(CNN)What started out as a dispute between dockworkers and their employers could be about to become a political nightmare for the Obama administration.
'It's complicated' for Obama in West Coast labor dispute
After a contract between West Coast port operators, represented by the Pacific Maritime Association, and dockworkers, represented by the International Longshore and Warehouse Union, expired last June, the two parties have been unable to reach an agreement.
A federal mediator requested that the parties not talk about the substance of the negotiations away from the bargaining table, so it's hard to know exactly what's at stake and how far apart they are, though the dispute seems to be focused on work rules and arbitration of future disputes about the contract.
President Barack Obama sent Labor Secretary Tom Perez to California this week to mediate the dispute. The White House and Labor officials would not comment on reports that if no progress was made soon, the talks would be moved to Washington.
A senior administration official said day one of Perez's trip made "tremendous progress." Day two was characterized slightly less enthusiastically: "positive and productive."
Former acting Labor Secretary Seth Harris said Perez's presence puts pressure on the two parties to make progress.
"It puts a great deal more political pressure and profile on the negotiations and, hopefully, shakes things up enough to get the parties to a deal," Harris, now counsel for Dentons and distinguished scholar at Cornell University's School of Industrial and Labor Relations, told CNN.
Although the workers are back to work, without a contract in place, there's the risk that the employers could renew a partial or full lockout or workers could strike. The economic impact, according to some estimates, could be billions of dollars in lost commerce.
The dispute affects all industries that ship goods out of the U.S., import goods into the U.S., or have components that are brought into the country through these 29 West Coast ports.
"Car companies are saying they're not able to continue production. Retailers are losing access to product. Agricultural products are rotting in their containers because they can't be shipped overseas," Harris said.
"When all that economic impact began to be felt, it became very difficult for the President to do nothing.
If Perez determines that there's no hope of reaching an agreement, the President could be forced to make a difficult choice..
Under the Taft-Hartley Act,, if the President concludes that a strike or labor dispute is a threat to the country's health or safety, he can go to court and seek an injunction to force everybody back to work.
This is where a labor dispute could become a more complicated political issue.
Obama is on track to send Congress legislation that will give him fast-track trade authority, an essential tool to win congressional approval of the Trans-Pacific Partnership, a trade deal with 11 Pacific Rim nations, making it the largest trade deal in American history.
The labor movement is generally strongly opposed to fast-track authority and the Trans Pacific Partnership.
"If the President intervenes on behalf of management or does something that is perceived to be better for management than for unions in this labor dispute, that could inflame an already difficult discussion with the labor movement about trade," said a former senior administration official.
It's happened before. In 2002, President George W. Bush was placed in similar circumstances during a ports labor dispute. He directed then-Labor Secretary Elaine Chao to find a resolution, but Chao was not able to get the two sides to agree. Bush went to court to secure an injunction that forced the parties back to work, a move that was criticized by AFL-CIO President Richard Trumka and other labor leaders.
If the parties fail to reach an agreement despite Secretary Perez's mediation efforts, pressure on President Obama to act from business groups, like the U.S. Chamber of Commerce and the National Retail Federation, and members of Congress will mount.
"There's a big question mark about what President Obama does next if there is no contract and the slow down in the ports continues," Harris said.