Peru Up Next on Free-Trade Agenda

Posted October 22, 2007 at 6:37pm

Democratic leaders and the Bush administration are each taking steps to smooth the way toward the first contentious votes on politically volatile free-trade pacts, with Democrats seeking to bolster programs for displaced workers and the administration gearing up for a major lobbying campaign.

A pact reached between the White House and Democrats in May to add union and environmental protections to trade agreements is the foundation for optimism on the part of free-trade advocates who hope to see four agreements approved in the coming year: Peru, Colombia, Panama and South Korea.

Peru is likely to pass easily next month, with labor largely muted, if not exactly praising the pact, while big fights loom on Colombia and especially South Korea. Panama has issues of its own, with the newly elected president of its National Assembly, Pedro Miguel González-Pinzón, indicted in the United States in the murder of a U.S. soldier.

The trade issue, expected to be discussed during the Democrats’ weekly Caucus meeting today, is perhaps the biggest area where Democrats and the administration have been able to work together. But how long that detente can last is unclear, with the two sides warring on other issues.

Democrats will take a concrete step toward moving the free-trade agenda forward on Wednesday when House Ways and Means Chairman Charlie Rangel (D-N.Y.) will mark up an expansion of trade assistance laws — designed to aid workers displaced by trade — with retraining and other benefits.

Rangel’s draft would broadly expand eligibility for the program, adding service workers for the first time while also providing important political cover for Democrats worried about casting difficult pro-free-trade votes later.

Speaker Nancy Pelosi (D-Calif.), in a nod to the complicated political environment on trade in her Caucus, has promised Democrats that the trade assistance bill will move before any trade agreements come to the floor.

Under fast-track authority, Peru should come to the floor in November.

“There is very strong support certainly on the committee and growing support for the Peru agreement across the Caucus,” said a Democratic Ways and Means aide. “There’s no question that the text of the Peru agreement is not the text of NAFTA or CAFTA,” both of which had major Democratic opposition because of a perceived lack of environmental and labor protections.

Bush has yet to send up the other agreements, but the administration has said it would like to see them approved in the order that they were negotiated, with Colombia next in line.

Union groups have been waging a major battle against Colombia largely because of their concern with a poor track record of prosecuting murders of union leaders. And they fear that any steps taken by the Colombian government to get the agreement passed will disappear once Congress agrees to a permanent free-trade deal, a union lobbyist said on condition of anonymity.

But the Bush administration has noted the billions that U.S. taxpayers already have poured into the country to fight drugs and for development and says the country is moving in the right direction and deserves permanent free-trade status. The country already benefits from free trade under temporary extensions of earlier trade deals, officials note.

Administration officials also are urging a diverse group of business and farm interests to score every trade vote, and they hope vulnerable Democrats in difficult districts will try to shore up their records with the business and farm communities by voting for free-trade agreements.

“We are utilizing all the tools available of the administration to calculate the benefits of these free-trade agreements throughout the entire country,” a senior administration official said Monday.

“Violence is down, terrorism is down, kidnappings are down. … The question is they are going in the right direction and would we want to punish a strong ally in the region at a time when they are clearly looking to do the right thing.”

The administration also sees the Colombia free-trade deal as a way to mitigate the regional influence of Venezuela President Hugo Chávez.

The Panama deal would be next in line and is a relatively minor agreement, but it is in serious trouble because of the election of a man wanted for the murder of a U.S. soldier 15 years ago in Panama City.

The big kahuna would come next year, when the South Korea deal comes to the floor. South Korea is a far bigger trading partner and faces major concerns over the access of U.S. beef exports to the Korean market as well as concerns from Ford and Chrysler over access to the Korean auto market.

But the pact also has major support from a broad range of big corporations, from bankers to lawyers to agricultural equipment makers.

Meanwhile, Rangel is working on legislation to pressure China to allow its currency to strengthen and to deal with issues of perceived dumping, an aide said. China’s enormous trade surplus, coupled with recent questions about product safety, have Democrats eyeing legislation that likely would be unifying for their Caucus and prove tough for Republican lawmakers to oppose in an election year.

The aide said a lot of Democrats who voted in 1999 to include China in the World Trade Organization don’t think the administration has done a good enough job.

“I don’t think the folks who took that vote are satisfied to the extent that the administration has followed through in holding China accountable,” the aide said.