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Bush pushes free trade at tractor plant

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Times Staff Writers

Using two huge yellow earthmovers as his backdrop, and giddy over driving a third, President Bush sought Tuesday to calm fears about globalization, the nation’s economic future and the risks of easing trade barriers, arguing that free trade benefits U.S. workers.

“The temptation is to say, ‘Well, trade may not be worth it, let’s isolate ourselves, let’s protect ourselves,’ ” Bush said, adding: “It’s a bad mistake for the country to lose our confidence and not compete.”

Opening a campaign for renewed trade-negotiating authority before a low-key audience of workers and managers from Caterpillar Inc., which manufactures heavy equipment and sells a large portion of it overseas, Bush is facing a tough battle with an uncertain outcome.

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He has not yet specifically asked Congress to renew his “fast-track” negotiating authority, which expires July 1, but he is expected to do so soon. Also known as “trade promotion authority,” it allows him to negotiate trade agreements that Congress cannot amend -- just vote to approve or disapprove.

Rep. Charles B. Rangel (D-N.Y.), chairman of the House Ways and Means Committee, signaled a readiness Tuesday to work with Bush on the issue, saying he was trying to get the two political parties out of “divorce court.”

“If we don’t give trade promotion authority [to the White House], we’ve got to have a good reason for not giving it,” he said during a committee meeting.

This month, 37 Democrats who had campaigned against free trade urged Rangel to “reverse the troubling results of the administration’s trade agreements and trade policies.” The issue has taken on added importance in recent weeks because efforts are underway to energize negotiations of a global trade treaty that have been stalled for half a year.

Bush’s speech was the first of two this week promoting the nation’s economic strength. He is to travel today to Wall Street, where he will speak at historic Federal Hall.

The president told the audience at Caterpillar that the nation’s exports of goods and services last year were worth $1.4 trillion, and that exports amounted to 11% of the nation’s economic value, with one in six manufacturing jobs dependent on foreign sales.

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He noted that half of Caterpillar’s products were sold overseas, and that since the United States and Australia initiated a free-trade pact in 2005, Caterpillar’s exports to that country had grown 26%.

However, there is a counterpoint to the president’s numbers and his optimistic tenor.

Although wages and employment are growing, Bush faces an undercurrent of concern -- over the effects of technology, the struggles facing the Big Three automakers and other traditional blue-collar manufacturing employers, and, most notably, globalization.

And though Bush cites recent improvements in the economy, Bureau of Labor Statistics figures indicate that over the six years of his presidency, real earnings of rank-and-file workers, comparing their earnings with purchasing power, have grown only 3%.

Lawrence Mishel, president of the Economic Policy Institute, a liberal research organization, says that the nation’s trade imbalance cost 3 million manufacturing jobs in the United States from 2000 to 2005 and has brought down wages in the typical American household by $2,000 to $6,000 a year.

But at Caterpillar, Bush found room to argue for trade’s benefits.

The company employs 45,000 workers overseas -- nearly half its workforce of 94,000, according to company figures -- and Bush said that Caterpillar sales to China, where its staff numbers in the thousands, had boosted the company’s workforce in the United States by 5,000.

But Alan Reuther, legislative director for the United Auto Workers union in Washington, responded to Bush’s comments Tuesday by noting that as Caterpillar expanded overseas, it “adopted a couple of policies we think are terrible” to cut costs domestically, including a two-tier pay scale for new workers and reduced benefits for retirees and their families.

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“Meanwhile, the industry has been booming, and Caterpillar cites record profits,” Reuther said. “The feeling among our folks is they could easily do better by their workers.” Caterpillar employs about 11,000 UAW members, Reuther said.

Bush’s audience, 300 plant workers and company managers, was generally subdued. But it came alive, just as he did, when he described his encounter with a D10 track-type tractor, a behemoth of a machine.

He climbed aboard, telling reporters, “I would suggest moving back. I’m about to crank this sucker up.”

With that, the machine came to life, moving forward on its yellow metal treads, until the president brought it to a halt about 20 feet down the line and started it on a backward turn. When Bush climbed down from the cab, the inner boy was shining through, and a broad, sheepish grin crossed his face.

“Oh, yeah,” he said.

“If you’ve never driven a D10,” he told the workers and managers a few minutes later, “it’s a cool experience.”

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james.gerstenzang@latimes.com

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molly.hennessy-fiske@latimes.com

Gerstenzang reported from East Peoria and Hennessy-Fiske from Washington.

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