Sides get closer to a deal on trade
Washington Post | 10 May 2007
Sides Get Closer to A Deal On Trade
Democrats Win Labor Concession, Sources Say
By Peter S. Goodman
Washington Post Staff Writer
The Bush administration and Democratic leaders have struck a compromise that would insert stricter labor rules into future trade treaties, potentially lending fresh momentum to the global effort to promote free trade, sources briefed on the talks said yesterday.
The agreement would remove the primary obstacle to congressional approval of pending trade deals with Peru and Panama, while enhancing prospects for a more controversial agreement with Colombia, the sources said. It generates momentum for the possible revival of the long-stalled Doha round of trade talks, aimed at aiding poor countries by rolling back tariffs worldwide.
Two sources who described the compromise would speak only on condition of anonymity because it has not been approved at the White House or publicly disclosed. They cautioned that the agreement negotiated in recent days between U.S. Trade Representative Susan C. Schwab and Rep. Charles B. Rangel (D-N.Y.), chairman of the House Ways and Means Committee, could still unravel, with many outstanding issues left to be resolved. Labor unions have not yet reviewed the terms, the sources said, and the deal does not have President Bush’s final blessing.
Under the plan, the trade deals signed with Peru, Panama and Colombia would have to be renegotiated with their governments before they can be revised and submitted to Congress for a vote, raising the possibility they could be killed by opposition in those countries.
But sources familiar with the negotiations said the agreement sharply increases the prospects that the deals will be approved.
The compromise has been engineered to deliver substantive benefits and political cover to key interest groups. Democrats and labor would get standards barring forced labor and child labor in other countries, while elevating the rights of workers to organize unions. American industry would gain assurances that such provisions would not influence U.S. laws. The Bush administration, under fire at home and abroad for the war in Iraq, could claim a legacy of expanding a decades-old American mission to increase world trade.
One source briefed on the talks said the administration hopes to use the compromise language to conclude deals with Panama and Peru, then apply it as a template for subsequent pacts with Colombia and South Korea, and in the pursuit of a breakthrough in the Doha talks.
"We continue to have productive discussions with the Congress and remain optimistic that we can get an agreement that will create a new bipartisan majority in the Congress for the pending free trade agreements," Schwab said through a spokesman last night.
But significant impediments confront the deals. Democrats and administration officials alike say the South Korea pact is inadequate because it does not sufficiently open the country to U.S. cars and meat. The Colombia deal is the hardest sell on Capitol Hill, because labor union members are frequently murdered in that country. One source said the administration still hopes to win Democrats and labor with provisions to significantly strengthen Colombia’s laws.
The compromise does not apply to the president’s quest for an extension of his so-called fast-track authority — his right to negotiate trade pacts and submit them to Congress for simple up-or-down votes, without amendments. His authority expires at the end of June. Without an extension, the administration will be hamstrung in its efforts to jump-start the Doha talks. Democrats are reluctant to give an unpopular president new trade powers, particularly in a time of public disenchantment with globalization.
The deal would be the culmination of six months of negotiations between House leaders and the U.S. trade representative over a divisive issue: what rules should apply to labor when the United States expands commerce with a poor country.
In previous pacts negotiated by the Bush administration such as the Central America Free Trade Agreement, the only labor provision subject to enforcement requires that countries apply their own labor laws, even if those laws are weak.
In the compromise, Democrats would satisfy a long-standing demand. Provisions would be written into the text of the trade pacts requiring that trading partners "adopt, maintain and enforce in their own laws and in practice" the five core standards of the International Labor Organization, a body of the United Nations. Those standards bar forced labor, child labor and discrimination in the workplace, while protecting the rights of workers to organize unions and bargain collectively.
Just as important to Democrats is that when countries do not follow those standards, it would trigger the same enforcement mechanism that governs other areas of dispute, potentially resulting in punitive tariffs. Previous deals have simply obligated the government of an offending country to pay a fine.
Some Democrats have argued that previous trade deals have helped ship U.S. factory jobs to countries in which workers are exploited. They cast the new rules as redress.
"What this does is elevate the standard under which competition occurs," said Rep. Sander M. Levin (D-Mich.), chairman of a House subcommittee on trade. "This is the most effective anti-sweatshop provision. For a country to benefit, they have to give workers their rights."
The administration had been resistant to including the ILO standards without language guaranteeing they could not be used to influence U.S. labor law. Some Republicans, echoing the fears of industry, noted that the United States has not signed several treaties of the International Labor Organization, and some U.S. labor laws may violate its standards. Prison work in the United States, for example, could be considered a form of forced labor.
American industry groups have lobbied the Bush administration to demand a provision that would prevent the international standards from rewriting American law.
The sources said some industry groups have grown comfortable that it would be difficult for foreign governments to bring claims against the United States that would change American labor law. But others still oppose the compromise as a back-door way for American labor to use foreign trade deals to increase its power at home.
In the end, the sources said, the Bush administration faced up to the political reality that Democrats now run Congress. To gain votes on Capitol Hill, it embraced a compromise that could produce a backlash from business, rather than hold firm while its trade deals die.
