March 27, 2007 – 7:40 p.m.
It’s crunch time for the Bush administration’s trade agenda.
The clock is ticking on what could be the final week for Democrats and the administration to strike a deal to address the new majority’s concerns on trade agreements, including pacts already signed with Peru and Colombia.
The White House reached out to Democratic leaders early this year, hoping to find a way to move stalled pacts and build support for renewal of the president’s fast-track negotiating authority.
Now both sides are working to come to terms by March 31, a critical deadline for both statutory and symbolic reasons.
The administration must notify Congress of its intent to sign any new pacts by that date if the deals are to be considered under rules required by so-called trade promotion authority (PL 107-210), which is set to expire June 30. The rules call for an expedited up-or-down congressional vote, without amendment.
The administration plans to sign a trade deal it recently negotiated with Panama, and has been working on a deal with South Korea.
On Tuesday, House Ways and Means Chairman
Rangel and Levin suggested that there’s little give in their proposals, which focus on enforceable labor and environmental standards, intellectual property standards for medicines and port security.
“I don’t know how to say, ‘Take it or leave it,’ ” Rangel said, when asked if the administration could negotiate the proposal further. “They’re looking at it. . . . I know one thing, they’re not going to leave it.”
U.S. Trade Representative Susan C. Schwab called the proposal “another step in what has been a good-faith effort in a continuing dialogue by all sides.”
Many trade watchers believe this week’s talks will be crucial, sending a strong signal about the ability of the Republican White House and Democratic-controlled Congress to work together on trade issues.
“This is the make-or-break week for the trade agenda,” said Christopher Wenk, senior director of international policy for the U.S. Chamber of Commerce. “They have to have something out.”
According to the trade law, the administration must notify lawmakers 90 days before it signs an agreement.
The March 31 deadline applies to the difficult negotiations with South Korea. The administration also hasn’t officially notified Congress of the Panama deal.
The legal status of the Peru and Colombia pacts is less clear. Technically, the administration has already notified Congress of those agreements. The trade representative maintains that the March 31 deadline does not apply, but Levin has said it would if the trade deals are changed.
Rangel and Levin said they want to complete negotiations with Republican colleagues and the administration by week’s end to avoid such legal questions.
Negotiators would also have to decide how to incorporate compromise language into deals already negotiated. One way is a side agreement that would allow the nations to avoid re-opening completed deals.
Still, Rangel made clear that lawmakers are focused on substance and remain confident that the administration can work out the legal process as needed.
Rangel said Treasury Secretary Henry M. Paulson Jr. told him that “there’s nothing that we would want to do that we cannot do.”
“At the end of the day, most of this is a political contract,” observed Sean Spicer, the trade representative’s spokesman. “If the two people that are negotiating agree that some areas need to have a few more hours . . . then they’re going to make it happen.”
He said the administration’s goal is to have an agreement in hand by March 31.
Soon after the 2006 elections, Rangel made clear that trade agreements would not advance without strengthened labor standards and other concessions from the administration. The talks have involved party leaders, Ways and Means ranking Republican
McCrery and
“It goes a long way towards reaching our shared goal,” the GOP panel leaders said. “We look forward to working with Chairman Rangel and Chairman Levin to finalize language we can all support.”
The Democratic proposal calls for trade agreements to require countries, including the United States, to adopt, maintain and enforce core standards set by the International Labor Organization (ILO), a longtime Democratic priority. Those standards would prohibit forced and child labor and guarantee workers’ rights to organize unions and bargain collectively.
Levin rejected an administration proposal on labor language last month, saying it didn’t go far enough. That proposal would have required trading partners either to carry out core ILO standards or have laws that are “equivalent” to U.S. labor laws, Levin said.
In addition to labor and environmental standards, the proposal addresses concerns that current trade agreement language grants pharmaceutical companies protections that are too stringent and threaten to restrict poor countries’ access to medicines.
Democrats also have port security concerns related to some trade deals. Lawmakers complained that language in the Oman trade deal (PL 109-283) approved last year would allow foreign companies to acquire U.S. port operations without the approval of the U.S. government, although the administration disputed that assertion. The same language was included in the Peru and Colombia deals.
A company controlled by the United Arab Emirates, DP World, already operates ports in Peru, and Democrats argue that the Peru trade deal, as written, would entitle DP World to buy U.S. port operations without U.S. government approval.
Rangel and Levin made clear Tuesday that their proposal lays the groundwork for fast-track renewal as well as progress on the individual pacts. “We have now a trade policy that we think is going to be acceptable to the Republicans and to the administration for all agreements,” Rangel said. “We have a boilerplate basic policy that we expect to be in every agreement.”
The elements of the proposal go well beyond the trade agreements, calling for a major expansion of aid programs for dislocated workers and a “full partnership” for Congress in the Doha global trade talks.
Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, said failure of one or more of the pending trade deals could actually help shore up support for fast-track renewal.
Many Democrats don’t like the Latin American deals as written and oppose the Colombian pact in particular, viewing that country as a flagrant human rights violator. Labor interests have singled out the Colombia deal for defeat.
But Hufbauer said Democrats don’t want to be labeled as responsible for the death of the Doha global trade talks, which are aimed at helping poor and developing countries. Trade experts say that if the administration loses fast track, the entire round will die, although Pascal Lamy, director general of the World Trade Organization, said last week that the talks will continue even if the White House must go without the fast-track authority.
The threat to Doha, Hufbauer argues, will motivate Democrats to support fast-track renewal. “They want to say, ‘We’ll do globalization kinder and better here,’ but [they] do not want to rebuff the struggling masses in Africa or Asia or Latin America.”