Trade Issues Remain Top of Mind Following Election
President Barack Obama and challenger Mitt Romney waged a furious campaign in Ohio over job offshoring and who would be tougher on China’s trade practices. But with that battle done, economists, trade experts and business people want to know where national policy goes from here.
Beyond messaging and campaign narrative, the ads force questions for Obama and Congress.
The controversial Trans-Pacific Trade Partnership agreement linking the U.S. and Asia-Pacific nations is still under negotiation and could end up in a political fight next year. The $300 billion annual trade deficit with China shows no sign of waning.
The ad themes resonated beyond Ohio, a state hit hard by factory closures and offshoring, say studies by Public Citizen and the Alliance for American Manufacturing, organizations that advocate for balanced trade and tougher enforcement of trade violations. The ads stirred public opinion already weighing against a “free trade” status quo, the groups said.
The election results could push Congress to stronger domestic manufacturing policy and a harsher stance toward nations that violate trade rules, they said.
Public Citizen said winning candidates used critical ads in Senate races in Connecticut, Indiana, Michigan, Minnesota, Missouri, Montana, New Jersey, New Mexico, North Dakota, Ohio, Pennsylvania, West Virginia and Wisconsin. Analysis of the voting record of incumbents and detailed public positions of new candidates found that the election increased the net number of “fair-trade” Senators by at least six, including the addition of some long-time “fair-trade champions.”
In the House of Representatives, too many candidates’ positions remain unknown to assess the results, Public Citizen said.
Which directions Obama will go – and how aggressively – in his second term is key, asks Lori Wallach, director of Public Citizen’s Global Trade Watch, which opposes the Trans-Pacific as “NAFTA on steroids.”
“Will he govern to fix the causes of the job offshoring crisis that he highlighted during the election, will he stand up for the middle class the way he campaigned and turn around our trade policy, or will he use the rhetoric on offshoring to push forward a 1 percenter trade agenda and push more jobs offshore?” she said. “Obama has heightened public expectations for something different.”
“Both the Democratic and Republican candidates spent a stunning amount of money on television advertising to convince voters that they could best represent the interests of America’s manufacturers and their workers,” Scott Paul, executive director of the Alliance, said. “Obviously they latched on to the right issues because jobs and outsourcing are absolute, top-of-mind issues. Across the partisan spectrum, these issues move voters.”
Job offshoring was by far the most prominent trade-related theme in the 2012 election for both GOP and Democratic Party candidates, said Public Citizen, a nonprofit watchdog group started by Ralph Nadar.
Paid ads condemning offshoring were 72 percent of trade-related ads in open and competitive congressional races, and 64 percent in the presidential race. Congressional candidates in 30 states deployed more than 125 ads criticizing the economic fallout of status quo trade policy, Public Citizen said.
Offshoring criticism also dominated campaign websites, including 48 percent of the trade mentions on congressional websites in open and competitive races, and 54 percent on the presidential campaign sites, it added.
Public Citizen said that the presidential candidates ran three times as many trade-related ads as in 2008, with state Congressional races following suit with criticism of the trade status quo, reinforcing public anger and building expectations for reform. Candidates who voted against free trade agreements touted fair-trade records, it added, while candidates, including incumbents who could not claim such a record, touted votes in favor of closing tax loopholes that incentivize offshoring, attacked their opponent on offshoring, or pledged to be “tough on China.”
The discussion won’t go away, predicts Montgomery County Republican Party chairman Rob Scott. He predicts Obama will pivot to a more aggressive stance.
“The U.S is a manufacturing juggernaut and yet we continue to have our lunch eaten by China,” Scott said. “People can say we are beyond manufacturing in the economy, but look at Great Britain and what happened to them. We have to manufacture items in this country – it’s blatantly obvious.”
Said Mark Owens, chairman of the Montgomery County Democratic Party: “There is a movement toward national reindustrialization. The fact is the auto industry rescue showed it can be successful in keeping jobs here. There will be a policy shift toward that.”
A report by Kantar Media’s Campaign Media Analysis Group for the Alliance for American Manufacturing, said more than 975,000 mentions were made in presidential TV ads about jobs, outsourcing, and trade, and Gov. Romney’s involvement with Bain Capital. The Alliance is a nonprofit formed in 2007 by U.S. manufacturers and the United Steelworkers that promotes “Buy American” at federal and state levels.
Kantar said it found $68 million spent on presidential campaign ads about trade. The two sides spent roughly the same amount on those ads, but all the Republican ad spend went to ads specifically mentioning China trade, Kantar said. Democrats spent $57 million in TV advertising attacking Romney’s former firm, Bain Capital, for alleged practices of shipping jobs overseas.
Public Citizen analyzed the broadcast TV advertising airtime devoted to the presidential race and Senate races in industrial states Indiana, Ohio, Pennsylvania and Wisconsin and also ads tracked in all 210 U.S. media markets, 11 national broadcast networks and more than 80 national cable networks.
“America’s airwaves were jammed with 30- and 60-second ads about persistent joblessness, the government bailout of the automakers, and the impact of outsourcing and trade—specifically, trade with China—on domestic employment,” Elizabeth Wilner, Kantar vice president, said. “Even in today’s service-and-dotcom economy, one of the most popular images in 2012 political advertising was the American factory. Americans see our nation as one that makes things and builds things.”
Public Citizen said senators elected with ads critical of trade include Ohio Sen. Sherrod Brown, a longtime, prominent trade critic.
In North Dakota, Senator-elect Heidi Heitkamp, also a Democrat, beat Rep. Rick Berg , a Republican, who voted for the Korea, Colombia and Panama free trade agreements in 2011.
Sen. John Tester, D-Montana, elected in 2006 on a campaign featuring his stance against harmful trade agreements, used ads on the theme. Tester beat GOP candidate Dennis Rehberg, who voted for trade deals during the decade-plus he served as Montana’s U.S. House representative.
Sen. Claire McCaskill, D-Missouri, used the theme to win re-election despite her support for the NAFTA-style deals with Korea and Panama Congress passed last year, Public Citizen said.
In Pennsylvania, Sen. Bob Casey, a Democrat, launched five different ads touting his record as a “fair-trader,” including his consistent opposition to NAFTA-style deals.
Among paid ads used by 294 campaigns, support for trade deals was limited to one ad by the GOP candidate for Hawaii’s open Senate seat, former Gov. Linda Lingle. She attacked Senator-elect Maize Hirono for opposing three free trade agreements while a House member. Hirono beat Lingle by 26 percentage points.
The nature of the presidential fight in Ohio and nationwide garnered heavy national and international media attention and was credited with increasing tensions between the world’s largest manufacturing powers. In the final presidential debate, Romney termed the U.S. trade relationship with China a “silent” trade war.
“Given Americans’ unhappiness with our trade status quo, the reason candidates nationwide continually spotlighted job offshoring and other damage caused by unfair trade was to win,” Wallach of Public Citizen said. “But the result is that Americans have been saturated with trade-related messaging that reinforces their anger about getting screwed by unfair trade, which creates heightened expectations that the people they just elected will do something to fix these problems and certainly not support more of the same.”