The Tricky Politics of Co-optation

To President Bush and his political strategists, the notion of slapping a 30% tariff on most steel imports seemed doubly clever. Reason one: That tariff would surely add to his party’s electoral strength in key steel-producing states — at the expense of the Democratic Party. Reason two: The same issue could be used to levarage “fast track” trade authority.

Having demonstrated his concern for U.S. workers, could anybody — even Democratic members of Congress — not trust the president with a blank check on trade policy?

From their public statements, Bush Administration officials viewed the steel tariff in just this way. When policymakers such as Trade Representative Robert Zoellick were asked about the tariff, they responded by claiming that it would make it easier to pass “fast track” trade legislation.

In other words, one step back for the world community — but perhaps two steps forward for U.S. domestic trade policy.

The “fast track” measure — which has languished in Congress since it expired in 1994 — gives the president broad authority, especially in negotiating the details of a prospective trade agreement in the World Trade Organization. And, while the U.S. Congress retains its “yea” or “nay” vote on the trade agreement as a whole, it cannot alter the devilish details. Thus, it’s an important policy tool.

But rather than getting Democrats to consent to “fast track” — or trade promotion authority (“TPA”), as it is called now — the steel tariff had the opposite effect. The Democrats, whose supporters — especially among union members — President Bush had hoped to co-opt, were actually galvanized by an even stiffer opposition.

For any political realist, but apparently not the Bush White House, it’s easy to see why: The main domestic impact of the president’s steel tariff was to remove critical cover for those Democrats who favor free trade.

Until the steel tariff, free trade supporters in the Democratic Party could point to the traditional bipartisan consensus (albeit much frayed) in favor of free trade. After all, even Democratic President Bill Clinton — hardly famous for sticking to principle — had been firm in opposing steel tariffs.

But now these Democrats are wide open to political attack. After all, even a decidedly conservative Republican president — with a strong bend towards free trade ideology — has thrown in the towel and supported protection for a key U.S. industry. Frankly, how can any Democrat in his or her right mind do less to support the unions than a Republican president?

Worse, by pouring gasoline on the fire of partisan confrontation, President Bush has given the Democrats ample reason to concentrate their resources around this issue. The obvious Democratic response to the Republicans’ attempt to appeal to big labor is — to make an even bigger Democratic appeal to labor.

In other words, rather than neutralizing the power of the unions, the Bush Administration has managed to enhance it — by opening the floodgates for everybody’s favorite protectionist policy. And the unions have made opposition to “fast track” a priority.

The President’s men have succeeded (barely) in keeping TPA alive in the Senate — but at the price of giving the Democrats a huge concession on “trade adjustment assistance” for workers displaced by free trade. That is not something House Republicans want — meaning that Mr. Bush is now caught between two houses of Congress.

Clearly, the Bush Administration has miscalculated. The steel tariffs — which it saw as a politically astute play to paralyze their opponents — at best is a short-sighted appeasement of U.S. anti-free trade forces. The only problem is that the “appeasement” already appears to be over — with nothing to show for it.

For Mr. Bush, any political advantages are indeed Pyrrhic. Having tasted this “victory” on the trade front, Democrats are unlikely to let TPA — or any other free trade initiative — pass through the U.S. Congress without exacting a high price.

All the Bush Administration achieved is to fundamentally (and perhaps permanently) alter the terms of the U.S. debate over trade — in favor of the protectionist camp. Democrats were almost forced by the Bush Administration to run with the issue to improve their election prospects.

At the same time, the administration’s moves have seriously upset many of its core supporters in conservative circles, who are traditionally in favor of free trade. For the White House, it’s beginning to look more and more like a “lose-lose” situation.