As one of the first major acts in its lame-duck session, the House of Representatives is expected to vote to approve permanent trade relations with Russia, possibly by Friday, but free-trade deals might face a considerably tougher go in 2013.
At least that’s the prediction of opponents, who say that the 2012 election campaigns further soured Americans on global trade, as they were exposed to tons of China-bashing and scores of negative ads on job offshoring, from the presidential candidates on down the ballot.
Many of the candidates for Congress who made a particularly big deal out of their opposition to trade agreements wound up winning. They included Democratic Sen.-elect Heidi Heitkamp of North Dakota and a handful of incumbents in contested races, such as Democratic Sens. Claire McCaskill of Missouri, Bob Casey of Pennsylvania and Jon Tester of Montana.That will make it more difficult for Congress to approve trade deals and for the Obama administration to win public backing for its huge new Trans-Pacific Partnership trade agreement next year, said Lori Wallach, the director of Public Citizen’s Global Trade Watch.“Across the country Americans have been marinated in election ads that focused on the damage of bad trade agreements, which only reinforces their anger – and the demand to do something about it,” Wallach said.
A study by Public Citizen, a consumer advocacy organization, found that of the more than 125 trade-related ads deployed in congressional campaigns in 30 states this year, only one ad from one candidate – Republican Senate candidate Linda Lingle, who lost her race in Hawaii – featured support for free-trade agreements.
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In Senate races, winning candidates ran anti-trade ads in 13 states: Connecticut, Indiana, Michigan, Minnesota, Missouri, Montana, New Jersey, New Mexico, North Dakota, Ohio, Pennsylvania, West Virginia and Wisconsin. McCaskill ran anti-trade ads even though she’d voted for free-trade agreements in the past, the study said.
In the presidential race, the number of trade-related ads rose from 10 in 2008 to 33 this year, with most of them critical of offshoring and calling to get tougher with China on trade enforcement, the study found.
That came as a surprise even to longtime trade watchers.
“I think it’s remarkable that the Republican presidential candidate had as a central part of his plank trade enforcement – trade enforcement with China. That’s never happened before,” said Bill Frymoyer, a trade expert at the Washington law firm Stewart and Stewart whose experience dates to the early 1990s, when he worked on the North American Free Trade Agreement as a top aide to then-House Democratic leader Dick Gephardt.
President Barack Obama ran 21 trade-related ads this year, compared with nine in 2008.
Looking ahead, Frymoyer said, it’s clear what to expect from the White House next year: “It’s no secret he’s going to be as aggressive, if not more aggressive, on China in his second term.”
Others wonder whether this year’s campaigns really are likely to result in any major change.
Trade pacts always draw a mixed reaction on Capitol Hill, said Joshua Meltzer, a fellow with the Brookings Institution, a center-left research center in Washington, who specializes in the global economy and development.
“I don’t see the election as having necessarily an appreciable impact on the challenges that already would exist in terms of actually getting something through Congress on the trade front,” he said.
Despite the negative ads, Meltzer said, it will be important for Obama to increase U.S. cooperation with China if he’s serious about doubling exports during his presidency. But advancing the relationship will be “rather difficult” as concerns linger that unfair business practices in China are hurting the U.S. economy, Meltzer said.
As one possibility, he suggested that Obama could seek to do more business with China as it moves aggressively to develop more renewable energy, also a top goal of the president.
The Trans-Pacific Partnership, which the Obama administration is negotiating privately with 10 other countries, got little mention in this year’s campaigns. But after Congress and the president sign off on normalizing trade relations with Russia – the House will begin debating the deal Thursday and it’s likely to vote Friday, sending it to the Senate for final approval – the Trans-Pacific Partnership will be the biggest agreement remaining.
The Trans-Pacific deal, expected to be the largest trade agreement in the nation’s history, is thought to be in its final stages, with a 14th round of negotiations set for next month.
The main outstanding issue the Trans-Pacific Partnership faces is whether to allow Japan to join, Meltzer said. He added that such a move would give the agreement “economic heft” and that it should remain a top priority for the president.
Once it’s concluded, critics say, the agreement is sure to face a storm of opposition in Congress, particularly if U.S. negotiators ban “buy American” preferences for U.S. manufacturers.
Critics say the ban would give companies in participating countries equal access to U.S. procurement contracts. As a result, they say, Chinese government-owned firms in Vietnam might get equal treatment with American firms in winning contracts for goods and services bought by the U.S. government.
In May, a group of 69 House members wrote a letter to Obama, warning that such a move would be a big blow to the nation’s economy and that “we simply cannot allow this to happen.”
Wallach, of Public Citizen, said there was a “large disconnect” as the Trans-Pacific Partnership proceeded and the public’s opposition to trade agreements grew, setting the stage for a big clash on Capitol Hill.
“It’s like a train wreck,” she said.