Bush in accord with Democrats on trade deals

Posted in United States | 11-May-07 | Author: Steven Weisman| Source: International Herald Tribune

Representative Charles Rangel, the New York Democrat who is chairman of the Ways and Means Committee, has led negotiations to complete the trade deals along with Susan Schwab, the United States Trade representative.

WASHINGTON: The Bush administration reached agreement on Thursday with the House speaker, Nancy Pelosi, and other Democrats to attach environmental and worker protections in several pending trade accords, clearing the way for early passage of some pacts and improving prospects for others.

The unusual agreement, which came after weeks of negotiations, would guarantee workers the right to organize, ban child labor and prohibit forced labor in trading-partner countries. It would also require trading partners to enforce environmental laws already on their books and comply with several international environmental agreements.

While the understanding was a victory for Democrats, it also represented a shrewd compromise by the White House. The agreement is the first major bipartisan economic deal to emerge since Democrats took control of Congress in January. It has immediate importance for four countries — Colombia, Panama, Peru and South Korea — that are seeking to enter into trade pacts with the United States.

But officials in Washington predicted that the agreement's effect would go beyond those countries and could be a template for all trade deals, including a possible worldwide accord.

Administration officials are hoping that the agreement will cause many Democrats to support future trade deals. They hope that enough Democrats will join with Republicans, who generally support such measures, to make passage of the agreements probable, if only narrowly.

The negotiations were led on the administration side by Susan C. Schwab, the top trade envoy, and Treasury Secretary Henry M. Paulson Jr., and on the House side by Representative Charles B. Rangel, Democrat of New York and chairman of the Ways and Means Committee.

"I think today is a recognition of the results of the November election," Pelosi said at a news conference. "It doesn't mean that this paves the way for trade agreements where we have other obstacles. But where it comes down to labor standards and environment, this is enormous progress."

Schwab said that the agreement would send a message to trading partners that the United States was prepared to provide new impetus to the faltering talks for a global trade accord.

Democrats have been pressing for worker, environmental and other protections on trade deals without success since President George W. Bush took office in 2001. The absence of such protections has meant that when lawmakers passed measures that lowered trade barriers, they generally did so without the support of Democrats.

In the 1990s, President Bill Clinton was able to get only 40 percent of his fellow Democrats to endorse the North American Free Trade Agreement, and only about 60 percent to support a global trade agreement. Since then, many Democrats have soured on measures to lower trade barriers.

The breakthrough came as the politically sensitive trade deficit jumped in March to $63.9 billion, or 10 percent more than February's revised deficit of $57.9 billion, putting the imbalance at its highest level in six months.

The report, issued by the Census Bureau, followed a trend that economists have observed for several months: even as growth slows in the United States, expanding economies overseas are creating a need for American exports. In March, exports totaled $126.2 billion, up $2.2 billion from February. Those gains were not enough to offset an $8.2 billion rise in imports, which totaled $190.1 billion.

Thursday's compromise affects four trade deals pending before Congress, two of them signed and two with negotiations that are nearly complete. All four countries would have to accept the provisions agreed to with the Democrats, but trade officials said they expected no major problems.

Peru and Panama are considered most likely to win early congressional approval. Colombia is more problematic, because Democrats are demanding that, besides the new measures, more protections be added to prevent violence against activists trying to organize workers.

The South Korea accord, if put in place, would lead to the largest amount of increased trade. But it is opposed in its current version by Democrats who want greater access to that country's markets for American beef, automobiles and auto parts.

Spokesmen at the National Association of Manufacturers and other business groups hailed the understanding, but said they wanted to study its provisions before endorsing its details.

Democrats have been most wary of two administration trade priorities: concluding the global negotiations known as the Doha round, named after the city in Qatar where the talks began six years ago; and extending Bush's power to negotiate trade deals on which Congress gets only an up-or-down vote.

This negotiating authority, known in Washington shorthand as fast track, has been vigorously opposed by Democrats, who say that they cannot imagine giving Bush open-ended negotiating authority.

But Rangel said he could imagine a limited extension of such negotiating authority if the Doha round talks looked as if they were shaping up to be a good deal for the United States.

"It has been decades that Congress has been polarized on trade," Rangel said. "What this reflects is the importance that we stay engaged on trade."

Democrats representing the older industrial regions, where jobs have been lost because of imports of cheap textiles, shoes, machinery and other products made in Asia and Latin America, have generally been opposed to free trade deals.

But others in the party are more open to trade. This group tends to represent high-technology and financial services industries, which are eager to gain markets in fast-growing third world countries.

In addition, farmers have become major proponents of trade deals now that a large share of farm products are being exported. But lawmakers from farm areas have been skeptical of the administration's record in negotiating trade agreements, insisting that they will not support them unless Europe and India open their markets.

Schwab said the accord announced Thursday would help in her next talks at the World Trade Organization aimed at hammering out an agreement opening barriers for farm goods, industrial products and services. Those talks involve Brazil, India, the United States and the Europeans.

Pelosi announced the trade deal with an unusual array of Republican and Democratic lawmakers and administration members at her side, including Schwab and Secretary Paulson. Also included were Senators Max Baucus of Montana and Charles Grassley of Iowa, the chairman and ranking Republican on the Finance Committee.

Rangel and Representative Jim McCrery of Louisiana, the ranking Republican on the Ways and Means Committee, were also there.

The compromise appeared to be a striking tableau at a time of bitter partisan battles in Congress and with the administration over Iraq, actions by Attorney General Alberto Gonzales, budget issues, Social Security and Medicare.

What it seemed to show is that, on trade, a coalition of lawmakers from states that stand to gain more from increased exports than they lose from increased imports can come together if each side's interests are accommodated.

Originally, the administration had opposed the labor standards, arguing that they would provide a backdoor attempt to change American labor laws.

It envisioned trading partners suing to overthrow American curbs on union shops and teenage employment on farms and in summer jobs. These concerns appeared to fade in the face of prospects of not getting any trade deals through Congress this year.

In addition to the labor and environmental provisions, the accord would make it easier for generic drugs to be sold in foreign countries; preserve the right of the United States to bar foreign companies from running American ports; and ensure that foreign investors will not have more rights than American investors domestically. There are also promises to step up training of workers who lose their jobs because of imports.