Why Congress is now ready to OK three long-stalled trade agreements
The House and Senate are poised Wednesday to approve three trade agreements, crafted during the Bush administration, with South Korea, Panama, and Colombia. They'll be the first big trade pacts since NAFTA in 1993.
The pact with South Korea would be the most significant US trade deal since the North American Free Trade Agreement (NAFTA) in 1993, signed with Canada and Mexico. South Korean President Lee Myung-bak will speak to a joint session of Congress Thursday, and the event is expected to be warm and celebratory, given the expected House and Senate passage of the three trade deals.
So, why did it take more than five years to get an outcome that is now barely contested?
Trade deals are a wild card in American politics. They are game changers for whole sectors of the economy – creating new markets for some and insurmountable problems for others. President Obama says the three pacts could increase US exports by at least $13 billion.
But politicians, recalling the public backlash to NAFTA, have also been wary that the American public could take a dim view of new trade agreements, which can have a devastating effect on whole regions, just as the 2012 election is ramping up.
Deep divisions on "free trade" exist within the same party, as speakers in Wednesday's debate made clear. “These are very difficult issues for members of this body to undertake,” said Rep. Richard Neal (D) of Massachusetts, who represents a district that has 26,000 export-related jobs and supports the trade legislation.
Opposing the trade pacts, Rep. Marcy Kaptur (D) of Ohio, who represents a region hard-hit by the loss of manufacturing jobs, said: “Sure, we sell more pork chops, but we have half-a-trillion-dollar trade deficits and millions of job losses.”
In a forthcoming Gallup poll, only 1 percent of Americans mention free trade as the most important problem facing the country. But in an open-ended question on “what would be the most important thing to do to create more jobs in the US,” the No. 1 answer, cited by 19 percent of respondents, was “keep manufacturing here.”
“About a quarter of Americans spontaneously mention things having to do with trade,” says Frank Newport, editor in chief of the Gallup poll. “It’s clearly conscious in the minds of Americans. People might be sympathetic to trade agreements if you can convince them that it will help with jobs.”
It’s no coincidence that the Senate has opted to take up the trade deals just 24 hours after a contentious vote on slapping trade sanctions on China for artificially lowering the price of its exports via currency manipulation. That bill, which alarmed free-trade advocates, passed 63 to 35, but it is unlikely get a vote in the House. Still, it sends a message that many in Congress are concerned about the impact of liberalized trade on American jobs.
All three deals were negotiated in the George W. Bush administration, but momentum stalled with the loss of a GOP majority in the House in 2007. The new Democratic House majority, with close ties to trade unions, was wary of the impact of free-trade agreements on jobs, the environment, and worker rights. Democrats called the trade deals “job killers” and demanded that they be renegotiated to take into account those concerns.
Inheriting the controversy in 2009, President Obama was reluctant to cross the unions that helped to elect him. Pressed by a powerful free-trade lobby, Mr. Obama took up calls to renegotiate the trade bills in 2009, adding protections for workers and the environment. But most unions still opposed the trade deals, especially the pact with Colombia, where workers’ rights are frequently violated.
Democrats pushed for a sweetener in the form of dedicated funding for training programs to help workers displaced as a result of lower trade barriers. Along with the three trade deals, Congress is expected to vote for a $575 million package over the next two years help ensure that workers can find or keep jobs after new trade agreements take effect. These changes and additions have been enough, apparently, to win sufficient Democratic support to carry the trade deals.
Most House Republicans, however, are expected to oppose that Trade Adjustment Assistance (TAA) program, as an example of yet more government spending that they say doesn't actually solve problems. But the GOP leadership is on record in favor of it.
“If you look at what [Way and Means Committee] Chairman [Dave] Camp was able to manage in terms of the TAA bill, there is significant reform inside the bill, and it is consistent with the necessary bipartisan support for passage of the trade bills,” said House majority leader Eric Cantor of Virginia, in a briefing on Tuesday. “I think it demonstrates that we are willing to do the things necessary to get some of these bills done.”