Obama says Pacific Rim trade pact won't hurt auto workers

DETROIT, MI – Pres. Barack Obama said he has seen the damage a previous international trade agreement has wrought on automotive industry workers in the U.S., but that the Trans-Pacific Partnership should not be cause for concern. 

The TPP, a 12-country agreement of which negotiations now appear to be nearing a head, merely adapts to the inevitability of globalization, Obama said. 

The President made the comments Monday in an interview with Wall Street Journal, which also pressed Obama on why American workers, particularly those in the auto industry, should not be leery of another international trade agreement about 23 years after the North American Free Trade Agreement was signed.

The full transcript is here: WSJ Interview Transcript: President Obama on TPP, China, Japan, Pope Francis, Cuba

NAFTA, passed through Congress and signed by Pres. Bill Clinton in 1993, is credited with eroding some 700,000 jobs from the U.S. economy because of outsourcing to Canada and Mexico.

“When I was running for the U.S. Senate, I’d go into towns in Illinois that used to be strong manufacturing towns, and they had been hollowed out,” Obama told the WSJ. “And you’d meet workers that felt completely betrayed by, you know, the loss of good middle-class jobs – you know, if you went to a factory, you were willing to work hard, you could get ahead. And some people have been suspicious, feel burned from some of those experiences.”

But Obama argues that NAFTA’s negative results in terms of job loss should not be a reason to avoid entering new free trade agreements, such as the TPP. He, and proponents of the TPP, argue that the agreement between the U.S. and 11 countries in the Asia-Pacific area will be mutually beneficial to the economies involved, raising standards of living while also improving environmental regulations. The pact would open up markets throughout the Asia Pacific region to American exports, including cars. 

Obama also argues that it will help U.S. automakers sell vehicles in Japan, where American cars and trucks are now scarce.

Still, most details of the TPP have not been publicly released, fueling further concern from critics, especially because fast-track legislation that would reduce debate, bar amendments and effectively speed a vote on the trade proposal through Congress was introduced earlier this month.

Wikileaks has released some documents involved with the trade agreement. 

Obama argued to WSJ that because several components of the pact are unavailable because they are still in negotiations, and said the TPP still would be exposed to months of scrutiny before anything is signed. 

Meanwhile, the TPP in general has met resistance from several labor unions and several members of the Democratic party. 

Asked by the WSJ if he could sell the TPP to U.S. workers, Obama responded that there was skepticism about the auto bailouts in 2008 and 2009, but that they were a safe bet and the industry has since prospered. 

Now, he said the industry needs to “seize the future,” as does the American economy in general.

“Detroit needs to be focused on capturing, you know, the lion’s share of the market for fuel-efficient cars,” Obama told the WSJ. “And you know, they worked with us to double fuel-efficiency standards.  And I understand that American consumers sometimes are resistant.  We like big cars and we like driving long ways and we like cheap gas.  And I keep on telling folks, enjoy the fact that gas is cheap right now, but we’ve got to plan for the future.”

As of late, Americans appetite for larger cars has been evident in automaker’s sales, but so too has consumers’ lagging desire for fuel-efficient cars. Last week, Ford Motor Co. announced it was laying off 700 workers at its Michigan Assembly Plant in Wayne because of low sales of smaller and fuel-efficient cars.

While today’s announcement of a shift reduction at our Michigan Assembly Plant is unfortunate, it is not completely unexpected,” UAW Vice President Jimmy Settles said in an emailed statement at the time. “We are reminded from time to time that our industry is cyclical and volatile to market conditions.”

David Muller is the automotive and business reporter for MLive Media Group in Detroit. Email him at dmuller@mlive.com or follow him on Twitter

Obama says Pacific Rim trade pact won"t hurt auto workers