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Tuesday, 08 April 2008 11:03 |
The Wall Street Journal
A modest trade pact between the U.S. and Colombia has escalated into a broad test of the nation's commitment to free trade and a potentially divisive issue in a volatile election year.
President Bush on Monday formally asked Congress to approve the pact, giving the Democratic-controlled Congress 90 legislative days to approve or reject it. The move puts the trade issue squarely in front of the Democrats at a time when trade has been greeted skeptically by voters. Democratic presidential candidates Barack Obama and Hillary Clinton have said they oppose the pact.
With Democrats and their union allies organizing to defeat the legislation, the prospect of a loss is already sparking worries overseas. South Korea also has a deal awaiting congressional passage, and talks for a global trade pact remain stalled. Trade negotiators in Europe and Asia worry that those trade deals would have a far more difficult time getting through Congress than one with Colombia, which has received billions of dollars in U.S. aid over the past decade.
Senate Majority Leader Harry Reid said that by pushing the bill without fully consulting with Congress, Mr. Bush is sending the pact "under circumstances that maximize the chances it will fail." He also cited Democratic concerns about human-rights abuses in Colombia. While there is support in Congress for foreign aid for Colombia, the Nevada Democrat said, a free-trade agreement shouldn't be confused with "a foreign-aid package."
"This is the ultimate test of whether the bipartisan consensus that has underlain trade policy for 70 years has collapsed," said C. Fred Bergsten, director of the Peterson Institute for International Economics, a free-trade think tank in Washington, D.C. "It has certainly been fraying, but there has been a modicum of Democratic support thus far."
The depth of the opposition was demonstrated vividly over the weekend when Mark Penn, Sen. Clinton's chief strategist, stepped down after the disclosure that he met with Colombia's ambassador. Mr. Penn was discussing how to sell the deal as part of his work for a separate public-relations firm. The Colombian government said Saturday it would cancel its contract with his firm.
By pushing the issue now, Mr. Bush could paint the Democratic contenders as beholden to the party's union supporters, which could also become an issue in the November campaign at the presidential and congressional level. It could also help erode rising support from business groups for the Democrats, who have chipped away at that traditional Republican base.
Over the past decade, Democrats have increasingly blamed trade deals for the decline of manufacturing jobs and the deepening of income gaps between the well off and the rest of society. Former President Bill Clinton, Sen. Clinton's husband, pushed the sweeping North American Free Trade Agreement with Mexico and Canada. Suspicion of free trade has grown since then. Mrs. Clinton has had to separate herself from her husband's record of governing largely as a free trader. Sen. Obama has matched her anti-free-trade positions.
The White House is betting that it will be able to peel away enough Democrats to win approval -- and if not, the White House can blame Democrats for the loss. Some Democrats may be willing to trade their vote for a Colombia deal as a way to extract White House support for a slew of Democratic initiatives, including expanded jobless benefits, an increase in spending on food stamps and support for a twice-vetoed bill that would expand a health program for low-income children.
Fast-Track Authority
At the White House, Mr. Bush said the deal "deserves bipartisan support from the United States Congress." Earlier, Mr. Bush had called House Speaker Nancy Pelosi to privately notify her of his intention to send the pact up to Capitol Hill. She encouraged him not to, a congressional official said.
Mr. Bush is pushing the bill under what is known as fast-track authority. It allows the White House to submit trade deals to lawmakers to accept or reject, with no amendments, over a limited period of time.
At issue is a fairly standard trade agreement. But labor unions and human-rights groups want to use the prospect of a trade pact as leverage to get the Colombian government to do more to protect local labor organizers from assassination and intimidation. Human-rights activists say more than 2,500 trade unionists have been killed in the past two decades in Colombia.
Colombia argues that it has made progress controlling violence, including reductions in kidnapping and its once-skyrocketing murder rate. The army has driven back the FARC guerrillas, once at the gates to the capital, to the country's jungle periphery.
Under the agreement, Colombia will open its agricultural, manufacturing and service markets to U.S. companies, while the U.S. will make permanent tariff cuts for textiles, apparel, cut flowers and other goods. As in most bilateral deals with the U.S., the smaller country made bigger concessions on the extent of tariff cuts, but hopes the deal will lead to a boom in foreign investment.
Colombian officials expressed surprise that the U.S. might reject the pact, especially since Colombia agreed to add provisions sought by Democrats after formal negotiations ended to protect labor rights and the environment. "For the U.S., the free-trade treaty is one more treaty. For Colombia, it's the symbol of our relationship with the U.S.," said Defense Minister Juan Manuel Santos in an interview.
'Fully Mobilized'
Nevertheless, said Thea Lee, policy director of the AFL-CIO, which represents some 10 million workers: "The gauntlet has been thrown. We are fully mobilized at every level." That's unlike a fight last fall on a similar trade pact involving Peru. The AFL-CIO didn't actively oppose that pact and Congress approved it by a wide margin.
Two-way trade with Colombia is a mere fraction of overall U.S. trade flows, totaling just $18 billion last year, or less than 1% of total U.S. trade. The U.S. ships wheat, corn and a range of manufactured goods. Colombia ships farm products such as fruit and coffee, as well as coal, textiles and other items.
U.S. trading partners have been closely monitoring the Colombia deal as a signal of the depth of anti-free- trade sentiment in the U.S. The European Union delegation in Washington regularly sends back reports to Brussels on the Colombia talks. The U.S., EU and developing nations are locked in stalled negotiations over a global trade round, where the U.S. and EU are being asked to greatly liberalize farm subsidies in exchange for greater access to markets in fast-growing developing nations.
In Asia, South Korea also has been watching the progress of the Colombia deal, as has Japan, which fears that a U.S.-Korea deal may put Tokyo at a disadvantage. South Korea and the U.S. have concluded a trade pact, but President Bush hasn't yet submitted the bill to Congress. The approval process could be contentious because South Korea's agricultural and automobile markets have been tough for U.S. producers to break into.
The pact "is one of the very, very important initiatives for both countries," said Il SaKong, chairman of South Korea's National Competitiveness Council. For South Korea, "it gives us easier access to the world's biggest market."
If the U.S. rejects a Colombia pact, said Marcus Noland, a Korea expert at the Peterson Institute, the fallout in Seoul would be hard to predict. It might make further concessions to Washington, he said, or it might decide that cutting a deal with the U.S. is impossible. In that case, it might focus instead on a deal with the EU, he said.
Toxic Issue
The fight over the Colombia deal is likely to make trade an even more toxic issue in presidential politics. Sen. John McCain, who's in line to be the Republican nominee, stands squarely behind the White House and its business allies. Sens. Clinton and Obama have pushed their skepticism of trade heavily in states such as Ohio and Michigan, which have been hit hard by manufacturing-job losses.
With jobs tough to find and wages stagnant, "the public [is] looking for an easy culprit," said Robert Reich, Labor Department secretary under former President Bill Clinton and an occasional adviser to Sen. Obama. "The easiest culprits are trade and immigration. Blame foreigners." He said that neither Republican nor Democratic administrations have done enough to retrain workers for decent jobs.
Ms. Pelosi, a California Democrat, is opposed to action now on the pact, and had urged the president not to submit the deal. Some Democrats, looking for ways to derail the pact, are pushing for a special vote that would amend House parliamentary rules and defer action indefinitely. Still others are considering whether to force an early vote. Doing so would require the White House to scramble for support, further reducing its chances of success.
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