Trade deals face tricky path to approval

Reuters News
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Posted: Sep 06, 2011 1:13 PM
Trade deals face tricky path to approval

By Doug Palmer

WASHINGTON (Reuters) - After a heated fight this summer over the U.S. debt ceiling, cooler-headed Republicans and Democrats could come together this fall to pass three long-delayed free trade agreements.

But to get past distrust built up on each side, business groups such as the National Association of Manufacturers and the U.S. Chamber of Commerce anticipate a series of votes on related trade issues leading up to the pacts with South Korea, Colombia and Panama, each signed more than four years ago.

The process is expected to begin on Wednesday with action on an expired program that helps domestic manufacturers by waiving duties on goods from developing countries.

Former U.S. Trade Representative Susan Schwab said she was optimistic Congress would soon pass the trade deals but worried the effort could fail if the White House "overplays its hand" on Trade Adjustment Assistance.

The White House and Republicans have locked horns this year over TAA, a longstanding program to help retrain workers who have lost their jobs because of foreign competition.

The program was expanded in 2009 to cover services industry workers and provide more generous benefits. Those reforms have expired, but the core program continues.

Many Republicans, with a strong push from the party's anti-spending Tea Party wing, question the need for TAA and its effectiveness. Democrats argue it is a key part of the U.S. social safety net.

Earlier this year, House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, struck a deal with the White House and a key Senate Democrat on a slimmed down version of TAA that includes many of the 2009 reforms.

But Republicans in both the House of Representatives and the Senate objected to White House plans to include the revamped program in the implementing legislation for the South Korea deal.

Democrats feared the program would be killed if not shielded by legislation for one of the trade pacts, which under previously agreed rules cannot be amended.

So, the administration and Congress have been looking for a separate path to get both TAA and the trade deals approved.

Administration officials have said Obama will submit the pacts for congressional approval after the exact timing and sequence of votes have been agreed.

VOTES IN HOUSE AND SENATE

One industry official, who asked not to be identified, said he expected the process to begin on Wednesday with House renewal of the Generalized System of Preferences, a program that allows developing countries to sell thousands of goods in the United States without paying duties.

That bill would then be sent to the Senate, which is expected to amend the GSP legislation by attaching the TAA compromise negotiated earlier this year.

The combined package would return to the House, where it would await Obama's formal submission of the trade deals.

The House would then vote "in tandem" on the four pieces of legislation, sending the GSP-TAA bill to Obama's desk for his signature. The three trade deals would go to the Senate for final congressional action before going to the White House.

Because of the relatively few legislative days in September, the process could stretch into next month.

Several congressional aides noted some details remain to be worked out, but said they expected a roughly similar process.

Also, some lawmakers could push for votes on China currency legislation and other controversial trade issues, potentially further delaying or jeopardizing the trade deals.

Schwab, who was former President George W. Bush's chief negotiator when each of the deals was signed, said she believed approving the "TAA compromise is a small price to pay for the free trade agreements. That's the view of the business community and I share that view."

But the sequencing of votes matters, and Schwab said she feared the effort could collapse if Obama insists the Republican-controlled House approve TAA before he submits the trade pacts to Congress for votes.

Failure to pass the trade deals would hurt U.S. manufacturers, farmers and service companies eager to expand exports to three countries, she said.

It would also undermine the Obama administration's own efforts to craft a regional free trade agreement with eight other countries in the Asia Pacific region, she said.

"If these things don't go through this fall, we have zero credibility. Zero. Not just in the Transpacific Partnership talks but in other international negotiations," Schwab said.

(Editing by Mohammad Zargham)