White House eyes new trade war
Politico | March 12, 2008
White House eyes new trade war
By: Victoria McGrane and Patrick O’Connor
The White House is moving toward sending the Colombia Free Trade Agreement to Congress without the blessing of Democratic leaders.
“There is a growing inclination that the president is going to have to send up Colombia,” said an administration official.
If the White House proceeds - no final decision has been made yet - it would be a move guaranteed to stoke partisan strife over trade, already a burning issue on the campaign trail. And it could unleash negative foreign and trade policy consequences, a prospect that has pro-trade wonks and lobbyists tied in knots.
Already, a coalition of business groups pushing for the trade deal is forming “war rooms” and ramping up lobbying efforts in anticipation of the coming battle.
While not a legal requirement under the special trade rules governing the Colombia pact, the congressional blessing is well-established protocol. Trade experts can’t recall any administration violating the de facto requirement since the special “fast track” trade rules first emerged under President Franklin D. Roosevelt.
“There is a lot of risk in just sending this up,” said one Republican lobbyist whose clients are pushing for the free trade deal. “It will be unprecedented all around.
“Some people think this is all about politics,” the lobbyist said, “but this has serious consequences.”
The Colombian trade pact has been a tough sell in the Democratic-controlled House. Labor unions vehemently oppose it because of the country’s history of violence against labor leaders and inadequate government response. And Democrats say the Colombian government has been slow to meet congressional requests for information about the country’s labor laws and what steps it has taken to improve conditions for its workers.
White House officials, however, say they want to address those concerns to move the pact forward, but they can’t get Democratic leaders to detail a specific to-do list.
“They don’t see any other option to try to get a vote,” one lobbyist said of the administration’s consideration of sending the pact to Capitol Hill.
The administration has always said this “pull-the-trigger” option was on the table. But in recent weeks, the White House started taking steps to develop mere possibility into an actual game plan, lobbyists and aides familiar with the negotiations say.
The shift is largely driven by timing. Trade promotion rules lay out a 90-day legislative timeline that requires both chambers to hold up-or-down votes on a trade pact, without amendments.
The White House now fears that it will reach a point where there aren’t 90 legislative days left on the calendar, essentially allowing Congress to push the vote off until next year.
Administration officials, who stress they’re still trying to garner Democratic congressional support, have held a number of meetings about the trade pact in the past week with lawmakers and others on Capitol Hill, including Treasury Secretary Henry Paulson’s meeting with House Speaker Nancy Pelosi (D-Calif.).
Inside the White House, debate over the trade pact has escalated. No decision has been made on when to submit it to Congress. But some advisers are pressuring President Bush to send it this week, forcing Congress to act before its August recess.
Several lobbyists said, however, the White House has since decided to hold off a bit, in part because House Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.) is recovering from the flu and unable to weigh in.
Approving the Colombia pact is a major priority for the president in his last year in office. The administration has hosted bipartisan congressional delegation trips to Colombia to showcase the country’s progress toward curbing violence. High-ranking administration officials have held weekly briefings with business leaders. And Bush has pressed for its passage in several major speeches, including his State of the Union address in January.
He’ll repeat his trade arguments, particularly for the Colombia pact, Wednesday in a speech to the U.S. Hispanic Chamber of Commerce, touting both the economic benefits as well as “the critical strategic needs in the hemisphere,” White House spokeswoman Emily Lawrimore said.
The White House argues that Colombia is an important U.S. ally in the region and a counterbalance to the volatile Venezuelan president, Hugo Chavez. The trade pact will help Colombian President Alvaro Uribe “counter the radical vision of those who are seeking to undermine democracy and create divisions within our hemisphere,” Bush said last week.
Even pro-trade allies aren’t convinced a more aggressive administration strategy will work. And key Democrats warn that forcing a vote would damage relations between the two branches of government and undo the work that administration officials and Democrats did last year to build a bipartisan consensus on trade.
“It would be a mistake,” said Rep. Sander M. Levin (D-Mich.), chairman of the Ways and Means Trade Subcommittee. “It would be a step backward in all respects.”
The move “gives the Democrats the perfect excuse to vote against it,” argued William Reinsch, president of the National Foreign Trade Council, which is lobbying for the deal.
It would allow Pelosi to argue that Democrats should vote against the pact because the administration violated the protocol, said Reinsch, a former undersecretary of commerce for export administration in the Clinton administration.
“It turns it into a procedural issue and not a substantive issue,” he said.
Pelosi could also have the House Rules Committee free her from the obligation to schedule a vote - something that’s perfectly permissible under the trade promotion law. Or she could call the vote immediately, giving lobbyists little time to find the 30 or so Democratic votes they need to win House approval.
All the uncertainty has trade lobbyists wringing their hands.
“There’s great anxiety,” said one lobbyist. “This will be seen as a very divisive and provocative action, regardless of if it’s prompted by the Democrats’ failure to engage in a meaningful dialogue on how to move” the Colombia pact.
Even if the trade agreement would squeak by, the process would bruise egos and inflame tensions, none of which is good news for the other two trade agreements waiting in the wings - pacts with Panama and South Korea.
On the other hand, lobbyists fear scuttling the deal would chill the possibility of future trade negotiations. And it would particularly send a negative message to South Korea, a market representing a substantial economic opportunity for many U.S. firms, they say. South Korea has not ratified the deal yet, either.
Administration officials and others also fear serious foreign policy fallout. Loss of the pact would be a hit for Uribe’s free-market policies, embolden populist-leaning forces in Colombia, and strengthen the influence of Chavez and other anti-American players in Latin America, critics argue.
“U.S. policy will be very much on the defensive in northern Latin America,” said Gary Hufbauer, a trade expert at the Peterson Institute for International Economics. “The next president will have a fairly big repair job to do.”
AFL-CIO’s policy director Thea Lee, however, doesn’t find the foreign policy argument persuasive. Colombians’ distaste for Chavez is well-known, so it seems unlikely the entire country would suddenly vote for a Chavez ally if the free trade deal fails or doesn’t come to a vote, she said.
“I don’t think you can just wave the foreign policy flag and expect the votes to line up automatically,” she said.
