Clinton faces early test on U.S.-Pacific Rim trade deal fight

Hillary Clinton talks with reporters as she campaigns at Kirkwood Community College in Monticello, Iowa April 14, 2015. REUTERS/Rick Wilking

By Richard Cowan WASHINGTON (Reuters) - Less than a week after formally launching her presidential campaign, Hillary Clinton is already being tested on a thorny issue for Democrats: free-trade deals and their impact on workers. The issue is a backdrop for almost any global economic affairs debate in Washington, with many Democrats and their backers arguing that free-trade deals help big corporations, but drive American jobs abroad to cheaper labor markets. On Thursday, the debate rose to a full boil when members of Congress from both parties announced legislation that would give President Barack Obama the "fast-track" trade negotiating authority he needs to complete a massive Asia-Pacific free-trade deal. Over two days of campaigning in Iowa this week, where she discussed economics, Clinton, who is the commanding front-runner to be the Democratic nominee for the 2016 election, uttered not a word about the potential Trans-Pacific Partnership (TPP) between the United States and 11 other Pacific Rim countries. If Obama does not get fast-track "trade promotion authority" (TPA) from Congress setting rules for debating TPP, it will be nearly impossible to complete the sprawling pact that aims to lower trade barriers and further stimulate trade with countries ranging from Australia, Japan and Chile to Singapore and Vietnam. The TPA fight in Congress could be over this year, long before the election campaigns really heat up. But if Congress approves fast-track, the second chapter - an up-or-down vote by Congress on whatever TPP deal Obama agrees to - could be raging as the November 2016 election nears. "She puts herself in a very difficult position no matter what she says" about trade, said Paul Sracic, who heads Youngstown State University's Politics and International Relations Department in Ohio and focuses on global trade. That is because Clinton, who has spent decades in the national limelight including as secretary of state from 2009-2013, could face attacks from many angles, especially in swing states like Ohio that could decide who wins the White House. If Clinton were to align herself with the labor unions - a position that would also put her in the same camp as conservative Tea Party Republicans - that are already trying to defeat TPA and TPP, she could win points in Ohio, Nevada and other states rich in organized labor votes. But at the same time, she would be distancing herself from some of the work she did when she was a top official in the Obama administration at the exact time Obama, her ex-boss, is traveling the country selling the free-trade deal. "One of her primary accomplishments as secretary of state was the so-called Asia pivot" that refocused U.S. diplomacy away from the Middle East and toward the Asian countries that are central to the TPP, Sracic noted. Conversely, if Clinton were to embrace the pact and campaign on it, she would put herself at odds with Democratic stalwarts such as former Ohio Governor Ted Strickland who is running for a Senate seat and Senator Sherrod Brown, also from Ohio, who opposes the fast-track legislation as drafted and is prodding Clinton to make her views known. CAUTIOUS RESPONSE SO FAR For the moment, Clinton's response was noncommittal. In a statement on Friday, Clinton spokesman Nick Merrill said Clinton believes the United States "should be willing to walk away" from any trade measure that does not "protect American workers and create more good jobs at home" while also strengthening national security. Clinton, he said, "will be watching closely" to see how the final deal tackles currency manipulation, labor rights and other contentious issues. The AFL-CIO, the largest U.S. labor organization, is already working to stop the trade deal and is urging its members to sign a petition "and tell Congress to stop the fast-track bill; it's undemocratic and bad for working families." Meanwhile former Maryland Governor Martin O'Malley, who is considering challenging Clinton for the Democratic presidential nomination, on Friday laid down a marker when he blasted TPA and said, "Chasing cheaper labor abroad will not help us build a stronger economy here at home." Labor was a power to be reckoned with when TPA was before Congress in late 2001. At the time, the House of Representatives voted 215-214 in favor of giving then-President George W. Bush fast-track negotiating authority. A mere 21 Democrats voted yes while 189 voted no. That is a stark result that Clinton likely will weigh when forming and explaining her position to voters. A senior House Democratic aide said Obama will "have to make a strong case" for TPA and TPP and "educate a lot of people" to win the day. (Additional reporting by Jonathan Allen n New York; Editing by Kevin Drawbaugh and Frances Kerry)