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Congress begins action on Bush-era trade deals

By Reuters
Thursday, June 30, 2011 8:30 EDT
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WASHINGTON (Reuters) – President Barack Obama’s controversial plan to win approval of free trade deals with South Korea, Colombia and Panama faces its first test on Thursday as the Senate Finance Committee takes up the bills.

Republicans typically supply most of the votes for free trade agreements, but at least three of the 11 Republicans on the panel say they will vote against the Korea deal if the White House sticks to a plan to include renewal of a worker retraining program in the implementing legislation.

Those potential opponents include the panel’s top Republican, Senator Orrin Hatch, who is up for reelection next year and is under pressure from the Tea Party conservative movement to take a tough line on spending.

Jeffrey Schott, a senior fellow at the Peterson Institute for International Economics, said he expects plenty of fiery rhetoric from Republicans during the Finance Committee session to vote on non-binding amendments to a draft version of bills to implement the three pacts.

But Schott said he expected all three trade deals to pass, possibly by the end of July, after a bumpy ride through the Senate and the House of Representatives.

“It seems to me the decision to go forward basically means that they figured they have the votes,” Schott said.

The Finance Committee session, and a similar one expected next week in the House Ways and Means Committee, gives lawmakers an opportunity to help shape the final bills Obama is expected to send to Congress in July.

Under previously agreed rules, the trade deals cannot be amended once Obama formally submits them for votes.

The three agreements together are expected to boost U.S. exports by about $13 billion, which Obama has said will help create tens of thousands of new American jobs.

The trade deals with South Korea and Panama were signed exactly four years ago during the administration of former Republican President George W. Bush, while it has been nearly five years since the Colombia deal was signed.

A rival trade deal between the European Union and South Korea goes into force on Friday and another between Canada and Colombia in August, putting pressure on Congress to act.

Many of Obama’s fellow Democrats, who controlled Congress during the last two years of Bush’s presidency, oppose trade agreements, which they blame for killing manufacturing jobs in the United States.

To reduce that opposition, Obama negotiated more favorable auto provisions in the Korean agreement, signed a tax information exchange treaty with Panama and concluded an action plan with Colombia to address longstanding concerns about anti-union violence in the Andean country.

CONSERVATIVE OPPOSITION

Obama angered Republicans in May when he said he would not send the pacts to Congress for votes until there was a deal to renew an expanded version of Trade Adjustment Assistance (TAA), which provides retraining and income assistance for workers who have lost their jobs because of foreign competition.

The program was broadened in 2009 to cover more workers and provide more generous healthcare assistance.

But those new benefits expired early this year and House Republicans, fresh from their victory at the polls in November, balked at renewing them after the conservative group Club for Growth came out in opposition.

Republicans now want a separate vote on TAA even though one of their leaders — House Ways and Means Committee Chairman Dave Camp — helped negotiate the scaled-down two-year extension TAA included in the Korea trade deal.

Camp says he won a number of significant concessions from the White House. Those include reducing the number of weeks for income support and making it harder for workers to get income support if they are not receiving training.

The reforms also reduce the healthcare coverage tax credit and deny eligibility for public sector workers, a group added to the program in the 2009 expansion.

Barney Keller, a spokesman for Club for Growth, said the group remained opposed to TAA but supported the three free trade agreements. It believes lawmakers should have the chance to vote on each initiative separately, Keller said.

Most U.S. business and farm groups want the agreements and recognize TAA must be part of the mix. Organized labor supports TAA but opposes the trade deals.

(Reporting by Doug Palmer; Editing by Paul Simao)

Reuters
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