Boeing CEO urges Democrats to move forward on trade deals

The chairman of President Barack Obama’s export council on Thursday said the Democratic president holds the key to moving forward with three trade agreements that have been stuck in Congress for several years.

The three deals, with South Korea, Colombia and Panama, all face significant opposition from labor unions and divide the Democratic Party, meaning only a significant push by Obama is likely to dislodge them, said James McNerney, Boeing’s top executive and an adviser to Obama on exports.

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“A Democratic president is the only one who can get them done, because the constituencies that tend to stand in the way of these things are constituencies that have a working relationship with the president,” McNerney said in an address at the Woodrow Wilson Center in Washington.

“I am hopeful that President Obama will use the power of his position to break through this gridlock that is holding our exporters and their workers back from winning new customers in new markets.”

Obama in his State of the Union set a goal of doubling U.S. exports over the next 10 years. The objective was set forth as part of a multi-pronged strategy to strengthen the U.S. economy, partly by focusing on exports.

Supporters of the three trade agreements, which were all negotiated by the George W. Bush administration, have questioned how Obama can double U.S. exports without aggressively moving forward with the deals, particularly the agreement with South Korea, which would represent the largest bilateral U.S. trade pact since the North American Free Trade Agreement (NAFTA) with Canada and Mexico.

McNerney warned that a failure to approve the free trade agreements will leave the United States at a “significant disadvantage” to other nations that are working to lower barriers to their exports.

Action “is absolutely imperative, in my view, for our nation,” McNerney said. “I’d get going right now.”

Obama appointed McNerney in March to the President’s Export Council (PEC), which advises the president on matters relating to U.S. export trade.

The group offers report to the president through the Commerce secretary on its activities and recommendations.

The president appoints the private-sector members of the council, while five senators are appointed by the Senate president and five House members are appointed by the Speaker.

McNerney acknowledged he was wading into politically difficult territory.

Unions oppose all three deals, and have particularly pushed back against the pact with Colombia, which they argue has not done enough to investigate, prosecute and convict those responsible for violence against labor organizers.

Bush attempted to move the Colombia deal in 2008 under “fast-track” rules that he thought would guarantee the agreement an up-or-down vote with Congress. Speaker Nancy Pelosi (D-Calif.), however, rejected the move by having the House approve new rules that nullified the fast-track process.

The South Korea trade deal is opposed by the United Auto Workers and Ford Motor Co. With Rep. Sandy Levin (D-Mich.) helming the House Ways and Means Committee, which has jurisdiction on trade, its prospects are also seen as dim.

Trade proponents see the smaller Panama agreement as having the best chance to move through Congress, but it is doubtful that Obama will want to expend any political capital on the three deals this year, particularly with Democrats facing a tough election season this fall.

Obama told business officials last week that he wanted to move forward on the agreements, but did not offer a timetable. He supported a free trade agreement with Peru that the Democratic Congress approved in 2007.

“The president has acknowledged, however, that our country is stuck in a debilitating gridlock between those who are too inclined to endorse free trade and those who are too fearful of import competition,” McNerney said.

He also warned that other countries are moving forward with trade deals that would leave U.S. companies disadvantaged in competing in foreign markets.

“They are languishing while our competitors are moving forward with their own FTAs with these countries and with new bilateral and regional negotiations to give their exporters and their workers a competitive edge,” McNerney said.

McNerney said that the free trade agreements will lead to job creation in the United States, but they have to be accompanied by the creation of an enforcement program to ensure that the trading partners live up to their existing trading agreements.

Boeing’s CEO also called for a boost in commercial diplomacy initiatives to help exporters win new international customers. He said that the Obama administration started to develop such initiatives and has already exercised its commercial diplomacy on behalf of Boeing.

“As a sidebar, China is outgunning us” across the world with these kinds of initiatives, McNerney said.