Nike, GE Also Poised to Win After Obama Victory on Trade Powers

WASHINGTON, United States — Companies from Nike Inc. to UPS stand to benefit as the U.S. edges closer to the most sweeping trade accord in two decades.

The Trans-Pacific Partnership, President Barack Obama's push to broaden cooperation on Pacific trade and boost U.S. influence in Asian markets, may move forward now that the Senate voted Wednesday to grant him so-called fast-track authority to pursue trade deals. Businesses as varied as Nike, General Electric Co., United Parcel Service Inc. and pork producers say an agreement may boost overseas sales, reduce import costs and lead to employment growth.

“Any kind of huge multinational company would like something like this,” said Caitlin Webber, a trade policy analyst with Bloomberg Intelligence. “It gives them more flexibility in their supply chain, more certainty about investing.”

Labor groups are fighting the proposed Pacific accord, which would eliminate some tariffs and govern intellectual property and other aspects of Pacific commerce. Breaking down barriers between the U.S. and 11 other countries could lead to an exodus of American jobs to low-cost locales, while also hurting smaller domestic companies, they say.

The accord, which would link the U.S., Canada and countries including Japan, Australia and Vietnam, would be the most significant since the North American Free Trade Agreement was passed 20 years ago. Obama’s administration is also pushing the Trans-Atlantic Trade and Investment Partnership, a proposed free-trade deal between the U.S. and the European Union.

Overcoming Opponents 

Wednesday’s action could set the stage for full approval of the Pacific deal this year or next. The president aligned himself with congressional Republicans to reach the 60-38 Senate vote granting him more power to submit trade pacts to Congress for an expedited, up-or-down vote without amendments. The U.S. House of Representatives had already approved the legislation, which has been sent to Obama for his signature.

Obama overcame opposition to a Pacific-trade deal within his own party, where some members view Nafta as having harmed U.S. manufacturing jobs. The Senate also is scheduled to vote today on a bill to extend a federal assistance program to help workers who lose their jobs as a result of trade agreements. House Democratic leader Nancy Pelosi agreed to back the worker- aid bill that she and other party members voted against two weeks ago in an unsuccessful effort to the fast-track plan.

Reducing cross-border costs could directly benefit the apparel and shoe companies that have been increasing staffing in Vietnam, which has emerged as a low-cost manufacturing alternative as wages have risen in China, Webber said.

Nike, GE

Nike, which makes Air Jordans and other popular shoes in Asia, said fast-track authority and the Pacific accord could generate as many as 10,000 new U.S. manufacturing and engineering jobs at the company and its partners in the next decade as tariff reductions make it easier to invest in the U.S. Obama visited the shoe-maker’s Beaverton, Oregon, headquarters last month to speak about the possible benefits of a trade pact.

GE, one of the largest publicly traded exporters in the U.S., has been vocal in support of free trade efforts and reauthorization of the Export-Import Bank’s charter, which expires at the end of the month. In a speech in Washington last week, Chief Executive Officer Jeffrey Immelt said rejecting the trade accord would hurt U.S. companies and ultimately workers.

“If you’re on the side of small and medium-sized businesses, you should be voting for free trade,” Immelt said.

UPS Chief Executive Officer David Abney said in an interview last month that “there is nothing more important” than a trade agreement for companies like his. “Every time the U.S. signs a free trade agreement, we see package exports grow 20 percent,” Abney said.

Farm Groups 

Agriculture groups including the National Pork Producers Council have supported a possible trade pact because it could give U.S. farmers greater access to growing export markets. The industry sends $2 billion of product each year to Japan even with tariff barriers, and “if those are eliminated, we’ll sell a whole lot more pork to Japan,” said Dave Warner, director of communications for the council.

While big pork producers may benefit, smaller farmers could get squeezed as large-scale production is moved to lower-cost locations, said Karen Hansen-Kuhn, director of international strategy at the Institute for Agriculture and Trade Policy.

“There is huge corporate concentration in pork production,” she said. “Part of that is because they can ship production across the borders. They can fatten the pigs, say, in Mexico and they can bring them back to the U.S. to slaughter, and along the way, farmers and workers lose bargaining power. It makes it harder for their interests to be served.”

Labor Opposition 

Labor groups have battled the legislation, saying it will lead companies to ship jobs overseas. Larry Cohen, former president of Communications Workers of America, which represents 700,000 workers, said it could also harm call-center workers and other non-manufacturing positions.

“There’s nothing good in this unless you’re a multinational corporation concerned about your investment rights,” Cohen said. “For everybody else it’s only a question of how harmed will you be. The apparel industry, auto parts, electronics don’t stand a chance.”

By Richard Clough, John Fahnenstiel, with assistance from Michael Sasso and Danielle Burger. Editors: Kevin Miller, Edward Dufner, Paul Barbagallo.