In U.S., Trade Hits Stiff Head Wind
Proposed Deals Face Resistance

By Anthony Faiola
Washington Post Staff Writer
Friday, February 15, 2008; D01

As the Bush administration races to push free-trade agreements with Colombia, Panama and South Korea through Congress before leaving office next year, it is meeting a level of resistance observers call high even by the normally contentious standards of such debates.

It happens as the administration is confronting the most hostile domestic environment toward free trade in years. Recent polls suggest more Americans than ever view globalization as negative, blaming free trade for the loss of millions of manufacturing jobs that have moved overseas. As the economy falters, populist pundits of the Lou Dobbsian school are blaming reckless trade deals. In a hotly contested election year, Democratic candidates are jockeying for the labor vote, questioning the wisdom of such accords as the North American Free Trade Agreement.

Anti-globalization sentiments at home are nothing new. Think back to Ross Perot's "great sucking sound," or the rock-throwing protesters at the World Trade Organization's 1999 meeting in Seattle. But observers say the stalled Colombia, Panama and South Korea deals are raising a fundamental question for the United States. At a time when faith in free trade is seriously failing in various corners of the world, particularly Latin America, is Washington itself still a true believer?

Since World War II, free trade emerged as America's economic mantra, Uncle Sam's recipe for developing nations seeking to fight poverty and integrate globally. But even as economists grumble about resurgent resistance to open markets by emerging economies including India and Brazil, perhaps the most notable shift is happening in the United States.

"It's very alarming," Commerce Secretary Carlos M. Gutierrez said. "This is the very time for us not to have second thoughts or convey a lack of confidence in free trade to the world."

The power of global trade, foreign investment and open markets is lifting hundreds of millions of out poverty in China. But implemented the wrong way, and mixed with ill-conceived government policies, it can produce tragedies such as Argentina's spectacular economic collapse in the early 2000s. Many in Buenos Aires blamed the crisis, at least in part, on steep losses in domestic manufacturing jobs as lowered trade barriers brought a flood of cheaper, foreign-made products.

The Bush administration's first showdown is set to come over the agreement with Colombia, an accord whose significance is more symbolic than economic. Colombia's economy is smaller than that of many U.S. states, though the fate of the agreement is likely to be seen as a bellwether for U.S. trade policy.

Leading Democrats and some Republicans cite numerous reasons to oppose the deal. Of overriding concern, they say, is a pattern of murders against union members there and what they call the inability of leaders in Bogota to adequately address the problem. But critics also insist that the administration has yet to prove the deal, as well as those with South Korea and Panama, would benefit average Americans

Seeking to answer that, Sens. Byron L. Dorgan (D-N.D.) and Sherrod Brown (D-Ohio) presented legislation last week that would make it more difficult to pass trade agreements unless they are accompanied by a more thorough financial analysis. It would mandate inclusion of what they call essential data, such as estimates of how many U.S. jobs would be lost or gained. "The facts are [Colombia] is another trade agreement modeled on NAFTA," Brown said. "We will stop it."

The senators and other opponents argue that the problem isn't the concept of free trade, but that the Bush administration has been soft on enforcing fair trade. Seoul's automakers, for instance, would win greater access to the U.S. market under its pending deal despite charges that the South Koreans have failed to uphold promises to open their markets to American cars. Although the new accord would mandate wider access to the Korean market for U.S. automakers, and provide for penalties if that doesn't happen, Democrats call it too little, too late.

Free trade "isn't our pi¿ata, it's not that somebody has a blindfold on and is striking at it," Rep. Sander Levin (D-Mich.), chairman of the trade subcommittee, said. "What's happening here is that we've had years of a passive trade approach from this administration. They have had a mindless policy that even if trade is one sided, it's better than nothing."

Critics also argue that while free trade may have brought down prices of household goods for millions of Americans, the cost of those bargains has been borne by exploited laborers abroad. They point to disclosures last year that scores of foreign workers in apparel factories in Jordan, booming since that country reached a free-trade accord with the United States, were laboring under slave-like conditions.

Colombian business leaders, however, offer a very different picture. They say that the expanded trade preferences already being offered to Colombia by the United States, which would be made permanent by the passage of a comprehensive free-trade agreement, have created a large number of desperately needed jobs. They especially credit export-fueled gains in their apparel and fresh-cut flower industries for helping spark an economic renaissance in cities including Medellin and Cali, where violent crime and unemployment have dropped sharply in recent years.

Colombia's current trade preferences expire this month. Though administration officials and Democrats alike say an extension is likely to pass soon, a full-blown trade deal, the Colombians say, would help them solidify gains by avoiding the need for a congressional renewal every few years. Additionally, a free-trade accord would offer reciprocity for the first time, granting U.S. companies, which must pay tariffs on their exports to Colombia, the same duty-free status with the United States that most Colombian exporters enjoy.

"I honestly can't understand the economic argument against the deal," said Eduardo Herrera, president of Supertex, a leading Colombian apparel exporter in Cali. "The U.S. is helping us solve our own problems with narco-trafficking and violence by helping us create legitimate jobs through trade preferences. Now we're saying, 'Let's make that permanent, and we'll open our market to you as well.' Why wouldn't they want that?"

Congressional opposition has confronted the administration with a dilemma. If it forces a vote on Colombia in the current climate, it could score the first defeat in modern history of a successfully negotiated U.S. trade deal. But if it does not try, analysts say it risks sending a message overseas that America's doors to trade are temporarily closed.

U.S. Trade Representative Susan C. Schwab argued this week for moving ahead with a vote. Though she would not offer a timeline, some administration officials have called for that to happen no later than this spring. "Right now, free-trade agreements are being negotiated all over the world without us," she said. "Sitting on our hands is not going to make the U.S. more competitive. It is not going to create one single solitary job."

Timelines are even less certain for accords with Panama and South Korea. A vote on Panama is not likely until at least after the expected departure in September of its National Assembly president, who was charged in the United States with killing a U.S. serviceman. The Korean deal, meanwhile, is almost certain not to move to a vote until Seoul lifts a four-year-old ban on U.S. beef stemming from the 2003 mad cow scare in Washington state.

But given the opposition to the agreements, both are likely to remain on ice until at least after the U.S. elections in November.