr. Obama fails to get the South Korea trade pact, he may be setting himself up for a big fight with Republicans. The president “has now got a Congress that is not only willing to engage on trade, but will shine a very bright spotlight on its potential,” said Representative Kevin Brady, the Texas Republican who is likely to become chairman of the Trade Subcommittee of the Ways and Means Committee. “It’s been locked in a closet for the last four years on Capitol Hill, and we’re going to pull it out.”

White House officials maintained on Tuesday that they would keep pushing to get the South Korea deal completed within six weeks. White House officials have been striking conciliatory tones with big business since the bruising election campaign during which Mr. Obama sharply criticized the U.S. Chamber of Commerce in campaign rallies after the chamber contributed some $50 million to mostly Republican candidates. Part of the reconciliation process involves pursuing the free-trade pacts businesses want.

“This will be an early test for this president with the new Congress, particularly the House leadership,” said Myron Brilliant, senior vice president for international affairs at the chamber. “Can we move the trade agenda forward, and can he do so in a bipartisan fashion?”

Mr. Brilliant’s boss, the chamber’s president, Thomas J. Donohue, traveled to South Korea last week to try to help win the free-trade deal; Mr. Donohue met for an hour with Treasury Secretary Timothy F. Geithner before the trip, as part of a continuing reconciliation effort between the White House and the chamber.

Mr. Obama has been cautious in pushing trade, reflecting Democratic Party concerns that trade liberalization has cost American jobs. But earlier this year, Mr. Obama announced that he wanted to double American exports in the next five years. While some economists speculate that the administration plans to reach that goal largely by watching the dollar decline, making American goods cheaper abroad, most trade experts say that opening markets abroad for American exports will have to be a crucial part of any strategy to increase export growth.

“The case for this is more compelling than ever before,” said Peter L. Scher, an executive vice president at JPMorgan Chase and a former trade negotiator with the Clinton administration. “The rest of the world is moving forward on engagement, particularly in Asia. If, in fact, the issue is jobs and unemployment, we’re only going to get there through open markets.”

But many legislators, and not just on the Democratic side of the aisle, do not see the issue so simply. There have always been Republicans from textile states in the South and manufacturing states in the Midwest who have been skeptical of trade. The new Tea Party Republicans who will join the next Congress are a question mark when it comes to trade. On the campaign trail, trade was not a big issue; rather, Tea Party members talked about job losses because of big government and stimulus spending.

Republican Party leaders in the past have shown themselves well able to lasso wayward party members to keep them in line when they have needed trade votes to please a business constituency. People in Congress still talk about the night that a sobbing Representative Robin Hayes, Republican of North Carolina, was pressured by party leaders to vote for a trade pact that he had sworn to vote against because of the loss of textile jobs in his state.

But whether the leaders will be able to exert the same amount of party control over their new members is an open question. “We have a lot of members who need education,” said Mr. Brilliant of the Chamber of Commerce. “They’re going to come in with a mandate to shrink the government. We’ve got to demonstrate that standing still is not an option if we want to grow our economy and create jobs here.”