Rahm Emanuel on free trade: It's either tanks or cars

Chicago Mayor Rahm Emanuel pauses as he speaks during the "Energy 2020: States and Business Leading Innovation" summit on February 24, 2014 at the Newseum in Washington, DC.


This post originally appeared in National Journal.


Rahm is crackling good copy.

The mayor of Chicago and former White House chief of staff knows politics from the street corner to the Oval Office. Possibly no one closer to President Obama knows trade politics better than Rahm Emanuel.

“It’s either tanks or cars,” Rahm says about simmering trade disputes dividing Obama and congressional Democrats.

Hizzoner has no formal role in trade talks or the coming trade arm-twisting. But he’s at the political and policy intersection of the reimagined American urban economy and thinking critically about ways that once-dying manufacturing cities can compete in the global economy. I heard him deliver a speech nearly a year ago when he declared that in the next 100 years, much of the world’s history will be written by the world’s biggest cities. Not nation-states, not regions, not continents. Cities. Anyone familiar with Rahm’s sense of self could unwisely ascribe this to his Energizer Bunny egoism. Of course, cities—therefore Chicago, therefore Rahm—would determine the future of the planet.

Subtract egoism, however, and he may still be correct. It is entirely possible that the most important innovations dealing with urban planning, pollution, water use, health care, poverty, taxation, transportation, and crime will come, and may have to come, from cities grappling with enormous and concentrated populations. In the past five years, the world’s urban population has grown by 380 million.

Even if this trajectory flattens, cities will have to meet a vast array of complex needs, chief among them creating jobs.

The mayor was in D.C. to celebrate the awarding of a federal contract to create a new manufacturing hub in Chicago: $70 million in Defense Department seed money added to $240 million in private investment from Fortune 100 companies and venture-capital firms. The goal is to expand digital manufacturing research in Chicago and at the University of Illinois.

“This is an Olympic gold,” said Emanuel, still smarting from the Windy City’s loss of its summer Olympics bid for 2016. “This allows you to create an economic energy and a magnet that will bring in research-and-development facilities from companies that don’t have ’em in Chicago.”

Synergy was a 1990s word that fueled a tech boom and some profitable stock options. Then it became a bumper sticker for morons. The word isn’t necessarily coming back, but the concept is.

“It’s jobs, it’s investment, it’s patents, it’s new businesses,” Rahm told me. “It’s a huge economic opportunity. This brings brains and brawn together like nothing else. Companies today want their manufacturing and their research and development to have things fresh off the shelf that are new.“

These products will need buyers. That means an export market. I asked the Democratic mayor about congressional opposition to Obama’s push for Trade Promotion Authority (fast track) as a prelude to a final deal on the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. Rahm wanted to argue that the opposition is bipartisan. Intellectually, it is. But as he well knows (he advised President Clinton on the North American Free Trade Agreement and Obama on deals with South Korea, Colombia, and Panama), Republicans in the House and Senate will provide a vast majority of votes for TPA. House Speaker John Boehner has asked Obama for 50 House Democratic votes but could probably pass TPA with slightly fewer.

Rahm knows the problem is Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, both of whom have told Obama to back off (which he has). Emanuel’s message: national security.

“You look at Asia today,” he said. “We have allies from Australia, Japan, Taiwan, Vietnam, Indonesia, South Korea. Everybody in the Joint Chiefs supports it. Why do they support it? ‘Cause it’s either tanks or cars. And I’d rather be exporting cars than trying to figure out how we’re gonna move tanks over there or send five [aircraft] carriers there.”

In an era of defense cuts and a smaller Army, Emanuel sees free trade as the way around big defense budgets and dead-end weapons systems.

“Those are our allies around that are part of the Asia Pacific. If they’re economically tied to the United States, it’s in our national security interest. Trade is a good thing if you do everything else right.”

The White House is trying. In a very important but largely overlooked speech on Feb. 18, U.S. Trade Representative Michael Froman told the Center for American Progress (the White House policy and political sounding board) that more progressive voices would be added to trade negotiations. Froman duly noted, because USTR keeps numbers like these, that there have been more than 1,150 separate trade consultations with Congress. He even dryly mentioned that USTR staff conducted 18 briefings with lawmakers—drum roll, please—on a snow day.

But Froman and the White House know that Democrats remain unmoved: They want more voices at or near the negotiations and more transparency about environmental and labor requirements. Yes, Obama says he’s committed to baking these issues into the negotiating cake. Democrats don’t trust Obama. They want inside the trade kitchen.

To that end, Froman announced, the Commerce Department will revive dormant trade advisory committees to gather more progressive input. He also said the administration would create the Public Interest Trade Advisory Committee to join the standing Labor Advisory Committee as a place where progressives can learn more about trade negotiations and offer input. Democrats have long complained of being outnumbered by industry-backed groups working with USTR.

Obama fought for TPA in the State of the Union and was rebuffed. Froman huddled with progressives and lawmakers who could eventually be supportive, but not without more voices at the table and more transparency in the process. Froman knows the Left will never be entirely placated. He also knows it doesn’t need to be. Obama just needs to get enough votes at the margins to win TPA approval after the midterm elections. Meeting the demands of liberals, or at least being seen as trying to, is the new formula for TPA and the Asia and Europe deals.

It also probably won’t be long before White House officials themselves start saying, “It’s either tanks or cars.”