US will re-negotiate free trade deals

Associated Press

18 January 2007

U.S. Will Re-Negotiate Free Trade Deals

WASHINGTON — The Bush administration said Wednesday it will renegotiate the language covering labor rights in free trade agreements it has reached with Peru, Colombia and Panama, in order to get the deals approved by the new Democratic Congress.

Deputy U.S. Trade Representative John Veroneau told reporters that the three countries had been notified and predicted that an agreement on revised language could be reached without a lengthy delay.

Other U.S. trade officials said the new talks do not mean that other sections of the agreements will be renegotiated or that the deals will have to be signed again. The revisions could take the form of side letters to the main agreement.

The announcement was the strongest signal to date that the administration is prepared to modify its trade policies in light of last November’s election results in which Democrats gained control of the House and Senate.

"We are open to a dialogue," Veroneau said. He said the governments of the three nations "understand we need to make changes to achieve" the goal of getting the deals approved by Congress.

Democrats, backed by U.S. labor unions, have long complained that the free trade deals being negotiated by the administration did not include enough protections for American workers. They said that because of this, the U.S. workers’ jobs would be jeopardized by competition from low-wage countries with lax labor laws.

However, Republicans and their business supporters have fought inclusion of tougher language on labor rights, arguing that such provisions could be used to block increased trade rather than lowering trade barriers.

Business groups are also concerned that including tougher language on the right of workers to form unions could give organized labor in the United States leverage to challenge in American courts the restrictions they currently face on organizing.

"Republicans in Congress are worried that new language in the trade agreements could give unions a footing to challenge U.S. labor laws and they don’t want that," said Gary Hufbauer, a trade economist at the Peterson Institute for International Economics, a Washington think tank.

Hufbauer said the administration would have a difficult task to win agreement on language that would pick up Democratic votes without losing Republican votes.

The agreements with Peru, Colombia and Panama have not been voted on by Congress.

Veroneau said he still expected the deal will win approval before the president’s authority to negotiate agreements under expedited procedures expires July 1.

He made his comments at a briefing with reporters about his trip week to discuss trade issues in Chile, Uruguay and Argentina.