• Bloomberg


President Barack Obama, trying to sway skeptics on free trade among his supporters, said Friday that if the U.S. can’t come to terms on an accord being worked on with other Pacific nations, China will step in to fill the void.

Asia has the globe’s most populous and fastest-growing markets and the U.S. has to have access to sustain economic growth, Obama said at a White House news conference with Italian Prime Minister Matteo Renzi.

“If we do not help to shape the rules so that our businesses and our workers can compete in those markets, then China will set up rules that advantage Chinese workers and Chinese businesses,” he said.

Obama is trying to give momentum to a bipartisan deal announced Thursday for legislation that, if passed, would make it easier for the administration to negotiate trade deals. He is also seeking to close a deal with 11 other nations on an accord, the Trans-Pacific Partnership, that would cover about 40 percent of global trade.

U.S. Trade Representative Michael Froman is going to Tokyo this weekend for high-level talks aimed at narrowing differences between the U.S. and Japan, which are by far the biggest economies involved.

Froman said on Thursday that the broader group of countries is also nearing completion of the Asia-Pacific pact. “There are open issues across the agreement, but everyone is in a closing mode,” Froman said in Washington.

Froman’s trip comes ahead of a visit by Prime Minister Shinzo Abe to Washington on April 28.

Republicans, who hold majorities in the House of Representatives and Senate, have generally been supportive of free trade deals. Resistance is coming, instead, from Obama’s fellow Democrats.

New York Sen. Charles Schumer, the third-ranking Democrat in the chamber, said he has changed his mind since supporting previous free trade accords. While such deals may increase corporate profits and improve U.S. gross national product, middle-income Americans may suffer.

“Our middle class is hurting,” Schumer said at a hearing on Thursday. “All the evidence I’ve seen is that this hurts middle-class incomes.”

Obama praised the bipartisan deal on legislation to grant him what is known as fast-track negotiating authority, which was negotiated by Sens. Orrin Hatch, the Republican chairman of the Finance Committee that oversees trade policy, and Ron Wyden, the panel’s top Democrat. It would let the White House send Congress trade pacts for votes without amendments that would change the terms.

Wyden predicted the bill would emerge from the Finance Committee with Democratic support, and suggested the full Senate vote would be successful as well.

Ways and Means Committee Chairman Paul Ryan, a Wisconsin Republican, introduced a similar bill in the House.

Supporters of fast track need bipartisanship in both houses. Republicans control the Senate 54-46, but 60 votes are needed to advance legislation. In the House, a group of Republicans plan to oppose trade authority, so some Democrats are needed to get to a majority.

House Speaker John Boehner has said he needs Democratic votes to pass the legislation through his chamber.

In an interview Thursday with Fox Business, the Ohio Republican looked to ratchet up pressure on Democrats, saying he “can’t imagine” they would abandon the president “on one of his biggest remaining priorities.”

Eleven House Democrats have announced their support for granting Obama trade authority.

Organized labor, a crucial Democratic Party ally, has lobbied strenuously against the deal. The AFL-CIO has vowed to buy advertising targeting 16 senators and 36 House members seen as potential swing votes.

Obama, who pledged to double U.S. exports when he took office six years ago, said he understands that labor unions and middle-income Americans are wary about free trade accords that they blame for sending U.S. manufacturing jobs overseas. “People recognize that there have been circumstances in the past in which trade may have contributed to aggregate growth of the global economy or even the U.S. economy, but hurt workers,” he said. “And we’ve learned lessons from that.”

The legislation from Hatch and Wyden reflects those lessons, Obama said. Among its provisions, the legislation seeks to combat currency manipulation and end barriers to digital trade, according to a statement accompanying the measure.

Wyden also succeeded in adding language giving Congress the right to jettison the fast-track process if enough lawmakers find the president ignored negotiating goals.

Hatch has said he will hold a committee hearing April 23 to debate and then vote on advancing the bill.

The U.S. and the European Union are working on a similar pact.

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