5 day forecast
Trade issue may prove balancing act for Obama
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This week and next, President Barack Obama will appear in the David L. Lawrence Convention Center addressing two different audiences hoping to hear quite different things on the difficult issues of world trade.
On Tuesday, the president will appear before officials of the AFL-CIO, many of whom are hoping that the candidate they supported with money and campaign troops will take a more assertive approach to shielding American jobs from foreign competition.
The following week, Mr. Obama will host world leaders who share broad agreement on the desirability, if not the means, of reviving a long-stalled round of comprehensive trade talks aimed at increasing the flow of goods across borders.
While labor's view on trade is not uniform -- it's a bigger issue for traditional manufacturing unions such as the United Steelworkers of America than for those concentrating on the service end of the economy -- many labor leaders have high hopes this administration would respond to the critiques they have pressed against the free trade consensus that flowed through recent administrations of both parties.
The last time a national AFL-CIO convention was held in Pittsburgh, in 1997, delegates gave a tepid response to President Bill Clinton, who had angered many of them by shepherding congressional approval of the North American Free Trade Agreement and a measure that extended permanent trade relations with China.
In April, in his first appearance at an international forum, Mr. Obama joined other G-20 leaders in London vowing to avoid the kinds of protectionist measures economists blame for deepening and prolonging the Great Depression of the 1930s. The leaders reiterated an oft-stated goal of moving to complete the international trade negotiations -- known as the Doha Round -- designed to loosen restriction on trade, particularly commerce intended to accelerate the spread of prosperity to developing economies.
One insight into how the Obama administration will juggle the demands of these sometimes conflicting constituencies came Friday night, on the eve of the AFL-CIO gathering, when the president issued a proclamation imposing three years of tariffs on tires manufactured in China.
The highly anticipated case was brought by the USW, contending that a surge in lower-cost tire imports had come at the cost of American jobs. The USW has represented workers in the tire industry since its 1995 merger with the United Rubber Workers union.
While the tariff levels -- 35 percent the first year, 25 percent in the third year -- were less than the maximum of 55 percent recommended by the U.S. International Trade Commission, the order was welcomed by labor leaders.
"It sends a strong message that the U.S. government will take the necessary action to ensure that American workers and producers can compete on fair terms in the global economy," AFL-CIO President John Sweeney said.
But the move was a rebuff to the Chinese leaders who will arrive in Pittsburgh just a few days after the labor officials depart. The Associated Press quoted a Chinese government statement issued yesterday condemning the tariff as a violation of international trade laws.
The tire case is just one example of the mosaic of frictions and grievances that the world's economies would have to smooth over if they are to be successful in the broader trade talks that world leaders have repeatedly endorsed.
Experts said trade officials throughout the world are searching for some guidance to what overall balance the administration may strike in seeking to boost American employment while honoring its general pledges to promote wider world trade.
"Obama has no trade policy," C. Fred Bergsten, director of the Peterson Institute for International Economics, said. "The administration has yet to adopt any trade policy [because] there is deep division in the party on trade."
While they championed his election and are certain to give the Democratic president an enthusiastic welcome Tuesday, some labor leaders are similarly in suspense on just how their priorities will mesh with those of the new administration.
"If you talk to labor leaders, there's a certain amount of quiet frustration, not just with trade, but with EFCA [the stalled Employee Free Choice Act], and the administration in general," said Philip M. Dine, author of "State of the Unions," a study of the labor movement's political status and prospects.
"[Mr. Obama] still has a reservoir of goodwill. They don't want to be seen joining what they see as unfair right-wing attacks, but some of them are biting their tongues on different issues."
Trade issues were problematic for Mr. Obama in the 2008 campaign as well. He assailed then-Sen. Hillary Clinton over her husband's role in securing NAFTA's ratification. The attacks came despite the fact that the senators had essentially indistinguishable positions on trade. Mr. Obama endorsed Mrs. Clinton's promise to renegotiate NAFTA. Now, however, there is no reasonable expectation that his administration will follow through.
Pennsylvania's two U.S. senators have spoken out in favor of a tough line on the Chinese tire case. But last week, Sen. Bob Casey acknowledged it is not clear where the administration's overall trade lines will be drawn.
"The decision the president makes [on the tire case] will be significant, but I'm not sure it's going to be the entire presentation of their trade policy, or the full articulation of their trade policy," Mr. Casey said.
The Democrat argued that it was reasonable that the crafting of comprehensive trade policy would take a back seat to the all-consuming pressures of responding to the financial crisis and attempting to revamp the nation's health-care system.
"I'm not sure where the administration will land ultimately on the broader trade debate, whether it will be a more traditional [Democratic] approach or whether it will be more of a hybrid approach," Mr. Casey said. "The way he approaches complex issues like this -- I believe he tries to be as nonideological as possible, and I think that will inform his decision-making."
After a meeting of trade ministers earlier this month in India, U.S. Trade Representative Ron Kirk issued a statement that struck optimistic notes on the prospect of reviving the Doha talks but stopped well short of a prediction that they could meet a goal of completion any time soon.
In London, the G-20 leaders underscored their intent to revive the talks. International trade officials will meet this week in Geneva, Switzerland, again seeking the breakthrough that has proved so elusive.
"On trade, in the April G-20 summit in London there was an effort to give more momentum to the trade negotiations ... and we're likely to take up that issue again in September," said Michael Froman, deputy national security adviser for international economic affairs.
But that's a goal world leaders have set and missed in the past.
"They give lip service every time," said Mr. Bergsten. "[But] they have not addressed any of the specific hurdles ... I do not see an early prospect [of progress]."
First Published September 13, 2009 12:00 am
