U.S. free trade accords face rocky road

With elections and economic woes, congressional approval of foreign trade accords will be an uphill battle.

A fresh battle is brewing in Washington over foreign trade, with the White House persevering in its pursuit of free trade agreements while congressional Democrats – some elected two years ago on protectionist planks – appear more inclined to take up trade issues with China than pass new deals.

President Bush is ramping up efforts to get Congressional approval of free-trade agreements (FTAs) already negotiated with Colombia, Panama, and South Korea.

Late last month, he dispatched Secretary of State Condoleezza Rice to Colombia, with a bevy of House Democrats in tow, to renew the push for the Colombia accord, invoking national security interests over economic ones for the agreement.

But with January producing gloomy employment figures and with Democratic House and Senate freshmen looking to toughen trade rules that they can then take to voters in November, the road to any FTA approval appears steep at best.

"We need to call a time out on passage of any more trade agreements," says Tim Schlittner, an aide to US Rep. Phil Hare (D-Ill).

Describing Mr. Hare's western Illinois district of farmland and small manufacturing as "ground zero for the negative effects of those deals," he says Hare and other members of the House Trade Working Group want to see improved trade adjustment assistance to workers and action on China trade issues before any new free-trade agreements are considered by Congress.

Yet even as some Congress members raise red flags over free trade's negative impact on US workers – and in some cases, consumers – pro-trade forces warn that a failure to ratify negotiated agreements would alarm US partners.

It could also send new shivers through the global economy, they add – by suggesting, for example, that current multilateral trade negotiations may be doomed.

"We'll either decide we're still going on the path towards openness, or to reject them [the pending FTAs] will be a very strong signal the US is turning its back on the world," says Phillip Levy, an international trade expert at the American Enterprise Institute in Washington and a recent senior trade economist on the President's Council of Economic Advisers.

A case in point is Colombia. US officials emphasize Colombia as a "partner" in the war on drugs and as a strengthening democracy deserving continued US support, rather than as a trade partner.

Noting that Colombian goods already flow freely to the US under the Andean trade promotion agreement, they say any economic impact is likely to be in the US's favor, since American goods would enter Colombia freely under an FTA.

But Congressional rejection of the FTA, they add, would send a stark signal that the US is no longer interested in the stability of a country the US has assisted with $5 billion in counter-narcotics, military, and development assistance since 2000.

The US also holds up Colombia as a staunch friend in an increasingly problematic region, and some Democrats accompanying Secretary Rice last month said the growing hostility of next-door neighbor Venezuela's president Hugo Chávez could cause them to consider an FTA with Colombia more favorably.

"If they manage to push this one through, it will be the politics they're voting on," says Sidney Weintraub, an economist and international trade expert at the Center for Strategic and International Studies in Washington. The administration, he adds, "is really pressing hard with this argument that after spending all this money it's not the moment to turn our back on our friends."

The administration did manage to get an FTA with Peru passed last December, prompting some free-trade advocates to conclude that the votes are also there, with a little arm-twisting, for the three pending agreements. But particular problems beset each agreement: for South Korea, it's auto exports and US beef imports; for Panama, the sticking point is the election last year to the national assembly of a man wanted by the US for the 1992 murder of an American soldier.

With Colombia, what sticks in the Democrats' gullet is the alarming number of murders of labor union leaders –the highest such in the world, say labor advocates. The AFL-CIO dropped its opposition to the Peru FTA after its labor and environmental elements were strengthened, Congressional aides note, but no one expects US labor to go soft on Colombia.

Others say the reluctance to send that signal – of a US turning its back on the world – in particular on neighbors in the Western hemisphere might yet salvage the Colombia agreement. But it will take a pointed effort by Colombia, they add.

If Colombian president Alvaro Uribe were to come out strong on the labor issue, says Mr. Weintraub, "he might get enough Democratic votes in Congress to get this through."

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