Bloomberg: Why Obama's New Best Allies on the Hill Are CEOs

January 26, 2015

Before President Obama leaves office, he wants to complete two major free-trade agreements, one with Asian nations and the other with the European Union. To do it, he says he needs a guarantee from Congress that it will simply vote yes or no on any deal the White House offers, without trying to amend it.

[Reposted from Bloomberg  |  Carter Dougherty  |  January 22, 2015]

“I’m asking both parties to give me trade promotion authority to protect American workers with strong new trade deals from Asia to Europe that aren’t just free, but fair,” Obama said in his State of the Union address.

New Senate Majority Leader Mitch McConnell has pledged, uncharacteristically, to push for a vote to give Obama the negotiating authority he wants, known as fast track. “It’s an enormous grant of power from a Republican Congress to a Democratic president, but that’s how much we believe in trade,” McConnell told reporters in early January. “This is an area where we can make progress.”

The administration’s first priority is the Trans-Pacific Partnership, which would include the U.S., Canada, and 10 Asian countries. The deal covers a broad array of issues, including copyright protections and other regulations. Labor groups led by the AFL-CIO say it wouldn’t do enough to keep jobs in the U.S., while environmental groups want the White House to push for tougher standards overseas. Democrats leery of the deal find themselves aligned with Tea Party Republicans who oppose giving Obama carte blanche to negotiate. “I think that trade agreements in the past have not been good for American workers,” Nevada’s Harry Reid, who leads Senate Democrats, said in December. The House Democratic caucus is even chillier. “It surrenders the congressional authority that we may need to protect American workers and American consumers,” Representative Rosa DeLauro of Connecticut said at a Jan. 21 news conference.

A group of cabinet members led by Jeffrey Zients, director of Obama’s National Economic Council, meets weekly to plan ways to bring recalcitrant Republicans and moderate Democrats on board. “We now have the whole cabinet involved,” says Michael Froman, the U.S. Trade Representative. “Everyone understands that it’s now an administration-wide effort.”

U.S. Trade Representative Michael Froman

The White House is also enlisting help from the leaders of major corporations including AT&T, Caterpillar, and IBM. Under the leadership of the Business Roundtable, an association of U.S. CEOs, the U.S. Chamber of Commerce, and other organizations—a major donor to Republican candidates in national elections—business leaders have launched a new group, Trade Benefits America, to mount a national campaign to give the White House more trade negotiating authority. In some ways, it reprises the push business groups made more than 20 years ago to persuade congressional Democrats to vote for the North American Free Trade Agreement under President Clinton. “The history of the business lobby is that it arrives late,” says Bill Reinsch, president of the National Foreign Trade Council, which advocates for free trade. “But when it does, it arrives in full force.”

In recent weeks, top officials including Froman, Commerce Secretary Penny Pritzker, and Treasury Secretary Jacob Lew have met with dozens of executives to outline the administration’s strategy. “They demonstrated a very strong commitment,” says Tom Linebarger, chief executive officer of Cummins, a diesel engine manufacturer based in Columbus, Ind., who met with Obama adviser Valerie Jarrett at the White House in early January.

Giving the president trade authority “allows the U.S. to not only think big but actually get trade agreements enacted,” says Bill Lane, director of global government affairs for Caterpillar. “The business community fully understands that reality.” Caterpillar is angling for favorable treatment in the Asia trade deal on refurbished equipment. Employees sent 17,500 letters to members of Congress in support of fast track. The company is also mobilizing smaller suppliers who provide Caterpillar with parts for construction equipment sold overseas.

IBM has agreed to ask executives in all 50 states to invite members of Congress to tour plants in Minnesota, North Carolina, Ohio, and Silicon Valley that develop hardware and software for the global market. Lawmakers will also meet American employees in Iowa, Louisiana, or Missouri who handle data for IBM clients in Asia and Latin America. The executives will then spend several days in Washington reminding wavering legislators of the importance of what they saw. “The one thing that you have to see consistently, no matter what, is a rock-solid commitment from the president himself to move forward,” says Chris Padilla, chief lobbyist for IBM. “And I think it’s now clear that we have seen that.”

The bottom line: The White House is asking business leaders to help persuade Congress to give it authority in international trade talks.

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