Election Alters Trade Climate

By Peter S. Goodman
Washington Post Staff Writer
Tuesday, November 14, 2006

As Democrats prepare to take control of Congress, incoming leaders are planning to insert labor and environmental protections into pending trade treaties and to demand that the Bush administration adopt similar measures in future pacts it negotiates, congressional aides and government officials said yesterday.

The Democrats plan to insert restrictive provisions into two pending trade deals with Peru and Colombia, measures that would limit duty-free access to the U.S. market for goods made in those countries if factories are found to use child labor or deny workers the right to organize unions.

Republicans have historically opposed restrictive provisions in treaties as against the interests of U.S. business and consumers. President Bush has already signed the Peru accord and is expected to sign the Colombia treaty this month. Democrats plan to take a similar approach to deals still being negotiated by the United States trade representative with South Korea, Malaysia and Panama, Capitol Hill aides said.

The new atmosphere surrounding trade issues was underscored last night as members of the House -- breaking with Democratic and Republican leaders -- voted to reject a normal trade relationship with Vietnam, following that country's accession to the World Trade Organization last week.

At the center of the new trade dynamic is the fate of the president's so-called fast-track trade authority -- the administration's existing power to call for a simple up-or-down congressional vote on trade pacts without opening them for amendments. The administration's authority is set to expire at the end of June. Democratic leaders say they are inclined to renew it but only if labor and environmental provisions are included.

Yesterday, Sen. Max Baucus, the Montana Democrat in line to chair the Finance Committee, said any law reauthorizing the president's fast-track authority would have to "strengthen labor and environmental provisions in some way to win broader Democratic support."

The shift on trade policy is a reaction to more than a dozen years of efforts by the Bush and Clinton administrations to boost trade by opening foreign markets to U.S. goods while allowing greater access to imports from China, Latin America and elsewhere.

The U.S. mood mirrors a world trend, as people on every shore grapple with the challenges of globalization. In Eastern Europe, former communists are returning to power, riding electoral discontent over the loss of jobs. South Korean farmers are protesting the prospect of imported U.S. rice if a free-trade deal is struck. From Ohio to Montana, incoming Democrats made trade an issue in the campaign, accusing Republicans of selling out American workers to corporate interests, and vowing to oppose further trade liberalization.

"For 20 years, we've been told, 'Don't worry, there's going to be a more sophisticated economy, an economy based on knowledge and information,' " said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, which represents U.S. factories, including textile mills in Southern states that have been ravaged by competition from China. "Manufacturing? Well, we can supposedly let that go, because we're going to get something better. Well, we've been waiting, and now we're making less money, and workers are told they have to give up health benefits and pensions and wondering, 'How am I going to make it?' "

Such feelings played a role in the voter anger that remade Congress in last week's elections, he said. "It's going to be heavy lifting for the administration to convince Democrats in the House and Senate to give this president the hand to go out and pursue his trade agenda," Tantillo said.

Business leaders took that message from the startling vote in the House last night, which rejected what had seemed a virtual certainty -- the approval of normal trade relations with Vietnam. The vote needed a two-thirds majority, but it failed 228-161, with Democrats voting it down 94-90.

"It sends a very bad signal to the business community," said Nicole Venable, director of international trade and global competitiveness at the U.S. Chamber of Commerce. "This bill should have been a no-brainer."

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