Not-quite-historic trade bills
Congress and the Bush administration have achieved a potentially historic bipartisan breakthrough in U.S. trade policy. The operative phrase is “potentially historic.” In the very near term, the compromises two weeks ago involving labor and environmental standards will affect only relatively minor bilateral free trade agreements (FTAs) with Peru and Panama. However, U.S. Trade Representative Susan C. Schwab, who played a crucial role in the congressional negotiations and who will now conduct final rounds of trade negotiations with Colombia and South Korea, confidently declared that “the bipartisan consensus” would provide “a clear and reasonable path forward for congressional consideration” of FTAs with Colombia and South Korea as well. She expressed further optimism that the “new trade policy template also opens the way for bipartisan work on Trade Promotion Authority” (TPA). Formerly known as fast-track authority, President Bush’s TPA expires at the end of June. Extension of TPA will be essential to reach final agreement in the much more expansive, much more difficult multilateral trade negotiations presently taking place in the Doha round. Under TPA, Congress cannot amend trade agreements; it can only approve (by simple majorities in both chambers) or reject them.
Under the new agreement, internationally recognized, enforceable labor and environmental standards will be added to each of these four bilateral FTAs before Congress considers them. The labor standards (e.g., right of workers to bargain collectively, the elimination of forced labor and the effective abolition of child labor) are derived from the 1998 International Labor Organization declaration, which the United States has approved. The environmental standards include seven common major multilateral environment agreements, with which the United States complies.
Since the 1993 fight over the North American Free Trade Agreement (NAFTA), Democrats have battled — unsuccessfully until now — to incorporate binding labor and environmental standards within trade agreements. Moreover, the bipartisan consensus on trade has bro- ken down since NAFTA, which garnered 102 House Democratic votes and passed 234-200 and 27 Senate Democratic votes to pass 61-38. In 2005, the Republicancontrolled Congress much more narrowly passed (217-215 in the House; 54-45 in the Senate) the ostensibly far less controversial Central American Free Trade Agreement, which received the support of only 15 of 202 Democratic representatives and 10 of 43 Democratic senators.
So, when Democrats recaptured both chambers last year, bringing dozens of trade-skeptical Democrats to Washington, the writing was on the wall. In exchange for incorporating labor and environmental standards within FTAs, we would have much preferred that the president’s TPA be extended and that all four bilateral trade agreements be quickly approved in bipartisan votes. But that wasn’t what the Democratic leadership was offering when negotiating from a much stronger position. For last week’s breakthrough to be truly historic, it will have to lead to a congressionally approved multilateral Doha agreement.