Obama's Position On Free Trade Marks Subtle Evolution

Two decades after NAFTA created a giant North American free trade zone, the U.S. is negotiating more big trade deals that would span the Atlantic and Pacific oceans. President Obama has embraced the potential agreements as a way to improve the U.S. economy.

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DON GONYEA, HOST:

This is MORNING EDITION from NPR News. I'm Don Gonyea sitting in for our regular hosts. When lawmakers return after the holidays, they'll have to decide whether to give President Obama a green light on trade negotiations. The administration is working on two big deals to lower trade barriers across the Atlantic and Pacific oceans.

The push comes two decades after the North American Free Trade Agreement created a giant free-trade zone on this continent and ignited a generation of controversy. Barack Obama criticized NAFTA when he was first running for president, but as NPR's Scott Horsley reports, he now promotes trade deals as a way to boost the U.S. economy.

SCOTT HORSLEY, BYLINE: At the bustling port of New Orleans last month, President Obama waxed poetic about the barges wending their way down the Mississippi River from his home state of Illinois, loaded with corn and wheat for customers all around the world.

(SOUNDBITE OF SPEECH)

PRESIDENT BARACK OBAMA: Right now, exports are one of the brightest spots in our economy, thanks in part to new trade deals that we signed with countries like Panama and Colombia and South Korea.

HORSLEY: Obama largely inherited those deals from the Bush Administration, though he did make some modifications, and he shepherded the agreements through Congress. Now he's pursuing two of his own free-trade initiatives: one between the U.S. and Europe, the other with nearly a dozen countries around the Pacific.

(SOUNDBITE OF SPEECH)

OBAMA: We're working on new trade deals that will mean more jobs for our workers and more business for ports like this one.

HORSLEY: But the president also recognizes that globalization comes with a price. Back in 2008, when he was stumping for Midwestern votes and trying to distinguish himself from Hillary Clinton, Obama was highly critical of the free trade deal called NAFTA that Bill Clinton had signed. As a freshman senator, he'd traveled to the town of Galesburg, Illinois, where the local Maytag refrigerator factory had shuttered its doors and transferred the work to Mexico.

(SOUNDBITE OF CAMPAIGN SPEECH)

OBAMA: I met union guys who worked at the plant for 20, 30 years and now wonder what they're going to do at the age of 55 without a pension or health care.

HORSLEY: Candidate Obama had been tapping into increasingly skepticism about the benefits of free trade. Three times as many Americans now think trade deals hurt the U.S. as believe they help. Dartmouth economist Matthew Slaughter says it's not just factory workers who worry about overseas competition.

MATTHEW SLAUGHTER: It used to be globalization was something that affected less-skilled workers in manufacturing. And I think the potential pressures of globalization are far broader today and much further up in the educational ladder.

HORSLEY: Members of Congress hear those concerns when they're home on the weekends, and that's made many lawmakers skittish about approving new trade deals. Last month, more than 150 House Democrats and nearly two dozen House Republicans said they would not give the president fast track authority to negotiate the Pacific trade deal unless they were allowed to attach major conditions.

Connecticut Democrat Rosa DeLauro insists, among other things, any deal must crack down on currency manipulation, which makes other countries' products artificially cheap.

REPRESENTATIVE ROSA DELAURO: We are for trade. What we are not for is the loss of intellectual property, the loss of jobs, the loss of technology, over and over and over again, which puts us at a disadvantage, and we are not going to take it.

HORSLEY: Thus far the administration has been reluctant to include currency provisions in the trade agreement, preferring to attack that problem by other means. But the president says his trade deals will include more safeguards than NAFTA did. Economist Slaughter says that's one reason today's pacts are so hard to negotiate.

SLAUGHTER: You're no longer talking about what happens at the border of a country, not just the border taxes that are collected at the ports, but you're talking about the rule of law inside those countries. That's what matters, but how you negotiate the laws and the practices is a lot harder to do than just talking about tariffs at the border.

HORSLEY: Obama also says free trade must be accompanied by a stronger safety net, including health care, for those Americans whose lives are disrupted. This past summer the president returned to Galesburg, Illinois, where the old Maytag factory is still vacant. He talked about possibly putting a new manufacturing institute there to develop new products and teach new skills. But he did not suggest the U.S. close its doors to trade with the rest of the world.

(SOUNDBITE OF SPEECH)

OBAMA: Technology and global competition, they're not going away. Those old days aren't coming back. So we can either throw up our hands and resign ourselves to diminishing living standards, or we can do what America has always done, which is adapt, and pull together, and fight back, and win. That's what we have to do.

HORSLEY: For the president, that plan now includes the aggressive pursuit of new markets in fast-growing economies around the world - if Congress gives him the authority to do so. Scott Horsley, NPR News, Washington.

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