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Trade pacts set for heated fight

Wall Street Journal | October 4, 2011

Trade pacts set for heated fight


President Barack Obama sent trade agreements with South Korea, Colombia and Panama to Congress on Monday, capping months of tense negotiations and setting the stage for a heated if brief fight between free-trade advocates and labor unions before the deals’ likely approval.

The 4 p.m. arrival Monday on Capitol Hill of three oversized envelopes addressed in calligraphy and bearing the president’s wax seal—plus 16 boxes of documents—offers Congress an opportunity to pass the three pacts, plus a related worker-assistance program, by mid-October.

"These agreements will support tens of thousands of jobs across the country for workers making products stamped with three proud words: Made in America," Mr. Obama said in a written statement.

The agreements are expected to move through the Republican-led House—the chamber where trade deals typically encounter more opposition—with relatively little trouble.

Work by the administration to mollify union opposition to the Korea pact by adding provisions favoring U.S. auto makers, and Democrats’ recognition that Mr. Obama badly needs a win on the jobs front, are expected to blunt Democratic opposition.

House Speaker John Boehner (R., Ohio) called passing the agreements "a top priority for the House."

The AFL-CIO, the nation’s largest labor federation, opposes all three agreements and will hold a Capitol Hill demonstration Tuesday to protest them. But the short timeline mapped out for passage gives opponents little time to block the deals.

Rep. Mike Michaud (D., Maine), chairman of the House Trade Working Group, is scheduled to join the AFL-CIO protest. "The president is sending mixed messages by sending these free-trade agreements," he said in a statement. "Does he want to create jobs at home with the American Jobs Act, or does he want to offshore them to places like South Korea?"

The measures could boost U.S. agricultural exports, but will likely punish textiles, electronics and computer makers. Support for the trade bills will be determined by the dominant industries in each lawmaker’s states.

"Our ranchers, farmers and businesses have waited long enough for these deals to be enacted, and this is a critical step forward," said Senate Finance Committee Chairman Max Baucus (D., Mont.). He and the House Ways and Means Committee chairman, Rep. Dave Camp (R., Mich.), helped engineer a compromise that lowered the cost of the Trade Adjustment Assistance program, which provides extended unemployment benefits to workers displaced by the effects of globalization.

Delivery of the pacts to Congress hinged on a pledge by Mr. Boehner to schedule a vote on extending the TAA program in tandem with votes on the three trade pacts.

GOP budget hawks early this year rejected an extension of the TAA measure, calling it expensive and ineffective. The Obama administration says the 50-year-old program is an important source of relief and job retraining, and the president refused to send the trade pacts to Congress without a deal on renewing it.

U.S. Trade Representative Ron Kirk and Obama economic advisers Gene Sperling and Mike Froman led talks with the GOP. But mistrust created by two years of skirmishes between Republicans and the White House more than once threatened to sink the trade agenda.

Once the deals are delivered to Congress, the president loses control of the ratification process. That fueled concerns the House would pass the three pacts and then amend the TAA bill, making it so weak the White House and Democrats couldn’t accept it.

In the end, the White House withheld the agreements until GOP leaders publicly announced a procedural vote on the TAA late Monday, as a sign of Republicans’ intention to take "tangible legislative steps" to pass the legislation.

The three trade deals and the bill extending TAA will be voted on in the House the week of Oct. 10. The legislation then moves to the Senate, which has already approved the TAA renewal.

Under the timeline agreed to by the White House and GOP leaders in the House, that chamber will likely take a procedural vote on the TAA program Wednesday. Also Wednesday, the trade deals would receive a final hearing, known as a markup, at the House Ways and Means Committee.

The agreement is designed to move the trade pacts swiftly, partly in preparation for a state visit by Korean President Lee Myung-bak on Oct. 13.

Write to Elizabeth Williamson at [email protected]

 source: WSJ