How Obama's Free-Trade Push Could Put Hillary Clinton in a Tight Spot

Hillary Clinton owes Harry Reid a solid. Why? Non-college-educated whites. They’re both the promise of the widely expected Clinton presidential bid and its potential pitfall. And if Reid continues to stand in the way of the Obama Administration’s trade agenda, it would help Clinton hold on to them.

Clinton’s image among non-college-educated whites hangs on the economic legacy of her husband’s presidency, and sooner or later her opponents will try to spoil that image by making NAFTA a dominant symbol of that legacy—assuming, of course, that she runs. To fend it off, Clinton will to need to offer a symbol of her own: NASDAQ. Personal attacks may be worn out, and Benghazi may not have two more years of juice in it, but the shifting economic ground could leave her vulnerable to a populist message from both the left and the right. And the Obama Administration could be inadvertently setting the trap for her.

In his State of the Union, Obama called for fast-tracking the Trans-Pacific Partnership, a massive free-trade agreement that represents an extension of the policies embodied in the 20-year-old North American Free Trade Agreement, championed and signed by Bill Clinton.

The further TPP negotiations progress, and the closer it comes to a vote in Congress, the more it will become the object of widespread public attention. The latest round of TPP talks commenced in Singapore on February 17. Meanwhile, there’s another treaty on the horizon: Next month, negotiators will hold the fourth round of talks on the Transatlantic Trade and Investment Partnership, which would create a US-EU trade bloc and could be finalized by the end of the year.  All this could open up a wide-ranging cross-partisan debate on free trade, much like the one we’ve seen on surveillance. Such a debate would threaten to put working-class whites’ perceptions of the Clinton economic legacy up for grabs. Right now, that legacy is of shared prosperity during economic boom times, symbolized by the tech-heavy NASDAQ, which grew by a factor of seven between Bill Clinton’s inauguration in 1993 and its Clinton-era peak in 2000.

But some liberal economists argue that the bursting of the dotcom bubble and later the great recession laid bare the legacy of NAFTA. According to a 2006 report from the left-leaning Economic Policy Institute, the treaty led to the loss of an estimated one million American jobs in its first decade. A 2012 poll found that 53 percent of Americans wanted the government to “do whatever is necessary” to amend or leave NAFTA, while only 15 percent wanted to remain in NAFTA as-is. In 2008, Rassmussen found that 56 percent of Americans wanted NAFTA renegotiated, and Gallup found that 53 percent believed its effects on the U.S. economy were “mainly negative,” compared to 37 percent who considered them “mainly positive.” A January report by Public Citizen, a group that often criticizes free-trade agreements, found that NAFTA had contributed to downward pressure on wages and increased income inequality in the U.S as that issue shapes up to be a defining one in 2016.

The messaging challenge for Clinton’s opponents is to hang NAFTA—and by extension inequality—around her neck. Her challenge is to make sure the only association that voters draw between the Clinton Administration and the economy is a rosy-tinted view of the booming the ’90s, and to avoid litigating how the era’s economic policies played out after he left office.

Because if the focus turns to NAFTA’s legacy, NASDAQ sours too. In that case, working-class whites looking back at the champagne-drenched IPOs (was there actually champagne? Too late, it’s already in voters’ minds) of the dotcom boom could start to see the stock offerings as the first steps in a long dance between Silicon Valley and Wall Street on top of their economic graves.

This would be a major shift. In 2008, after all, blue-collar white voters were Clinton’s final bulwark against Barack Obama. Obama tried to peel them away by promising to consider revising NAFTA, but when a leaked memo revealed it was just a political ploy, the issue was neutralized. But 2016 is shaping up to be a different race. John Edwards’ “Two Americas” motif aside, the themes of inequality and economic fairness weren’t the most resonant ones in that primary, which was over before the worst of the economic collapse struck. In January 2008, the unemployment rate was just 5 percent nationwide.

Rates across the country would double by the end of 2009 and haven’t come all the way back down since. Edwards is disgraced, but his theme has become the Democratic Party’s rallying cry. Reopening the free-trade debate in this context, when working-class whites have become more anxious about their place in the global economy—and the gap between their fortunes and those of educated urbanites who’ve thrived in the global marketplace has become more clear—could create the space to turn Clinton’s image with them.

The basic template for an outsider Democratic primary challenger would be clear. The liberal wing of the party and blue-collar Democrats could both buy into an anti-NAFTA message. Clinton’s consummate-insider status and massive donor network already make her vulnerable to a populist insurgency. Earlier this month, the New York Times reported that a Clinton ally and Ukrainian steel magnate was “at the center of a trade dispute that places him at odds with steelworkers in Pennsylvania and Ohio, precisely the kind of union workers Mrs. Clinton would need to appeal to in a presidential campaign.”

Even if Clinton’s aura of inevitability keeps other big names out of the primary, it’s hard to imagine she won’t draw any challenger—perhaps a populist dark horse. Senator Elizabeth Warren (who has said she isn’t running but continues to be the subject of progressive hopes and rumors) has criticized TPP negotiations as overly opaque, and she was one of four senators to vote against confirming Obama’s trade representative last year. An anti-NAFTA line would dovetail well with her critique of Clinton-era financial deregulation, too. Meanwhile, Senator Bernie Sanders of Vermont is threatening to launch an independent candidacy, telling Salon in November that “it remains to be seen whether [Clinton] will be a forceful advocate for working families."

Clinton would still be the strong favorite in this circumstance, but she could take on water in a Democratic primary. In a general election, free trade is a less natural line of attack for Republicans, but they could still benefit from an image of Clinton as more attuned to global elites than to average Americans, which a sustained focus on NAFTA and trade could help create. It’s a situation that could cater directly to Rand Paul’s strengths. The Kentucky senator is opposed to fast-tracking the TPP. His father voted against NAFTA. While the Pauls support free trade in principle, they’ve criticized free-trade agreements for ceding U.S. sovereignty and for favoring special interests. A nominee Paul could combine a NAFTA attack with his surveillance positions to gain cross-spectrum traction. 

The origins of the Tea Party phenomenon trace back the very first days of Obama’s presidency, and his low support among working-class whites has been a political handicap. Whites without a college education make up a third of the electorate. Obama’s share among them fell three points to just 36 points in 2012. It likely would have fallen farther if not for the suspicion with which the group viewed Mitt Romney—partly the result of Obama’s effort to paint Romney as a plutocrat who put blue-collar workers out of jobs at Bain Capital.

According to recent polling results provided by CNN/ORC International, 34 percent of whites with no college degree approve of Obama’s job handling, while 54 percent of that demographic approves of the job Clinton did as secretary of state. ThinkProgress had this gap in mind in an October post with the salivating title, “How 2016 Could Be An Even Bigger Democratic Blowout Than 2008.” But such a coalition depends on the support of the bloc hardest-hit by NAFTA.

So Reid’s opposition to fast-tracking TPP is good news for a Clinton campaign. Given its support among business and the administration, it’s not clear if Reid can or will kill the treaty, or if he’s just hoping to push the issue back past November. At least, though, Reid has bought Clinton some time to figure out just how she plans to bask in the glow of NASDAQ while dancing around the long shadow cast by NAFTA.