The Bush administration still faces big hurdles to renewing its “fast track” trade negotiating authority despite a deal with top Democrats in Congress on labor and environmental issues, analysts said.
The deal struck recently in House Speaker Nancy Pelosi’s office fulfills a longtime Democratic demand to put enforceable labor and environmental provisions into the core text of free trade agreement on equal footing with commercial provisions.
But with the war in Iraq dragging on and campaigning under way for the 2008 presidential election, Democrats are reluctant to give President George W. Bush any legislative victories—even if a fast track extension is needed to conclude the Doha round of world trade talks which are now in their sixth year.
The authority, which expires at the end of June, has been an important White House tool for cutting trade deals for over three decades. But doubts about its renewal increased after Democrats captured control of Congress last year.
“It doesn’t look like there’s a sense of real urgency (in Congress) about extending fast track,” said Sherman Katz, trade scholar at the Carnegie Endowment for International Peace. “It could very well lapse before it’s renewed again.”
Fast track—also known as trade promotion authority—allows the White House to negotiate trade deals that Congress must approve or reject without making changes.
Opponents say the resulting agreements drive jobs overseas and threaten the environment, while supporters see the pacts as important tools for boosting trade, protecting US overseas investment and promoting foreign economic development.
Last week’s deal applies immediately to trade pacts with Peru, Panama, Colombia and South Korea. If the countries agree to the changes, they could face US trade sanctions if they violate the labor and environmental provisions.
That’s a big turnaround for Bush, who incensed many Democrats in 2001 when he denounced pressure for stronger labor and environmental terms as an effort by “protectionists and isolationists” to block free trade.
Bush’s concession brought him a step closer to winning renewal of trade promotion authority, said Ed Gresser, trade director for the Progressive Policy Institute.
But he said many lawmakers were unimpressed with the relatively small trade agreements the Bush administration has racked up since winning trade promotion authority in 2002.
Those include deals with Australia, Morocco, Bahrain, Oman, five Central American countries and the Dominican Republic, as well as a bigger one recently with South Korea.
Trade is a tough vote for Democrats from big union states like Ohio and Michigan, which have seen many manufacturing job move overseas. Many Democrats from northern agricultural states are also wary after facing increased competition from Canada under the North American Free Trade Agreement.
Gresser said the Bush administration needed a breakthrough in world trade talks, and probably progress on a range of trade problems with China, to make its case for renewal.
US Trade Representative Susan Schwab met with other trade ministers last week in Europe as part of last-ditch effort to salvage the Doha round. This week, the Bush administration will discuss trade and economic issues with senior Chinese officials.
One possibility is a limited fast track extension to finish the Doha round, with a decision on farther-reaching authority delayed until after the November, 2008 presidential elections.
Republican hopefuls including Sen. John McCain and former Massachusetts Gov. Mitt Romney strongly favor renewal of a comprehensive trade promotion authority bill.
But many Democratic prospects, including Sen. Barack Obama and former Sen. John Edwards, want fast track authority rewritten to require the White House to negotiate stronger labor and environmental provisions. (Reuters)