The Wall Street Journal
President Barack Obama in an interview at the White House in Washington. T.J. Kirkpatrick for The Wall Street Journal. President Barack Obama sat down with The Wall Street Journal‘s Washington bureau chief, Gerald F. Seib, on Monday, to discuss the debate over the Trans-Pacific Partnership free-trade deal, middle-class economics and whether the U.S. is losing the economic competition in Asia to China. Here’s the full transcript, in two parts — first in the White House, and then outside in the Colonnade, as transcribed by Superior Transcriptions.
GERALD F. SEIB: Mr. President, thanks for taking the time to talk. I wanted to ask about the debate that’s growing in Washington over free trade, the trade deal with the Pacific, fast-track authority for you to finish that free-trade deal in the Pacific. And I wanted to start by asking you about your own party, the Democratic Party.There was a time in the 1990s when there was a pretty big free-trade strain in the party. When Nafta [North American Free Trade Agreement] was voted through in 1993, there were 27 Democratic senators who voted yes, 102 Democratic House members who voted yes. You’d be lucky to get a fraction of those votes today for this deal. So what’s happened to the Democratic Party on this subject?
PRESIDENT BARACK OBAMA: Well, first of all, we don’t know how many votes we’ll get yet, so – so we’ll wait and take a look.
A couple of things have happened. First of all, I think it’s important for us to understand that free trade is good for the United States. We have the best workers in the world, the most innovative companies in the world, the best products in the world, the most productive agricultural sector in the world. We want to sell goods made in America elsewhere. And 95 percent of the world’s market is outside our borders. If we are not selling outside the United States, then we are going to have problems. And we want to make sure that we are not being impeded by a bunch of unfair rules outside of the United States.
And I think that back in the 1990s, when Nafta passed, President [Bill] Clinton made the right arguments about why it was important. The problem was that, at that time, we did not get some of the protections around labor rights, environmental issues included in the agreement in an enforceable way. When WTO passed, that allowed China to come into the world economic system. That was the right thing to do geopolitically – it stitched China together with the rest of the world – but China wasn’t subject to some of the enforcement mechanisms needed if they manipulated currency or engaged in non-tariff barriers in terms of entering into their market. And so, over the course of 20, 25 years, what you saw was trade benefit the U.S. economy in the aggregate with cheaper prices, inflation low, the creation of a global supply chain that was good for U.S. companies, but what is true, and the best economic data seems to show is that there was some erosion of our manufacturing bases at the time. There was outsourcing that took place.
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. 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.
The argument that I’ve made consistently is that’s not a reason for us not to enter into trade agreements anymore, it’s a reason for us to strengthen the trade agreements that we do enter into. And that’s exactly what we’ve done with respect to the Trans-Pacific Partnership, or TPP. What we’re negotiating will be by far the most progressive, high-standard trade agreement in history. Labor agreements are enforceable. Environmental agreements are enforceable. If and when this agreement is completed, you’re going to have countries who have very low, if any, environmental standards in the past suddenly having obligations to deal with issues like deforestation or dealing with overfishing their waters or pollution or child labor. Those are all going to be suddenly enforceable provisions.
And what I’ve said to my Democrats is there’s a whole bunch of stuff that we’ve got to do to make sure we’re competitive: job training, rebuilding our infrastructure, making sure that we got the best education system in the world, making sure that we are protecting our workers and – and fighting for strong labor rights here in the United States of America. But what we’re not going to do is to reverse the trends of globalization. We’ve got to be in the game. And we’ve got to make sure we’re writing those trade rules in the fastest-growing region of the world, the Asia-Pacific, as opposed to having China write those rules for us, in which case American businesses will lose and American workers will lose.
MR. SEIB: So do you think the people in the party, your party, who aren’t in favor of this – you know, the Rich Trumkas and Elizabeth Warrens – are they simply mistaken, or are they being dishonest about their criticism?
PRESIDENT OBAMA: I – I think that they are responding to very real anxieties and fears felt by U.S. workers who have not seen their wages or their incomes go up over the last 20 years, and then got hit by the worst financial crisis since the Great Depression. And so it’s understandable that people feel, you know what, I haven’t been protected. I’m seeing these trends where people at the top are doing very well, folks who are involved in the global economy, part of the winner-take-all economy, are excelling, but I’m getting squeezed.
MR. SEIB: Right.
PRESIDENT OBAMA: And they’re right to be concerned about those trends. I am, too, which is why everything I’ve done since I’ve been president has been focused on what I call middle-class economics.
MR. SEIB: So make the case to the average working-class American about why the Trans-Pacific Partnership, the Asian trade deal, is good for them. What’s the argument?
PRESIDENT OBAMA: The argument is, number one, that’s the biggest market in the world and it’s going to continue to be the biggest, even more so the biggest market in the world as, as we go forward, the most populous, fastest-growing. We’ve got to be able to sell our stuff there. That’s number one.
Number two is those countries are already selling to us. I keep on pointing out there are a lot of Japanese cars here in the United States, almost no U.S. cars in Tokyo. And so the more we can get access to markets that are currently closed, but that are selling to us, that’s better off for U.S. workers.
Number three is that if we don’t write the rules, China will write the rules out in that region. We will be shut out, American businesses and American agriculture. That will mean a loss of U.S. jobs.
Number four, export jobs typically pay better. And it’s not just big companies that benefit. You know, when I was in Panama during the Summit of the Americas, Boeing BA -0.40% had just made a multibillion-dollar sale to a Panamanian air carrier. Boeing has suppliers all across this country, small- and medium-sized businesses who are directly benefiting, who are going to be employing people as a consequence of that sale. And we want to continue to make those kinds of sales in the region.
And the last point I would make is that, when you look at some of the provisions that we’re negotiating in TPP, we are raising the standards in many countries, in places like Malaysia or Vietnam, in ways that directly help workers there, directly help the environment, directly go after some of the trends that are causing climate change. And if you’re a progressive, you want higher standards, enforceable standards, in those regions.
And when it comes to some of the things that we do best, like innovation and tech, we’ve got to have strong intellectual property protections that ensure that our stuff doesn’t get pirated or stolen or copied illegally there. And unfortunately, that’s what’s been happening. If we can strengthen those standards there, that’s going to be good for industries where we excel.
MR. SEIB: Are you disappointed that your former secretary of state, Hillary Clinton, hasn’t spoken out in favor of the Pacific trade deal? And what would you like her to say on this subject?
PRESIDENT OBAMA: I think she said what she should be saying, which is that she is going to want to see a trade agreement that is strong on labor, strong on the environment, helps U.S. workers, helps the U.S. economy. That’s my standard as well, and I’m confident that standard can be met.
MR. SEIB: It seemed to me in the last week or so that you take some of the criticism from the left on this subject kind of personally. Why is that?
PRESIDENT OBAMA: Well, I don’t think I – you know, I – I said I take it personally. What I take personally is this notion, somehow, that after six and a half years of working to yank this economy out of a ditch, strengthening middle-class homeownership, making sure that their 401(k)s have recovered, making sure that we’ve got much better education systems and job-training systems, fighting for the minimum wage, fighting for a vibrant auto industry, that after all the work that I have done and we have done together to make sure that middle-class families have greater stability, that to believe some of the rhetoric that has been coming out of opponents that I’m trying to just destroy the middle class – (chuckles) –
MR. SEIB: Right.
PRESIDENT OBAMA: – or destroy our democracy is a little unrealistic. And they know it. This is part of what happens in this town when you end up getting into a policy debate, is you end up getting a lot of exaggeration and a lot of histrionics.
I think it is entirely appropriate for folks to have strong views, and trade deals have always been controversial. It’s part of, you know, American politics. And so I don’t mind people saying, you know what, we’re not getting enough of this or we’re not getting enough of that, I’d like to see more of this, I’d like to see less of that. And I’ve met with all of the opponents and my team has met with all the opponents, and I’m willing to continue to engage and debate, and there will be a broad, open debate about this issue. But when people start suggesting that these are secret deals, that there’s some hidden agenda, I have to remind them of who I am and what I’ve been doing for the last six and a half years and – and ask them maybe to – to keep things a little bit in perspective.
This issue of secrecy, by the way, is – is particularly of concern to me because the way we have set this up, the text of the Trans-Pacific Partnership agreement – where it is right now – it’s not closed, it’s not finished; we’re negotiating with 11 countries – but the text of what we have right now has been on file in Congress for weeks. Members of Congress have been able to go in there and take a look at it.
Now, what you’ll hear critics say is, but it’s not public yet.
MR. SEIB: Right.
PRESIDENT OBAMA: Well, the way that the trade authority that is coming out of the Senate Finance Committee and the House Finance Committee and that will soon be voted on provides is that, if and when we complete an actual agreement, we’ve closed the text with these other countries, then for 60 days before I sign the agreement we have to post this up on the Web, the public will see it, every member of Congress will see it.
It will be debated for two months before I even sign the agreement. Once I sign the agreement, it’s going to take several months before Congress votes on the agreement. So there are going to be many months in which people will be able to look at every comma and period and semicolon in this deal. And I feel very confident that when people evaluate the actual deal that is done, that they will see that in fact it is the most progressive trade deal in history.
What we haven’t been able to do is to disclose how much market access we’re getting on rice in Japan when we haven’t come up with an agreement yet. We haven’t finalized an agreement with respect to what Malaysia’s environmental obligations would be. We’re trying to drive the hardest bargain possible. And it would be foolish for us to disclose what our bottom lines are. That’s just basic negotiation.
MR. SEIB: I want to ask you about Japan in a second, but you’ve referred to China a couple of times here. Let me ask you about that. I looked up the numbers. So, Chinese exports to the rest of Asia have more than doubled since 2009. They’re setting up a new infrastructure development bank. They’re literally paving roads so that they can export their own goods. Is the U.S. losing the economic competition in Asia to China right now?
PRESIDENT OBAMA: Well, I think the way to think about it is China’s a massive country with huge gravitational pull. And they are going to be the dominant economy in Asia for decades to come, just by virtue of sheer size. And there’s nothing wrong with that.
We want China to be successful. We want China to continue to embark on its peaceful rise. I think that’s good for the world. You know, China lifting hundreds of millions of people out of poverty is good for us. We just want to make sure that the rules of the road allow us to complete and everybody else to compete. We don’t want China to use its size to muscle other countries in the region around rules that disadvantage us.
And so what we’ve said consistently to China is, you know, we want you to succeed. Obviously you’re free to sell goods here to the United States. But we want to make sure that there’s reciprocity. We want to make sure that you’re not manipulating your currency. We want to make sure that you are not, you know, having state-sponsored organizations subsidize and effectively dump goods into our markets and undercut our prices.
We want to make sure that our intellectual property is protected, that you are enforcing fair and neutral laws when it comes to U.S. foreign investment and not forcing technology transfer. You know, so there are just a whole range of rules that we want to make sure they’re abiding by. And we want to make sure that the other countries surrounding China are abiding by them as well.
MR. SEIB: Should they be in TPP eventually, the Chinese?
PRESIDENT OBAMA: Well, you know, what’s interesting is that if we are successful in setting up a high-standards trade agreement that sets up rules where everybody can compete fairly, we’ve already heard from the Chinese they’re going to be having to adapt in many ways to these new high standard rules. And that’s a good thing. And then if it’s a level playing field, I have complete confidence in America’s ability to compete. We’ve got the best workers. We’ve got the most innovative products. We got great businesses.
What we can’t do, though, is withdraw. And I think the most important point that I’ve made to critics of trade deals generically is if you’re not satisfied with the status quo, why wouldn’t you want something that deals with the problems of past trade agreements, or the existing trade regime? You know, the truth of the matter is that there are problems with our global trading system. And let’s fix them.
Mexico and China–Mexico and Canada are our parties to the Trans-Pacific Partnership negotiations. If you’re still mad about Nafta from 25 years ago, because the labor and environmental provisions were in a side letter as opposed to in the agreement and couldn’t be enforced, well guess what? Effectively, we’re renegotiating Nafta to solve some of those problems through the Trans-Pacific Partnership.
MR. SEIB: But you talk about – with the risks of withdrawal – when you look at Congress today there’s reluctance to renew the Export-Import Bank. There’s reluctance to vote on new quota for the International Monetary Fund. There’s clearly some resistance – a fair amount of resistance to this trade deal. Is there a withdrawal on the international economic front underway right now?
PRESIDENT OBAMA: There has been a confluence of anti-global engagement from both elements of the right and elements of the left that I think are a big mistake. The Export-Import Bank is a classic example. We sell tons of goods through the Export-Import Bank. Effectively, what happens is we provide some advantageous financing, but we get our money back from the sales that we end up making. And every other country when it comes to major capital purchases like airplanes, they’re helping to finance these exports.
And it is hugely successful. The notion that – (chuckles) – we have problems getting reauthorization of the Export-Import Bank makes absolutely no sense. And the fact that we’re getting resistance within the Republican Party from tea-party elements absolutely makes no sense. You talk to Boeing, GE, but also medium and small businesses and they’ll tell you: We can’t sell overseas. We can’t compete against Germans or Chinese competitors if the Export-Import Bank isn’t there. You know, it defies imagination that we would not want to support a very robust Export-Import Bank.
The IMF – when I came into office we negotiated to makes sure that the United States did not see any of its voting shares diminish in the IMF. We got the Europeans to agree to give up some of their voting shares to accommodate rising powers like China and India. So we brokered something internationally, had to twist some arms to do it, it’s good for us, it maintains our influence without us having to put more in, and we’re the only country that has not –
MR. SEIB: But you can’t do that. In five years you’ve been trying to sell this.
PRESIDENT OBAMA: – we’re the only country that has not actually gotten it done yet. And it makes no sense. And I’ve talked to Mitch McConnell and John Boehner and similar Republican counterparts and said: Why would we not want to maintain influence in one of the most powerful multilateral institutions out there?
And there is this knee-jerk suspicion of multilateral institutions that makes no sense, because we set these institutions up after World War II. And it is a force-multiplier for us. It is a way for us through peaceful means to expand our influence and our power and to make sure that the international rules of the road are working for us and working for everybody who’s following basic international norms.
MR. SEIB: I wanted to ask quickly about Japanese Prime Minister [Shinzo] Abe. He’ll be here tomorrow. You’re going to talk about trade, I assume – a lot, probably. Are you close to having a bilateral agreement with the Japanese that would be part of the overall Asian trade deal – in fact, would open the way for this whole broader deal to get done. Are you going to get that done while he’s here?
PRESIDENT OBAMA: Well, Japan is a huge component of the Trans-Pacific Partnership. Prime Minister Abe, to his credit, has been, I think, bold and aggressive in trying to shake up the Japanese economy that’s been now in a couple-decade-long slump. It hasn’t been as dynamic as I think he and the Japanese people would like to see. The Trans-Pacific Partnership is part of his agenda.
Negotiations are tough on both sides because he’s got his own politics and interests. And, you know, Japanese farmers are tough. Japanese automakers want certain things. And so I don’t expect that we will complete all negotiations here. I’m not going to be sitting across the table from him trying to finalize a deal. I will say that the engagement has brought the parties much closer together. There’s still some gaps that need to be worked on. I’m confident that we’ll get something –
MR. SEIB: Are you going to be able to convince American automakers that this is a good deal for them?
PRESIDENT OBAMA: Well, you know, I think what I’ll be able to show is that it is a good deal for them. Whether I can convince some who are, you know, more comfortable with the status quo, you know, that’s an open question. I will say this: You know, there was a lot of skepticism about us saving the auto industry. I was confident that if the American auto industry retooled, if management and labor got together and changed the way it did business that it could prosper. And that was a good bet. It has prospered.
I’m also confident that over the course of 10 or 15 or 20 years that the American auto industry can continue to thrive. But what we’ve learned is that the American auto industry does not thrive when it tries to avoid the future. It thrives when it seizes the future. And that’s true of our economy generally. We know that even though gas prices are low right now, over the long term fossil fuels are going to be more expensive.
Detroit needs to be focused on capturing, you know, the lion’s share of the market for fuel-efficient cars. 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.
And just as it’s true with the auto industry generally, it’s true for American manufacturing. It’s true for American services. It’s true for American energy production and innovation. When we are bold and we, you know, take a look at where we’re going to be 10, 15, 20 years from now, we plan for it, we invest for it, we go after it, we succeed – nobody can beat us. And when we hunker down and we’re defensive and scared of the future, that’s when we get our clock cleaned.
MR. SEIB: Thanks for taking some time to talk.
PRESIDENT OBAMA: Really enjoyed it. Thank you so much.
MR. SEIB: Appreciate it.
* * *
GERALD F. SEIB: So let me – let me ask you about the broader economy. So for six years it’s kind of been getting better, getting better, we’re in a recovery, and then things have stalled out. And we’re at one of those points again where there’s some economic data that suggest maybe things are going down. Larry Summers talks about secular stagnation. Are we in secular stagnation or are things slowing down? And what can we do about it?
PRESIDENT OBAMA: Well, it’s important to remember that, over the course of five years now, we’ve had job growth every month. The unemployment rate’s come down from 10 (percent) to 5.5 (percent), and it continues to improve. It has not been improving as quickly over the last several months as it was, let’s say, last year. And my attitude is we can always do better.
Now, there are some specific things we could do that would make a difference. If we move forward on a strong infrastructure bill, which traditionally has received bipartisan support – if you talk to Republicans and Democrats, they’ll both say we know we got to fix our roads, our bridges, our ports, our broadband lines, our smart grid. If we did that, we’d put people back to work right now, it would be a huge boost to the economy, and it would pay off for decades to come. That’s what we need to compete. And so there are certain things that we know can make a difference. We should be doing it right now.
But weakness in the economy that we see primarily as coming out of Europe, which has been soft for a long time now, and China, which is trying to transition away from solely relying on exports to a more domestic consumption model – that’s actually a good thing over the long term, but short term it means that demand globally is a little bit soft. But overall, we are doing better and have been doing better than any other of the advanced economies, and we can continue to do that as long as we make some smart decisions starting now.
MR. SEIB: We talked about a visitor, Prime Minister Abe. You have another visitor coming later, the pope.
PRESIDENT OBAMA: Yeah.
MR. SEIB: What are you going to tell him? What do you expect he’s going to want to tell you?
PRESIDENT OBAMA: Well, I’ve had the honor of meeting him already once, and extraordinary individual, I think a transformative leader, not just within the Catholic Church but globally.
You know, in our last conversation, we spent a lot of time talking about issues of poverty and how we help the least of these across the globe, and I suspect that that’s a theme that he’s going to continue to be interested in. We’re going to talk about climate change, I’m sure, because he is very clear that part of the Church’s teachings and part of my faith is we have to be good stewards of this incredible planet that we have been given, and there are steps that can be taken there, and the vulnerabilities of the poorest of the poor when it comes to climate change if we don’t help deal with the issue. And I think issues of war and peace. You know, he is somebody who rightly, I think, expresses concerns about reducing conflict and reducing war, including in the Middle East, where Christians have been viciously attacked. And we consult with the Church very closely about how we can protect religious minorities in some of these war zones.
MR. SEIB: So he’s going to stop in Cuba on the way.
PRESIDENT OBAMA: Yeah.
MR. SEIB: Are you going to get to Cuba before you leave office?
PRESIDENT OBAMA: You know, I don’t know if I’ll – I’ll get to Cuba, but what I know is is that a lot of Americans are going to get to Cuba over the next couple years.
MR. SEIB: (Chuckles.) Already are.
PRESIDENT OBAMA: I mean, we’re already seeing an incredible interest in trading with Cuba, investment in Cuba. Ninety-seven percent of Cubans approve of this new approach that we’re taking – including, by the way, in conversations I had with a couple of Cuban dissidents while I was in Panama, who were fierce critics of the Castro regime but also confirmed their belief that engagement stands the best chance of actually creating new openings and new possibilities for freedom for the Cuban people.
MR. SEIB: All right, so last question. NBA Playoffs underway. Wizards have advanced. Your Bulls, near advancing.
PRESIDENT OBAMA: Yeah, yeah.
MR. SEIB: Chicago versus Washington. Prediction? Preference?
PRESIDENT OBAMA: Well – well, first of all, Chicago-Washington would require them getting though Atlanta, and Cleveland.
MR. SEIB: I’m just assuming that. (Laughs.)
PRESIDENT OBAMA: (Laughs.) I think it’s fair to say that anytime the Bulls are playing, I’m rooting for the Bulls. But the – you know, Washington’s been able to turn the season around. I think they kind of limped into the playoffs but they’ve – they’ve gotten their mojo back. So who knows, they may end up having a nice little run.
MR. SEIB: So you’re picking the Bulls for the Finals, that’s the bottom line?
PRESIDENT OBAMA: Yeah, the Bulls all the way. That’s – that’s how we roll.
MR. SEIB: All right.
PRESIDENT OBAMA: Golden State looks tough once you get to the Finals.
MR. SEIB: Yeah, exactly. Thank you very much. Appreciate your time.
PRESIDENT OBAMA: Thank you.
MR. SEIB: Thank you.
Fonte
GERALD F. SEIB: Mr. President, thanks for taking the time to talk. I wanted to ask about the debate that’s growing in Washington over free trade, the trade deal with the Pacific, fast-track authority for you to finish that free-trade deal in the Pacific. And I wanted to start by asking you about your own party, the Democratic Party.There was a time in the 1990s when there was a pretty big free-trade strain in the party. When Nafta [North American Free Trade Agreement] was voted through in 1993, there were 27 Democratic senators who voted yes, 102 Democratic House members who voted yes. You’d be lucky to get a fraction of those votes today for this deal. So what’s happened to the Democratic Party on this subject?
PRESIDENT BARACK OBAMA: Well, first of all, we don’t know how many votes we’ll get yet, so – so we’ll wait and take a look.
A couple of things have happened. First of all, I think it’s important for us to understand that free trade is good for the United States. We have the best workers in the world, the most innovative companies in the world, the best products in the world, the most productive agricultural sector in the world. We want to sell goods made in America elsewhere. And 95 percent of the world’s market is outside our borders. If we are not selling outside the United States, then we are going to have problems. And we want to make sure that we are not being impeded by a bunch of unfair rules outside of the United States.
And I think that back in the 1990s, when Nafta passed, President [Bill] Clinton made the right arguments about why it was important. The problem was that, at that time, we did not get some of the protections around labor rights, environmental issues included in the agreement in an enforceable way. When WTO passed, that allowed China to come into the world economic system. That was the right thing to do geopolitically – it stitched China together with the rest of the world – but China wasn’t subject to some of the enforcement mechanisms needed if they manipulated currency or engaged in non-tariff barriers in terms of entering into their market. And so, over the course of 20, 25 years, what you saw was trade benefit the U.S. economy in the aggregate with cheaper prices, inflation low, the creation of a global supply chain that was good for U.S. companies, but what is true, and the best economic data seems to show is that there was some erosion of our manufacturing bases at the time. There was outsourcing that took place.
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. 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.
The argument that I’ve made consistently is that’s not a reason for us not to enter into trade agreements anymore, it’s a reason for us to strengthen the trade agreements that we do enter into. And that’s exactly what we’ve done with respect to the Trans-Pacific Partnership, or TPP. What we’re negotiating will be by far the most progressive, high-standard trade agreement in history. Labor agreements are enforceable. Environmental agreements are enforceable. If and when this agreement is completed, you’re going to have countries who have very low, if any, environmental standards in the past suddenly having obligations to deal with issues like deforestation or dealing with overfishing their waters or pollution or child labor. Those are all going to be suddenly enforceable provisions.
And what I’ve said to my Democrats is there’s a whole bunch of stuff that we’ve got to do to make sure we’re competitive: job training, rebuilding our infrastructure, making sure that we got the best education system in the world, making sure that we are protecting our workers and – and fighting for strong labor rights here in the United States of America. But what we’re not going to do is to reverse the trends of globalization. We’ve got to be in the game. And we’ve got to make sure we’re writing those trade rules in the fastest-growing region of the world, the Asia-Pacific, as opposed to having China write those rules for us, in which case American businesses will lose and American workers will lose.
MR. SEIB: So do you think the people in the party, your party, who aren’t in favor of this – you know, the Rich Trumkas and Elizabeth Warrens – are they simply mistaken, or are they being dishonest about their criticism?
PRESIDENT OBAMA: I – I think that they are responding to very real anxieties and fears felt by U.S. workers who have not seen their wages or their incomes go up over the last 20 years, and then got hit by the worst financial crisis since the Great Depression. And so it’s understandable that people feel, you know what, I haven’t been protected. I’m seeing these trends where people at the top are doing very well, folks who are involved in the global economy, part of the winner-take-all economy, are excelling, but I’m getting squeezed.
MR. SEIB: Right.
PRESIDENT OBAMA: And they’re right to be concerned about those trends. I am, too, which is why everything I’ve done since I’ve been president has been focused on what I call middle-class economics.
MR. SEIB: So make the case to the average working-class American about why the Trans-Pacific Partnership, the Asian trade deal, is good for them. What’s the argument?
PRESIDENT OBAMA: The argument is, number one, that’s the biggest market in the world and it’s going to continue to be the biggest, even more so the biggest market in the world as, as we go forward, the most populous, fastest-growing. We’ve got to be able to sell our stuff there. That’s number one.
Number two is those countries are already selling to us. I keep on pointing out there are a lot of Japanese cars here in the United States, almost no U.S. cars in Tokyo. And so the more we can get access to markets that are currently closed, but that are selling to us, that’s better off for U.S. workers.
Number three is that if we don’t write the rules, China will write the rules out in that region. We will be shut out, American businesses and American agriculture. That will mean a loss of U.S. jobs.
Number four, export jobs typically pay better. And it’s not just big companies that benefit. You know, when I was in Panama during the Summit of the Americas, Boeing BA -0.40% had just made a multibillion-dollar sale to a Panamanian air carrier. Boeing has suppliers all across this country, small- and medium-sized businesses who are directly benefiting, who are going to be employing people as a consequence of that sale. And we want to continue to make those kinds of sales in the region.
And the last point I would make is that, when you look at some of the provisions that we’re negotiating in TPP, we are raising the standards in many countries, in places like Malaysia or Vietnam, in ways that directly help workers there, directly help the environment, directly go after some of the trends that are causing climate change. And if you’re a progressive, you want higher standards, enforceable standards, in those regions.
And when it comes to some of the things that we do best, like innovation and tech, we’ve got to have strong intellectual property protections that ensure that our stuff doesn’t get pirated or stolen or copied illegally there. And unfortunately, that’s what’s been happening. If we can strengthen those standards there, that’s going to be good for industries where we excel.
MR. SEIB: Are you disappointed that your former secretary of state, Hillary Clinton, hasn’t spoken out in favor of the Pacific trade deal? And what would you like her to say on this subject?
PRESIDENT OBAMA: I think she said what she should be saying, which is that she is going to want to see a trade agreement that is strong on labor, strong on the environment, helps U.S. workers, helps the U.S. economy. That’s my standard as well, and I’m confident that standard can be met.
MR. SEIB: It seemed to me in the last week or so that you take some of the criticism from the left on this subject kind of personally. Why is that?
PRESIDENT OBAMA: Well, I don’t think I – you know, I – I said I take it personally. What I take personally is this notion, somehow, that after six and a half years of working to yank this economy out of a ditch, strengthening middle-class homeownership, making sure that their 401(k)s have recovered, making sure that we’ve got much better education systems and job-training systems, fighting for the minimum wage, fighting for a vibrant auto industry, that after all the work that I have done and we have done together to make sure that middle-class families have greater stability, that to believe some of the rhetoric that has been coming out of opponents that I’m trying to just destroy the middle class – (chuckles) –
MR. SEIB: Right.
PRESIDENT OBAMA: – or destroy our democracy is a little unrealistic. And they know it. This is part of what happens in this town when you end up getting into a policy debate, is you end up getting a lot of exaggeration and a lot of histrionics.
I think it is entirely appropriate for folks to have strong views, and trade deals have always been controversial. It’s part of, you know, American politics. And so I don’t mind people saying, you know what, we’re not getting enough of this or we’re not getting enough of that, I’d like to see more of this, I’d like to see less of that. And I’ve met with all of the opponents and my team has met with all the opponents, and I’m willing to continue to engage and debate, and there will be a broad, open debate about this issue. But when people start suggesting that these are secret deals, that there’s some hidden agenda, I have to remind them of who I am and what I’ve been doing for the last six and a half years and – and ask them maybe to – to keep things a little bit in perspective.
This issue of secrecy, by the way, is – is particularly of concern to me because the way we have set this up, the text of the Trans-Pacific Partnership agreement – where it is right now – it’s not closed, it’s not finished; we’re negotiating with 11 countries – but the text of what we have right now has been on file in Congress for weeks. Members of Congress have been able to go in there and take a look at it.
Now, what you’ll hear critics say is, but it’s not public yet.
MR. SEIB: Right.
PRESIDENT OBAMA: Well, the way that the trade authority that is coming out of the Senate Finance Committee and the House Finance Committee and that will soon be voted on provides is that, if and when we complete an actual agreement, we’ve closed the text with these other countries, then for 60 days before I sign the agreement we have to post this up on the Web, the public will see it, every member of Congress will see it.
It will be debated for two months before I even sign the agreement. Once I sign the agreement, it’s going to take several months before Congress votes on the agreement. So there are going to be many months in which people will be able to look at every comma and period and semicolon in this deal. And I feel very confident that when people evaluate the actual deal that is done, that they will see that in fact it is the most progressive trade deal in history.
What we haven’t been able to do is to disclose how much market access we’re getting on rice in Japan when we haven’t come up with an agreement yet. We haven’t finalized an agreement with respect to what Malaysia’s environmental obligations would be. We’re trying to drive the hardest bargain possible. And it would be foolish for us to disclose what our bottom lines are. That’s just basic negotiation.
MR. SEIB: I want to ask you about Japan in a second, but you’ve referred to China a couple of times here. Let me ask you about that. I looked up the numbers. So, Chinese exports to the rest of Asia have more than doubled since 2009. They’re setting up a new infrastructure development bank. They’re literally paving roads so that they can export their own goods. Is the U.S. losing the economic competition in Asia to China right now?
PRESIDENT OBAMA: Well, I think the way to think about it is China’s a massive country with huge gravitational pull. And they are going to be the dominant economy in Asia for decades to come, just by virtue of sheer size. And there’s nothing wrong with that.
We want China to be successful. We want China to continue to embark on its peaceful rise. I think that’s good for the world. You know, China lifting hundreds of millions of people out of poverty is good for us. We just want to make sure that the rules of the road allow us to complete and everybody else to compete. We don’t want China to use its size to muscle other countries in the region around rules that disadvantage us.
And so what we’ve said consistently to China is, you know, we want you to succeed. Obviously you’re free to sell goods here to the United States. But we want to make sure that there’s reciprocity. We want to make sure that you’re not manipulating your currency. We want to make sure that you are not, you know, having state-sponsored organizations subsidize and effectively dump goods into our markets and undercut our prices.
We want to make sure that our intellectual property is protected, that you are enforcing fair and neutral laws when it comes to U.S. foreign investment and not forcing technology transfer. You know, so there are just a whole range of rules that we want to make sure they’re abiding by. And we want to make sure that the other countries surrounding China are abiding by them as well.
MR. SEIB: Should they be in TPP eventually, the Chinese?
PRESIDENT OBAMA: Well, you know, what’s interesting is that if we are successful in setting up a high-standards trade agreement that sets up rules where everybody can compete fairly, we’ve already heard from the Chinese they’re going to be having to adapt in many ways to these new high standard rules. And that’s a good thing. And then if it’s a level playing field, I have complete confidence in America’s ability to compete. We’ve got the best workers. We’ve got the most innovative products. We got great businesses.
What we can’t do, though, is withdraw. And I think the most important point that I’ve made to critics of trade deals generically is if you’re not satisfied with the status quo, why wouldn’t you want something that deals with the problems of past trade agreements, or the existing trade regime? You know, the truth of the matter is that there are problems with our global trading system. And let’s fix them.
Mexico and China–Mexico and Canada are our parties to the Trans-Pacific Partnership negotiations. If you’re still mad about Nafta from 25 years ago, because the labor and environmental provisions were in a side letter as opposed to in the agreement and couldn’t be enforced, well guess what? Effectively, we’re renegotiating Nafta to solve some of those problems through the Trans-Pacific Partnership.
MR. SEIB: But you talk about – with the risks of withdrawal – when you look at Congress today there’s reluctance to renew the Export-Import Bank. There’s reluctance to vote on new quota for the International Monetary Fund. There’s clearly some resistance – a fair amount of resistance to this trade deal. Is there a withdrawal on the international economic front underway right now?
PRESIDENT OBAMA: There has been a confluence of anti-global engagement from both elements of the right and elements of the left that I think are a big mistake. The Export-Import Bank is a classic example. We sell tons of goods through the Export-Import Bank. Effectively, what happens is we provide some advantageous financing, but we get our money back from the sales that we end up making. And every other country when it comes to major capital purchases like airplanes, they’re helping to finance these exports.
And it is hugely successful. The notion that – (chuckles) – we have problems getting reauthorization of the Export-Import Bank makes absolutely no sense. And the fact that we’re getting resistance within the Republican Party from tea-party elements absolutely makes no sense. You talk to Boeing, GE, but also medium and small businesses and they’ll tell you: We can’t sell overseas. We can’t compete against Germans or Chinese competitors if the Export-Import Bank isn’t there. You know, it defies imagination that we would not want to support a very robust Export-Import Bank.
The IMF – when I came into office we negotiated to makes sure that the United States did not see any of its voting shares diminish in the IMF. We got the Europeans to agree to give up some of their voting shares to accommodate rising powers like China and India. So we brokered something internationally, had to twist some arms to do it, it’s good for us, it maintains our influence without us having to put more in, and we’re the only country that has not –
MR. SEIB: But you can’t do that. In five years you’ve been trying to sell this.
PRESIDENT OBAMA: – we’re the only country that has not actually gotten it done yet. And it makes no sense. And I’ve talked to Mitch McConnell and John Boehner and similar Republican counterparts and said: Why would we not want to maintain influence in one of the most powerful multilateral institutions out there?
And there is this knee-jerk suspicion of multilateral institutions that makes no sense, because we set these institutions up after World War II. And it is a force-multiplier for us. It is a way for us through peaceful means to expand our influence and our power and to make sure that the international rules of the road are working for us and working for everybody who’s following basic international norms.
MR. SEIB: I wanted to ask quickly about Japanese Prime Minister [Shinzo] Abe. He’ll be here tomorrow. You’re going to talk about trade, I assume – a lot, probably. Are you close to having a bilateral agreement with the Japanese that would be part of the overall Asian trade deal – in fact, would open the way for this whole broader deal to get done. Are you going to get that done while he’s here?
PRESIDENT OBAMA: Well, Japan is a huge component of the Trans-Pacific Partnership. Prime Minister Abe, to his credit, has been, I think, bold and aggressive in trying to shake up the Japanese economy that’s been now in a couple-decade-long slump. It hasn’t been as dynamic as I think he and the Japanese people would like to see. The Trans-Pacific Partnership is part of his agenda.
Negotiations are tough on both sides because he’s got his own politics and interests. And, you know, Japanese farmers are tough. Japanese automakers want certain things. And so I don’t expect that we will complete all negotiations here. I’m not going to be sitting across the table from him trying to finalize a deal. I will say that the engagement has brought the parties much closer together. There’s still some gaps that need to be worked on. I’m confident that we’ll get something –
MR. SEIB: Are you going to be able to convince American automakers that this is a good deal for them?
PRESIDENT OBAMA: Well, you know, I think what I’ll be able to show is that it is a good deal for them. Whether I can convince some who are, you know, more comfortable with the status quo, you know, that’s an open question. I will say this: You know, there was a lot of skepticism about us saving the auto industry. I was confident that if the American auto industry retooled, if management and labor got together and changed the way it did business that it could prosper. And that was a good bet. It has prospered.
I’m also confident that over the course of 10 or 15 or 20 years that the American auto industry can continue to thrive. But what we’ve learned is that the American auto industry does not thrive when it tries to avoid the future. It thrives when it seizes the future. And that’s true of our economy generally. We know that even though gas prices are low right now, over the long term fossil fuels are going to be more expensive.
Detroit needs to be focused on capturing, you know, the lion’s share of the market for fuel-efficient cars. 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.
And just as it’s true with the auto industry generally, it’s true for American manufacturing. It’s true for American services. It’s true for American energy production and innovation. When we are bold and we, you know, take a look at where we’re going to be 10, 15, 20 years from now, we plan for it, we invest for it, we go after it, we succeed – nobody can beat us. And when we hunker down and we’re defensive and scared of the future, that’s when we get our clock cleaned.
MR. SEIB: Thanks for taking some time to talk.
PRESIDENT OBAMA: Really enjoyed it. Thank you so much.
MR. SEIB: Appreciate it.
* * *
GERALD F. SEIB: So let me – let me ask you about the broader economy. So for six years it’s kind of been getting better, getting better, we’re in a recovery, and then things have stalled out. And we’re at one of those points again where there’s some economic data that suggest maybe things are going down. Larry Summers talks about secular stagnation. Are we in secular stagnation or are things slowing down? And what can we do about it?
PRESIDENT OBAMA: Well, it’s important to remember that, over the course of five years now, we’ve had job growth every month. The unemployment rate’s come down from 10 (percent) to 5.5 (percent), and it continues to improve. It has not been improving as quickly over the last several months as it was, let’s say, last year. And my attitude is we can always do better.
Now, there are some specific things we could do that would make a difference. If we move forward on a strong infrastructure bill, which traditionally has received bipartisan support – if you talk to Republicans and Democrats, they’ll both say we know we got to fix our roads, our bridges, our ports, our broadband lines, our smart grid. If we did that, we’d put people back to work right now, it would be a huge boost to the economy, and it would pay off for decades to come. That’s what we need to compete. And so there are certain things that we know can make a difference. We should be doing it right now.
But weakness in the economy that we see primarily as coming out of Europe, which has been soft for a long time now, and China, which is trying to transition away from solely relying on exports to a more domestic consumption model – that’s actually a good thing over the long term, but short term it means that demand globally is a little bit soft. But overall, we are doing better and have been doing better than any other of the advanced economies, and we can continue to do that as long as we make some smart decisions starting now.
MR. SEIB: We talked about a visitor, Prime Minister Abe. You have another visitor coming later, the pope.
PRESIDENT OBAMA: Yeah.
MR. SEIB: What are you going to tell him? What do you expect he’s going to want to tell you?
PRESIDENT OBAMA: Well, I’ve had the honor of meeting him already once, and extraordinary individual, I think a transformative leader, not just within the Catholic Church but globally.
You know, in our last conversation, we spent a lot of time talking about issues of poverty and how we help the least of these across the globe, and I suspect that that’s a theme that he’s going to continue to be interested in. We’re going to talk about climate change, I’m sure, because he is very clear that part of the Church’s teachings and part of my faith is we have to be good stewards of this incredible planet that we have been given, and there are steps that can be taken there, and the vulnerabilities of the poorest of the poor when it comes to climate change if we don’t help deal with the issue. And I think issues of war and peace. You know, he is somebody who rightly, I think, expresses concerns about reducing conflict and reducing war, including in the Middle East, where Christians have been viciously attacked. And we consult with the Church very closely about how we can protect religious minorities in some of these war zones.
MR. SEIB: So he’s going to stop in Cuba on the way.
PRESIDENT OBAMA: Yeah.
MR. SEIB: Are you going to get to Cuba before you leave office?
PRESIDENT OBAMA: You know, I don’t know if I’ll – I’ll get to Cuba, but what I know is is that a lot of Americans are going to get to Cuba over the next couple years.
MR. SEIB: (Chuckles.) Already are.
PRESIDENT OBAMA: I mean, we’re already seeing an incredible interest in trading with Cuba, investment in Cuba. Ninety-seven percent of Cubans approve of this new approach that we’re taking – including, by the way, in conversations I had with a couple of Cuban dissidents while I was in Panama, who were fierce critics of the Castro regime but also confirmed their belief that engagement stands the best chance of actually creating new openings and new possibilities for freedom for the Cuban people.
MR. SEIB: All right, so last question. NBA Playoffs underway. Wizards have advanced. Your Bulls, near advancing.
PRESIDENT OBAMA: Yeah, yeah.
MR. SEIB: Chicago versus Washington. Prediction? Preference?
PRESIDENT OBAMA: Well – well, first of all, Chicago-Washington would require them getting though Atlanta, and Cleveland.
MR. SEIB: I’m just assuming that. (Laughs.)
PRESIDENT OBAMA: (Laughs.) I think it’s fair to say that anytime the Bulls are playing, I’m rooting for the Bulls. But the – you know, Washington’s been able to turn the season around. I think they kind of limped into the playoffs but they’ve – they’ve gotten their mojo back. So who knows, they may end up having a nice little run.
MR. SEIB: So you’re picking the Bulls for the Finals, that’s the bottom line?
PRESIDENT OBAMA: Yeah, the Bulls all the way. That’s – that’s how we roll.
MR. SEIB: All right.
PRESIDENT OBAMA: Golden State looks tough once you get to the Finals.
MR. SEIB: Yeah, exactly. Thank you very much. Appreciate your time.
PRESIDENT OBAMA: Thank you.
MR. SEIB: Thank you.
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