By the time South Korea’s President Lee Myung-bak arrives at the White House for a state dinner honoring him next Thursday, President Obama will be able to present him with a ratified US-Korea free trade agreement.
That’s the prediction of White House Chief of Staff William Daley, who confidently told a Washington audience of business leaders and diplomats Wednesday night that Congress will approve a package of three free-trade deals and domestic trade-impact legislation by the middle of next week.
Mr. Daley told guests at the National Foreign Trade Council’s annual black-tie dinner that the four-part trade package – free trade deals with South Korea, Colombia, and Panama, plus legislation that renews funding for retraining workers who lose jobs to foreign competition – will move “across the finish line” next Wednesday.
If he’s right, it will be uncharacteristically quick work for Washington, and will constitute a striking turnaround for trade deals that have languished for years.
One incentive for the Obama administration to get quick passage of the trade package is President Lee’s state visit. The Korea deal is the largest US trade pact since the landmark NAFTA (the North American Free Trade Agreement) accord with Canada and Mexico. It is expected to generate about $11 billion of the total $13 billion in new US exports the administration says the three free-trade agreements (FTAs) will deliver. Obama, who fine-tuned the South Korea trade deal originally negotiated under President George W. Bush, did not want to greet his White House guest empty-handed.
Another incentive is that Obama made implementation of the three FTAs part of his jobs bill now before Congress. Daley called the four-part trade package an “essential part of the president’s jobs agenda,” and predicted that the Korea deal alone will “support” 70,000 US jobs and open up markets to allow for creating thousands of new jobs.
Outside of government, business and labor organizations disagree on the jobs impact of the three pending FTAs. The US Chamber of Commerce predicts the deals will prevent hundreds of thousands of job losses by keeping exporting companies humming, while the AFL-CIO says the pacts spell doom for more than 150,000 jobs.
Daley, who helped the Clinton administration usher NAFTA through Congress in 1993, described Obama as coming down in the middle of the polar views on trade’s impact. On one hand, the president believes that trade agreements create jobs, but on the other he realizes that “there are people who are negatively hurt by trade,” Daley said.
He said that explains Obama’s insistence that renewed funding for Trade Adjustment Assistance, the program that enables worker retraining, accompany the three trade deals.
Going a step further, Daley also warned his audience of mostly pro-trade business representatives that this kind of “balanced” approach to trade will be necessary if the American public is to be convinced that more trade liberalization is in the national interest. For example, the administration is currently pursuing a huge Pacifc-region trade agreement.
“We’ve got to reach out to people who are negatively affected, especially at this crisis time,” Daley said. “If we don’t continue to build a consensus, these [trade] fights will get more and more difficult.”