The chilly reception U.S. trade representative Susan Schwab received in House and Senate trade policy hearings indicates a growing contention over the president's authority to negotiate free trade agreements.
``We need to see that you care more about the American people, and that you are not just helping American multinationals who operate worldwide get good deals,'' Sen. Max Baucus, D-Mont. - and Finance Committee chairman - told Schwab at a committee meeting Feb. 15.
The presidential Trade Promotion Authority is set to expire June 30. The administration, manufacturers and the plastics industry all have argued that it is critical to renew TPA - the fast-track authority under which international free trade agreements are subject to an up-or-down vote, but not amendment, in Congress. More than 40 percent of U.S. exports go to countries where there are FTAs in use.
``We have a huge stake in TPA renewal as manufactured goods are two-thirds of America's total exports,'' said John Engler, president of the National Association of Manufacturers of Washington.
NAM joined with a slew of business associations and firms Feb. 12 to form an umbrella group advocating the renewal of TPA, called Trade for America.
``TPA is the key to negotiating,'' Engler said. ``Other countries will not negotiate with us if they have to negotiate once with the administration and then a second time with Congress.''
Schwab agreed. ``We are going to lose ground going forward if we don't have TPA,'' she said. ``If the U.S. walks off the negotiating field, other countries will negotiate deals and exclude the U.S.''
Baucus did not disagree. But he added that while the U.S. ``must seize the opportunity to renew fast-track,'' it also must seize the opportunity to rethink it, ``to ensure that we pursue commercial significant agreements and that our trade agreements raise labor and environ- mental standards.''
The Senate Finance Committee chairman interrupted Schwab and scolded her and the U.S. trade team when she attempted to defend the administration's trade enforcement efforts regarding FTAs, including its work with Congress on them. Schwab said that FTAs have improved labor conditions in the countries where they have been enacted and have benefited U.S. workers.
Baucus told Schwab that she was skirting his questions on what the administration was doing to enforce existing laws more aggressively, incorporate labor standard improvements into FTAs, and expand trade adjustment assistance for workers negatively affected by trade.
``These are things the administration must do to get trade promotion authority renewed,'' he said.
``The communication is not what it should be,'' Baucus said. ``That is why we are thinking of changing the fast-track authority to require more participation by Congress.'' That includes setting priorities for what countries should be targets for negotiation.
``Many in Congress have felt left out of the trade policy process and feel that they are not listened to,'' he said. ``Congress must feel it is consulted before and during the process.''
U.S. Rep. Sander Levin, D-Mich., who chairs the trade subcommittee of the House Ways & Means Committee, agreed. ``The administration must demonstrate quickly that they will use present trade promotion authority well to make necessary changes in free-trade agreements with Peru, Panama and Colombia; in negotiations with [South] Korea; and in our bilateral trading relationships with China, Japan and other nations.''
He said the administration should modify pending agreements with Peru, Panama and Colombia to incorporate enforceable international labor standards.
The hearing also underscored the widening gap between how the new Democratic leaders and the administration perceive FTAs and their benefits.
Schwab produced statistics that U.S. exports to the 10 countries where FTAs have been implemented since 2001 were growing twice as much as exports to the rest of the world. She also maintained that fewer than 3 percent of the U.S. workforce had been negatively affected by FTAs and that 90 percent of the trade deficit was petroleum-based.
But Sen. Debbie Stabenow, D-Mich., said the trade office and the administration ``had crafted too narrow of a definition for those negatively impacted by trade.'' Stabenow said that 1.5 million jobs had been lost due to currency manipulations and 200,000 jobs had been lost as a result of the $12 billion counterfeit parts and product market.