Passage of high-stakes US trade deals likely in 2008
Sunday, 16 March 2008
Andrzej Zwaniecki
CHANCES for congressional approval of three high-stakes U.S. bilateral trade agreements will improve once lawmakers focus on the strong strategic and commercial merits of the pacts, according to an independent expert.
Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, said he does not expect the Bush administration to submit free trade pacts with Colombia, Panama and South Korea to Congress for approval, nor does he expect congressional leaders to bring them up for a vote, until both sides can focus on trade.
A focus on trade may happen when the Democratic and Republican parties get closer to settling on their presidential candidates and Congress passes an economic stimulus package.
Senator Max Baucus, chairman of the Senate Finance Committee, which has jurisdiction over trade issues, said January 30 that he cannot consider moving the three agreements until a strengthened and expanded Trade Adjustment Assistance (TAA) programme for helping workers affected by foreign competition is in place. Baucus, a Democrat from Montana, said his committee will consider TAA reform legislation soon.
Although research shows that the U.S. economy has benefited greatly from international trade and that U.S. manufacturing job losses are mostly related to technological changes, many U.S. workers remain skeptical about the benefits of trade and tend to blame it for what they see as job insecurity and stagnant wages.
Baucus said U.S. trade policy must shift away from the "singular focus on trade agreements" toward a more comprehensive approach, which aims at ensuring certainty and fairness for American workers.
Senator Hillary Clinton and other leading Democratic presidential candidates have expressed doubts about the effects of trade agreements on the U.S. economy.
Winning congressional passage of the three deals is at the center of the administration's trade agenda for 2008 because they concern U.S. strategic interests.
At the U.S. Chamber of Commerce last January, U.S, Trade Representative Susan Schwab argued passionately for the commercial and geopolitical values of the US-Colombia agreement, which is the first of the three pacts that the administration intends to submit to Congress.
Some Democratic lawmakers want to delay the vote until Colombia does more to reduce violence against labour leaders.
But Schwab said that nothing is going to change in the foreseeable future that would make the pact any more compelling than it is now. Colombia under President Alvaro Uribe has been transformed and has made remarkable progress in curtailing violence and fighting drug trafficking, she said.
Hufbauer said that outright rejection of the deal or even an indefinite delay would be seen as an indication of how the United States treats its best allies in the hemisphere.
"It would be trumpeted loud by U.S. adversaries in the region," he said.
President Bush, in his January 28 State of the Union address, said: "We must ... show our neighbours in the region that democracy leads to a better life."
Schwab suggested the agreement with South Korea, the most commercially significant of the three, has potential to boost the U.S. position and those of U.S. allies in Asia, where dozens of preferential bilateral and regional deals are being negotiated that exclude the United States.
She said, however, that the agreement will be submitted to Congress only when South Korea agrees to fully reopen its market to U.S. beef.
"The rest of Asia is watching developments on this agreement closely," Schwab said. Hufbauer said that a "more sober and reflective Congress will take all that into account."
As to the U.S.-Panama agreement, congressional leaders said they cannot act until the issue related to the president of Panama's National Assembly, Pedro Miguel Gonzalez Pinzon, is resolved. Pinzon is wanted in the United States on murder charges.
Trade issues and the next U.S. president: Hufbauer said that, regardless of whether Congress approves the three trade agreements, he expects the next president to rethink the U.S. trade policy.
The next administration, for example, may try to pursue free trade deals with some of its biggest trading partners, such as the European Union (EU) and Japan, which do not have major social problems, he said. Or it may decide to negotiate agreements that cover only services, which make up much of the U.S. economy.
Former U.S. Trade Representative Mickey Kantor indicated at the U.S. Chamber of Commerce that the next president is likely to take a fresh look at trade in the context of economic competitiveness.
...........................................................
By courtesy: The US Embassy in Dhaka
CHANCES for congressional approval of three high-stakes U.S. bilateral trade agreements will improve once lawmakers focus on the strong strategic and commercial merits of the pacts, according to an independent expert.
Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, said he does not expect the Bush administration to submit free trade pacts with Colombia, Panama and South Korea to Congress for approval, nor does he expect congressional leaders to bring them up for a vote, until both sides can focus on trade.
A focus on trade may happen when the Democratic and Republican parties get closer to settling on their presidential candidates and Congress passes an economic stimulus package.
Senator Max Baucus, chairman of the Senate Finance Committee, which has jurisdiction over trade issues, said January 30 that he cannot consider moving the three agreements until a strengthened and expanded Trade Adjustment Assistance (TAA) programme for helping workers affected by foreign competition is in place. Baucus, a Democrat from Montana, said his committee will consider TAA reform legislation soon.
Although research shows that the U.S. economy has benefited greatly from international trade and that U.S. manufacturing job losses are mostly related to technological changes, many U.S. workers remain skeptical about the benefits of trade and tend to blame it for what they see as job insecurity and stagnant wages.
Baucus said U.S. trade policy must shift away from the "singular focus on trade agreements" toward a more comprehensive approach, which aims at ensuring certainty and fairness for American workers.
Senator Hillary Clinton and other leading Democratic presidential candidates have expressed doubts about the effects of trade agreements on the U.S. economy.
Winning congressional passage of the three deals is at the center of the administration's trade agenda for 2008 because they concern U.S. strategic interests.
At the U.S. Chamber of Commerce last January, U.S, Trade Representative Susan Schwab argued passionately for the commercial and geopolitical values of the US-Colombia agreement, which is the first of the three pacts that the administration intends to submit to Congress.
Some Democratic lawmakers want to delay the vote until Colombia does more to reduce violence against labour leaders.
But Schwab said that nothing is going to change in the foreseeable future that would make the pact any more compelling than it is now. Colombia under President Alvaro Uribe has been transformed and has made remarkable progress in curtailing violence and fighting drug trafficking, she said.
Hufbauer said that outright rejection of the deal or even an indefinite delay would be seen as an indication of how the United States treats its best allies in the hemisphere.
"It would be trumpeted loud by U.S. adversaries in the region," he said.
President Bush, in his January 28 State of the Union address, said: "We must ... show our neighbours in the region that democracy leads to a better life."
Schwab suggested the agreement with South Korea, the most commercially significant of the three, has potential to boost the U.S. position and those of U.S. allies in Asia, where dozens of preferential bilateral and regional deals are being negotiated that exclude the United States.
She said, however, that the agreement will be submitted to Congress only when South Korea agrees to fully reopen its market to U.S. beef.
"The rest of Asia is watching developments on this agreement closely," Schwab said. Hufbauer said that a "more sober and reflective Congress will take all that into account."
As to the U.S.-Panama agreement, congressional leaders said they cannot act until the issue related to the president of Panama's National Assembly, Pedro Miguel Gonzalez Pinzon, is resolved. Pinzon is wanted in the United States on murder charges.
Trade issues and the next U.S. president: Hufbauer said that, regardless of whether Congress approves the three trade agreements, he expects the next president to rethink the U.S. trade policy.
The next administration, for example, may try to pursue free trade deals with some of its biggest trading partners, such as the European Union (EU) and Japan, which do not have major social problems, he said. Or it may decide to negotiate agreements that cover only services, which make up much of the U.S. economy.
Former U.S. Trade Representative Mickey Kantor indicated at the U.S. Chamber of Commerce that the next president is likely to take a fresh look at trade in the context of economic competitiveness.
...........................................................
By courtesy: The US Embassy in Dhaka