WASHINGTON – Very few issues push conservative Republican Rep. Michele Bachmann into the same ideological camp as liberal Democratic Rep. Keith Ellison.
Likewise, Republican Reps. Erik Paulsen and John Kline rarely back a Barack Obama initiative while Democratic Reps. Rick Nolan and Collin Peterson blast the president.
Turns out that free trade may make stranger bedfellows than politics.
The current split in Minnesota’s congressional delegation reflects the country’s deep, complicated divide over opening international markets. With negotiations ongoing for trade deals in Europe and Asia that will affect 60 percent of the global economy and more than half of U.S. trade, everyone agrees that what happens is very important. But that often seems to be the only thing they agree on.
“We’ve been through this so many times over the past 25 years,” said University of Minnesota economist Tim Kehoe. “The same issues get brought up time after time.”
Raised, he added, but never resolved.
At issue is whether free trade helps or hurts American workers. Both sides insist they have the numbers to make their case.
With America home to only 5 percent of the world’s consumers, American manufacturers “can’t sustain, much less grow, jobs without access to markets outside the U.S.,” said Linda Dempsey, vice president of international economic affairs for the National Association of Manufacturers. The association’s board includes officers of three of Minnesota’s biggest companies — Cargill, 3M Co. and UnitedHealth Group Inc. Other groups pushing free trade list among their members three other major Minnesota-based businesses: Medtronic Inc., Target Corp. and General Mills Inc.
Lori Wallach, director of the global trade-watch program at the consumer group Public Citizen, counters that free trade agreements have not opened foreign markets for the U.S. but have instead increased trade deficits that cost American jobs. She said the split over free trade “is not a partisan divide so much as a corporatist-populist divide.”
Wallach says Public Citizens keeps a database of workers the government has certified as displaced by “trade adjustment” since 1994. In mid-2013 that number stood at 845,000, with 39,251 from Minnesota.
In contrast, Paulsen, one of Congress’ most avid free traders, points to 750,000 Minnesota jobs now supported by foreign sales. The state’s growing international trade “leads to more jobs and a healthier economy for Minnesota,” Paulsen said.
Nolan, who questions free trade agreements as vocally as Paulsen promotes them, disagrees. “So-called free trade creates a fundamental unfairness over the lifetime of an agreement,” Nolan said. “We tell American workers to go and compete with countries that don’t pay living wages.”
These dueling viewpoints define much of the debate for policymakers as negotiations proceed on the 11-country Trans-Pacific Partnership (TPP) and the 28-country Transatlantic Trade & Investment Partnership (TTIP).
But there is also the issue of trade promotion authority. The Obama White House, like Republican and Democratic administrations before it, wants dispensation from normal legislative processes in order to negotiate trade agreements that Congress can approve or disapprove, but cannot amend.
Paulsen, Kline seek middle way
Paulsen, who is set to launch a TTIP congressional caucus next week, and Kline support a new House bill that gives Congress a bigger say in setting trade objectives, but still allows only a yes-or-no vote and no amendments to the deals the executive branch strikes.
Cargill, the Minnetonka-based agribusiness giant that is America’s largest privately owned company, says trade promotion authority is “most critical” to provide leverage in wide-ranging trade talks.
“Tariffs are not the only barriers to trade,” said Devry Boughner Vorwerk, Cargill’s director of international business relations. “In fact, non-tariff barriers are the most harmful to U.S. companies in foreign markets. It is important that trade deals address the other forms of protection that governments apply to keep out U.S. goods, capital and services.”
But giving up power over trade bands many on the right and the left together to emphatically shout, “No.”
“Members of Congress can’t see what’s going on,” said Ellison, who was among 151 House Democrats — including Minnesota’s Tim Walz, Collin Peterson, Betty McCollum and Rick Nolan — to sign a letter to Obama opposing trade promotion authority.
Bachmann signed a letter along with 26 other House Republicans saying they would not “cede our constitutional authority” to control trade.
Democratic Sen. Al Franken was among 12 senators who wrote to Majority Leader Harry Reid in January expressing “deep concern” about reviving trade promotion authority, which expired in 2007.
If trade agreements are done right, they benefit everyone, Franken said. But past deals have lacked “transparency and mechanisms for enforcement.”
“I think we saw some agreements that were not what they were sold to Americans as,” Franken said. “The result of the North American Free Trade Agreement was that we lost jobs. People are wary of that.”
Current negotiations should address “job training assistance, intellectual property provisions, labor rights and environmental standards,” Sen. Amy Klobuchar said.
As the political battle is joined, many economists, including Kehoe, echo a hard truth:
“There are a lot of types of jobs that existed in the U.S. 30 and 40 years ago that don’t exist now,” he said. “Would we still have those jobs if we were not open to free trade? I think the answer is no.”
Unmet expectations are another problem.
“Historically, agriculture has been for free trade agreements without reservation,” said Peterson. “That’s different this time.”
Earlier free trade agreements that were supposed to increase foreign sales of meat, crops and dairy products did not, Peterson said. “It’s a heavy lift politically,” he said of free trade.
“Trade is often cited as the reason for job loss in the United States,” Cargill’s Vorwerk explained. “We would submit a counter view. … Without these agreements, U.S. farmers, ranchers, and businesses of all sizes would not even have the opportunity to compete in these markets.”