President Obama had a rare bipartisan economic success this week when Congress passed three trade deals.
Obama is going to Detroit on Friday with South Korean President Lee Myung-bak to take a victory lap. But some important parts of Obama’s base are not fans of these deals — with South Korea, Panama and Colombia — which could have political consequences for the president.
Friday’s event is at a General Motors plant. The auto industry and its workers are big fans of the free trade deal with South Korea, so they’re sure to give the world leaders a warm welcome.
The reception might have been different if the event were at a steel mill.
Leo Gerard, international president of the United Steelworkers, says the union opposed the agreement “’cause it’s a bad deal, that’s why.”
“We’re going to fight like hell to make sure we don’t lose jobs,” he says. “But what it does is it puts us again on an unlevel playing field.”
In any free trade deal, there are industries that win and those that lose; products that can be exported successfully and those that can be imported more cheaply.
Obama emphasized the winners at a news conference Thursday.
“From aerospace to electronics, it will increase American manufacturing exports, including those produced by our small businesses. It will open Korea’s lucrative services market,” he said. “And I’m very pleased that it will help level the playing field for American automakers.”
But while he concludes that this deal is ultimately an economic win for the country, politics are a different equation.
Pluses And Minuses
Economist Adam Hersh with the left-leaning Center for American Progress says there’s a long history of union opposition to free trade deals. Unions worry about competing with low-wage workers abroad. Those most likely to be hurt by the deals tend to be older and less educated — they’re less able to move or change fields.
“They’re also in swing states that over the past two decades have really seen the ravages of import competition and jobs that have moved overseas,” Hersh says. “It’s these people that are going to be affected, and they will be active in voting.”
For example, America’s top steel states include Ohio, Pennsylvania and Michigan. Those are also swing states where Obama depends on union support for his re-election.
The administration recognizes that these trade deals may sacrifice some jobs in exchange for growth elsewhere. Brian Deese of the president’s National Economic Council says that’s why Obama insisted that the agreement include something called trade adjustment assistance.
“That’s a vital program that says for workers who have been affected by trade, that they can get access to training, access to health care,” he says.
Deese says the jobs plan that Obama continues to push includes other measures to help these workers.
“One of the ideas in the American Jobs Act is for wage insurance, which basically says if you lose a job that pays at a higher salary, the government will come in and pay a portion if you need to take a job that initially starts you at a lower salary,” he says.
‘Mud In The Eye’?
But most workers would rather not have to find a new job in the first place, especially in this economy.
Glenn Hurowitz of the liberal Center for International Policy says these deals demoralize some Obama supporters.
“These free trade deals really throw mud in the eye of core Democratic constituencies,” Hurowitz says. “And it’s hard for me to see how that adds up to victory for him, especially when he’s got declining enthusiasm among other key elements of his coalition.”
Of course, the president’s job is to govern, not just campaign.
Meredith Broadbent of the Center for Strategic and International Studies says a 21st century economy must be flexible in order to grow. Jobs will inevitably move from one state, or one industry, to another, she says.
“I guess we can expect there’ll be adjustments in certain areas, but it is more, I think, a function of a fast-moving economy with high productivity than a direct impact of any potential imports from Korea,” she says.
And even among the trade deals’ opponents, Gerard of the steelworkers’ union takes a broad view.
“I’ve been married to my wife for 42 years. We don’t agree every day and I’m still married to her,” he says. “And that’s my president. On this issue, I disagree with him tremendously. But he’s doing lots of other things that I agree with, and I’m going to work real hard to make sure he’s re-elected.”
The Obama campaign can only hope that other frustrated supporters take the same perspective.