Trade Battle Looms for Democrats

Posted May 8, 2009 at 6:25pm

Correction Appended

While House Democratic leaders are scrambling to unify their Caucus on major energy and health care reforms, a smaller but explosive intraparty battle awaits as Congress girds for its first big trade fight under President Barack Obama.

Top Democrats are predicting the Panama free-trade agreement will come up for House consideration shortly, one of three pending trade deals left over from the Bush administration. Of those deals — the other two are Colombia and South Korea — Panama is the smallest and least controversial, and it could deliver Obama a big win on his first trade agenda item.

“We’re just waiting for the White House to bring it up here,— said one senior House Democratic aide. “Hopefully within the next few months. Maybe sooner than that.—

But an increasingly agitated faction of Democrats is warning party leaders of ugly economic and political consequences if they try to move the Panama agreement.

Not only will it hurt the economy, critics say, but action on a Bush-negotiated trade deal endangers freshman Democrats in 2010 since many ran on a trade reform agenda. In addition, critics say, it doesn’t bode well for Obama to anger a bloc of Democrats early on when he needs their support for his ambitious domestic agenda.

“I’m getting really pissed off,— said House Rules Chairwoman Louise Slaughter (D), who represents a region of New York that has suffered under the North American Free Trade Agreement. “Obama’s got to get a hell of a lot of stuff up through here, and to start out by bumming out about half of us doesn’t strike me as a wise move.—

Rep. Mike Michaud (D-Maine), co-chairman of the House Trade Working Group, singled out House Majority Leader Steny Hoyer (D-Md.) in his criticism of his party leaders’ desire to advance the Panama deal. The working group includes several prominent Members, including six committee chairmen and 17 subcommittee chairmen.

“As a Democratic leader, I don’t think it’s helpful to vulnerable Members to ask them to support a Bush-negotiated trade deal,— Michaud said. “As a Democratic leader, [Hoyer] should not be encouraging the White House to move forward on this.—

Critics of the Panama deal say their frustrations go beyond the tax, labor and environmental concerns often cited as sticking points. Instead, they say, the real issue is that Obama pledged during his presidential campaign to re-examine U.S. trade policy.

Panama itself “is not a big deal,— said one aide to a House Democrat opposed to the agreement. “It’s an opportunity to re-evaluate our cookie-cutter trade deals and then use that as a framework. … Panama sets the course for what future agreements look like.—

During a meeting last month with representatives from the Office of the U.S. Trade Representative, Slaughter spoke on behalf of about 20 Members in voicing concerns with the Panama deal. The USTR attendees seemed “receptive,— she said, but have not contacted her since the meeting.

“I carried on awful,— Slaughter said of the hourlong meeting. “We’re not just going to take all of this stuff lying down anymore.—

But beyond voting against the Panama agreement and clashing with their leaders, it’s unclear what Democratic opponents can really do.

Rep. Marcy Kaptur (D-Ohio), one of the Members who attended the USTR meeting, said Slaughter repeatedly reminded USTR officials that she chairs the powerful Rules Committee.

“She made it very clear that she didn’t intend to move any of those bills,— Kaptur said. “I hope it gets someone’s attention over at the White House.—

Slaughter acknowledged she is in a powerful position but downplayed the possibility that she may step up her role as Rules chairwoman to stall pending trade bills. “I’m not going to cross that bridge until I get on it,— she said.

Despite the intraparty protests and a jam-packed legislative agenda, top Democrats appear intent on moving forward on the issue.

House Ways and Means Chairman Charlie Rangel (D-N.Y.) said it wouldn’t interfere with his committee’s busy schedule to push through the Panama agreement.

“For a trade bill that’s already been negotiated, it wouldn’t take a whole lot of time to deal with that,— Rangel said. “We would have no problem with that.—

Rangel said he is not concerned “at all— about a lack of Democratic votes to pass the agreement. Some Members will oppose all trade agreements no matter what their benefits, he said, because of reasons “more related to a particular Congressional district.—

Still, Rangel said, Democratic leaders need to make sure they can pass the trade deal with a strong vote “before we embarrass ourselves and the president. … We’ve got to get the votes.—

At least one bloc of Democrats is already prepared to vote for the agreement: the pro-business New Democrat Coalition, which last week sent a letter to Obama praising recent positive statements coming from the administration about moving forward on Panama.

While many Members have concerns about Panama being a tax haven, resolving that problem “shouldn’t necessarily be a pre-condition for moving— on the trade deal since the Treasury Department can take action on that issue later, said an aide to a prominent New Democrat.

Unlike the previous administration, “There is now an element there that we do trust this administration on the enforcement side of things,— said the aide.

Correction: May 12, 2009

The article incorrectly stated that the Panama free-trade agreement does not contain fast-track authority. In fact, the agreement does have fast-track authority.