Bush, U.S. business push for fast-track trade authority

Bush, U.S. business push for fast-track trade authority President Bush called on Congress during a speech at the New York Stock Exchange Wednesday to renew fast-track authority for the White House to conclude free trade agreements with other countries.
   The current Trade Promotion Authority, which allows the president to negotiate trade deals and then send them to Congress for an up or down vote without amendments, expires on July 1. Supporters want the authority extended until January 2009.
   Many political observers believe that the prospects for new bilateral or multilateral trade agreements diminished when Democrats took control of the Congress in the November election. Thirty-nine of the 42 freshman Democrats in the House recently wrote House Ways and Means Chairman Charles Rangel to oppose the administration's free trade agenda, which includes trying to complete trade pacts with South Korea and Malaysia.
   Bush said trade agreements benefit companies and workers by opening markets, lowering prices and increasing productivity. Jobs that support exported products pay wages that are 13 to 18 percent higher than the average, he said.
   On Monday, Bush visited the Caterpillar heavy machinery plant in Peoria, Ill., which exports more than half the products it makes.
   'I know there's going to be a vigorous debate on trade, and bashing trade can make for good sound bites on the evening news. But walling off America from world trade would be a disaster for our economy,' Bush said. 'Congress needs to reject protectionism, and to keep this economy open to the tremendous opportunities that the world has to offer.'
   The AFL-CIO issued a statement opposing Trade Promotion Authority, saying that trade agreements have resulted in the loss of 3 million manufacturing jobs to foreign sources and stagnant wages.
   'Extending 'fast track' authority would hamstring Congress's ability to fix our broken trade policy at a time when working families are in dire need of a correction in course,' said John Sweeney, AFL-CIO president.
   Labor groups and Democrats argue that the Bush administration has folded too easily on important principles in its eagerness to reach trade deals.
   U.S. trade is equivalent to more than a quarter of the gross domestic product and a U.S. Chamber of Commerce official said the focus is too often on reducing import tariffs when a key benefit is lowering tariffs abroad to stimulate U.S. exports.
   'You don’t necessarily grow GDP by just importing,' said Mark Smith, managing director for Western Hemisphere Affairs, during the American Association of Exporters and Importers winter conference in New Orleans this week. 'But for some reason these are (considered) job-killing agreements that are leveling the playing field.'
   Prior to the conclusion of the Central American Free Trade Agreement in late 2005, about 98 percent of goods from Costa Rica, the Dominican Republic, Honduras, El Salvador, Guatemala and Nicaragua entered the United States tariff free. Now U.S. exporters are getting that same duty-free treatment in those countries, Smith said.
   The free trade agreement with Chile has resulted in a 140 percent increase in U.S. exports to that country since mid-2005, he added.
   'We need to replace the unilateral preference programs that we have, particularly with the Andean nations, with real robust trade agreements that not only eliminate export duties that our manufacturers face but ensure that we don't lose market share,' Smith said.
   He called free trade agreements 'transformative' because they 'represent about 15 years of economic reform in one package' for less-developed countries.
   The Bush administration has concluded 10 free trade agreements since it took office in 2001. A lot of effort continues to be put into completing global trade talks, known as the Doha round. At the World Economic Forum in Davos, Switzerland, last week U.S. Trade Representative Susan Schwab and other trade ministers agreed to reopen the stalled talks.
   But some industry advocates believe the chances of quick success are slim at this point because the focus remains on agriculture rather than manufacturing and services. Trade Promotion Authority is essential to passing Doha and other trade deals, they say.
   Business groups acknowledge that getting trade deals through the Congress will be tougher, but can be done if all sides are flexible.
   'I think it’s premature to write off' any chances of free trade agreements, Christopher Wenk, director of international trade policy for the National Association of Manufacturers, said in New Orleans.
   Political observers say the key to unlocking free trade agreements is labor standards in foreign countries, and the administration is negotiating with the Democrats on the Hill to address their concerns. Schwab has indicated a willingness to come up with a new model for trade packages.
   Wenk said it is frustrating that some union groups such as the AFL-CIO appear to be moving the goal posts by adding other conditions to the free trade agenda.
   'Any agreement that gets the expedited consideration and an up-or-down vote included in fast track must include enforceable core international worker rights and enforceable environmental standards. It must also include rules on investment, government procurement, intellectual property rights, and services that strike the right balance between democratic accountability, development concerns and international obligations,' Sweeney said.
   'No longer should Congress be expected to take an up-or-down vote on a bad trade deal without proper consultation and participation at earlier stages of negotiation. Congress should be consulted throughout the process and should certify whether a proposed agreement fulfills the mandatory negotiating objectives. If not, Congress should send the president back to the bargaining table until the agreement is one that the American people can support — one that will ensure that the benefits of trade are more equally distributed rather than concentrated in too few hands,' he said.
   In a statement that suggested willingness to compromise, U.S. Chamber of Commerce President Tom Donahue said, 'The overwhelming majority of Americans derive great benefits from international trade, and those few who are hurt should be helped.'
   The challenge for the Korea free trade agreement is that it must be wrapped up by March in order to be considered under the current fast-track authority. Negotiators completed their sixth round of talks Jan. 19. Non-tariff barriers and continuing Korean rejection of U.S. beef shipments because of concerns about 'mad cow' disease are big sticking points.
   Congress came close to passing a trade pact with Peru in August and during the lame duck session in the fall. Now it's unclear if such an agreement will go forward on its own or in tandem with other agreements.
   Smith predicted Congress would deal with a Peru free trade agreement first, followed by deals with Colombia and Panama. The deals are at different levels of maturity.
   The Peru agreement has been approved by the Peruvian Congress and has completed three-fourths of its way through the U.S. legislative process. The Colombian pact is being considered by the Colombian legislature but has not reached the U.S. Congress for review. The United States recently completed Panama trade talks, but left open a the labor chapter to accommodate 'whatever grand bargain the USTR and the congressional leadership can come up with,' Smith said.
   An open question is whether the administration will be forced to go back to Peru and seek a side agreement with extra conditions.
   A trade deal actually has the potential to return some manufacturing jobs to the United States, Smith said. Camcorder manufacturers might find it useful to produce in the United States because their products face a 60 percent tariff if imported from China.