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July 09, 2007 02:00 AM

Bush trade authority sidelined

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    The president's authority to negotiate fast-track free trade agreements recently expired and is unlikely to be renewed before President George W. Bush leaves office.

    That power - known as Trade Promotion Authority - expired June 30 when Congress failed to renew it. At the same time, the four trade leaders in the House - Speaker Nancy Pelosi, D-Calif.; Majority Leader Steny Hoyer, D-Md.; Ways and Means Committee Chairman Charles Rangel, D-N.Y. and Rep. Sander Levin, D-Mich. - issued a joint statement that their ``legislative priorities do not include the renewal of fast-track authority.''

    The statement also said they could not support two of the four FTAs that have been negotiated and signed and are awaiting congressional approval - including a key pact with South Korea, the world's 10th-largest economy and the U.S.'s seventh-largest trading partner. They also said they could not support a pact with Colombia because they were concerned with the level of violence and corruption in that country.

    The prospects for renewal of the TPA at any time in the near future are ``very grim,'' said Christopher Wenk, senior director of international policy for the U.S. Chamber of Commerce in Washington. ``There are a lot of challenges,'' Wenk said in a telephone interview.

    The biggest obstacle is the view of Bush as a ``lame-duck president,'' even with 18 months left in his term.

    ``Without TPA, our competitors will negotiate agreements without us, putting American manufacturers at a disadvantage,'' said Doug Goudie, director of international trade policy for the National Association of Manufacturers in Washington. ``It is a heck of a time for the U.S. to give trade the silent treatment.''

    Without TPA, which gives the president the ability to negotiate deals that Congress can only approve or reject but not modify, ``the U.S. is going to return to the sidelines after being on the offensive since 2002,'' said Wenk. In that time, the U.S. approved 10 FTAs.

    ``It is really going to have some devastating consequences,'' said Wenk. ``The U.S. is not going to be able to stay on the offensive and knock down trade barriers.'' About 190 regional trade agreements were negotiated between 1995 and 2001 - the last time TPA lapsed, according to the Office of the U.S. Trade Representative.

    The South Korea trade deal would be the largest since the North American Free Trade Agreement with Canada and Mexico went into effect in 1994.

    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.

    In a June 21 letter to the U.S. International Trade Commission, Neil Pratt, senior director of international trade and trade counsel for the Society of the Plastics Industry Inc. in Washington, said that in 2006, U.S. plastics exports to South Korea increased by 15.1 percent to almost $1.02 billion and imports to the U.S. increased just 3.1 percent to almost $1.1 billion.

    Pratt said that trimmed the plastics industry trade deficit with South Korea from about $179 million in 2005 to less than $79 million in 2006.

    ``The FTA with [South] Korea offers significant potential for the plastics industry,'' Pratt said. ``Even if exports to Korea remained steady, the tariff savings after full implementation of the FTA would exceed $67 million'' annually, based on 2006 export levels.

    However, the four congressional leaders said they could not support the South Korea pact as negotiated because of its failure to address the issue of nontariff barriers to imports - particularly as they relate to the automotive sector.

    In 2006, South Korea exported more than 700,000 cars to the U.S., while the U.S. exported fewer than 5,000 to South Korea.

    ``These numbers illustrate deep-seated and fundamental problems in market access and a heavily one-sided trading relationship that can be expected only to undercut support for the agreement far beyond the automotive sector,'' said the congressional trade leaders' statement.

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