Trade is one of the top items on Congress' agenda this spring.
On the forefront is the president's fast-track power to negotiate deals, known as trade promotion authority. Lawmakers will decide if they will renew that rule before it expires June 30.
In addition, Congress has four free trade agreements to review, including the one reached with South Korea on April 1. That deal would be the largest since the North American Free Trade Agreement with Canada and Mexico went into effect in 1994.
Under trade promotion authority, Congress can only approve or reject - not modify - those pacts. It has until June 30 to vote on the pending free trade deals and the trade promotion authority. Democrat leaders have vowed not to approve fast track unless the administration agrees to include labor and environmental protections in new agreements.
The House Ways and Means Committee released a March 27 statement calling on the U.S. Trade Representative Office to require countries ``to adopt, maintain and enforce basic international labor standards ... not merely `enforce their own laws,' '' in order to obtain bipartisan support in the House for both free trade agreements and fast-track authority.
What's more, several key congressional leaders already are voicing opposition to the South Korean agreement.
``It is an entirely unacceptable outcome,'' said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, in a statement. ``I will oppose the Korea Free Trade Agreement, and in fact I will not allow it to move through the Senate, unless and until Korea completely lifts its ban on U.S. beef.''
Likewise, Rep. Sander Levin, D-Mich., who chairs the trade subcommittee of the House Ways and Means Committee, said without changes, he would oppose the deal because it fails to ensure the ``elimination of the barriers'' that face U.S. automotive products. According to the plastics division of the American Chemistry Council, the average automobile uses 250 pounds of plastics.
Labor also is opposed. ``It is inexplicable that the Bush Administration would put forth a trade agreement with no enforceable protections for workers' rights when there is broad acknowledgement in Congress that trade agreements must uphold core workers' rights,'' said John Sweeney, president of the AFL-CIO. ``This deal only includes a weak provision that countries must enforce their own labors, not the International Labor Organization core labor standards.''
Compounding the situation, a strong faction of Democrats are opposed to any future trade deals, and a small group of Republicans are not sure current trade laws provide U.S. companies with enough protection against foreign competition.
``We have to strengthen our trade laws to further level the playing field for U.S. manufacturers and provide more effective remedies for U.S. workers, farmers and employers against unfairly traded imports and damaging increases in imports,'' said Rep. Phil English, R-Pa.
At stake in the political battle are previously negotiated trade deals with Panama, Peru and Colombia, as well as what U.S. trade policy will be going forward, at a time when there is concern over foreign competition and job losses to those countries.
Princeton University economist and former Federal Reserve Board Vice Chairman Alan Blinder has estimated as many as 40 million American jobs are at risk of being shipped out of the country in the next two decades if current policies continue.
The South Korea trade deal is the ``most commercially significant'' pact in more than 10 years, said U.S. Trade Representative Susan Schwab, as South Korea is the world's 10th-largest economy and the United States' seventh- largest trading partner.
Two-way trade in goods between the two countries carried an estimated value of $72 billion in 2006. USTR said the agreement is expected to increase that two-way trade by $19 billion - or 25 percent - and allow the U.S. to increase the current 11 percent share it has of the South Korean $300 billion import market. South Korean exports to the U.S. are expected to rise in the first year by 12 percent, or $5.4 billion, said USTR.
Under the pact, nearly 95 percent of bilateral trade in consumer and industrial products would become duty-free within three years after enactment, with remaining tariffs eliminated within 10 years.
``The agreement appears to provide higher standards of protection for U.S. investment in [South] Korea,'' said John Engler, president of the Washington-based National Association of Manufacturers.
The agreement would eliminate an 8 percent tariff on cars imported into South Korea as well as its tax system based on the engine size of imported cars, which U.S. automakers contend discriminates against their vehicles.
In 2006, South Korean manufacturers sold between 700,000 and 800,000 vehicles in the U.S. compared with 4,000-5,000 sold by U.S. automakers in South Korea.
