POSTED: 01:30 a.m. HST, Feb 15, 2014
WASHINGTON » President Barack Obama's ambitious trade agenda appeared to fall further victim to election-year politics on Capitol Hill on Friday when Vice President Joe Biden, in a closed-door retreat with House Democrats, said he understood why they would not grant Obama the crucial authority he needs to conclude large trade deals with Asia and Europe.
Biden's comments most immediately called into question the Trans-Pacific Partnership, a regional pact among 12 nations that would be one of the world's biggest trade agreements. It is a central element of Obama's strategic shift toward Asia, and the White House had hoped to complete it last year. Responding to a question at the policy retreat for House Democratic leaders in Cambridge, Md., Biden said he understood that legislation for expedited consideration in Congress for free-trade agreements, known as fast-track authority, was not coming up for a vote now, according to several people who were in the meeting.
Winning that authority is viewed as necessary for Obama to extract politically difficult concessions from Japan, Singapore and other Pacific Rim countries. The Trans-Pacific Partnership aims to reduce tariffs on a vast array of goods and services and to harmonize regulations. It would affect 40 percent of America's exports and imports.
For Obama, the trade deal would also lend economic substance to a policy on Asia that is otherwise largely about shifting some military forces to the region as a counterweight to a rising China.
But with Democrats facing a difficult midterm election in nine months, Biden appeared sensitive to their more parochial concerns, including the pressures they face from organized labor. He took a hard line against the largest U.S. trading partners in the Pacific and told the Democrats, for example, that he had warned the Japanese on a recent trip to Tokyo that the pact could not go forward if the U.S. auto industry continued to have only 1 percent market penetration in Japan.
Many Democrats typically oppose trade deals, along with their allies in unions and environmental and consumer groups, because they do not want to encourage free-trade agreements that they say would siphon off manufacturing jobs in the U.S. and create pollution.
White House officials insisted that Obama was not ceding the battle, either to win fast-track authority or to pass the broader trade deals. The European trade deal, the Trans-Atlantic Trade and Investment Partnership, is also affected by fast-track authority, which is viewed as essential to passing any agreements, and it is one area on which the president and Republicans agree.
"While the vice president said he understands where some members of the House and Senate are coming from," said a senior administration official, "he made a clear case for the administration's trade priorities, including the Trans-Pacific Partnership negotiations."
The pact, Biden said, would allow the U.S. to respond to the growing economic muscle of China, which he said was affecting the economic calculations of its neighbors.
When the vice president was finished, one House member responded, "Thanks for your explanation of geopolitical priorities," according to another member who was in the room, and who like other lawmakers spoke on the condition of anonymity because the meeting was closed.
Biden replied, "But I also get local political priorities."
At another point, the vice president glanced at the House minority leader, Rep. Nancy Pelosi of California, and in a specific reference to trade promotion authority, said, "Nancy, I know it's not coming up now," according to a person in the room.
Last month, the Senate majority leader, Harry Reid of Nevada, said he had no plans to schedule a vote on trade promotion authority. On Wednesday, Pelosi told reporters that giving Obama that authority was "out of the question."
Economists say that with the U.S. on the mend and the international trading system still open, the volume of global trade would most likely increase, even if these trade deals were never completed.
"But it would make U.S. trade policy dead in the water, probably for the rest of the Obama administration," said I.M. Destler, an expert on global trade at the University of Maryland.
Obama, who spoke to Democrats after Biden, did not mention trade in his brief remarks and instead focused on issues on which the Democrats are generally united, like raising the federal minimum wage and overhauling the nation's immigration laws.
Some analysts credited the administration for working hard to promote the trade deals. Last year the White House moved Michael B. Froman, a top-ranking international economic official, to be the U.S. trade representative. Obama plans to travel to Japan, South Korea, Malaysia and the Philippines next month for a trip that will focus heavily on trade.
"If the Democrats on the Hill seem to be reluctant to embrace the deal, and they do, the only question is whether the White House is willing to use the tools at their disposal to change some minds," said David Rothkopf, who worked on trade issues in the Clinton administration.
Trade has long divided Democrats, pitting their business-friendly moderate wing against key allies in organized labor. And in the midterm elections, when key Democratic voting blocs tend to stay home, the party badly needs the unions to get out the vote in November.
The remarks by the president and the vice president come as both parties paper over divisions before the election season. Speaker John A. Boehner of Ohio heeded warnings from his Republican members and postponed efforts for an immigration overhaul to avoid the spectacle of intraparty warfare on the issue.
Fast-track trade authority is the issue on which the White House and congressional Democratic leaders are most obviously at loggerheads. In the past two weeks, Republicans have taken to publicly goading Obama to move forward on it, saying it was an area in which Republicans and the White House could work together to create jobs.
"With our economy in such dire straits these days, opening new opportunities for American goods through trade should just be a no-brainer," said Sen. Mitch McConnell of Kentucky, the Republican leader.