White House, lawmakers break trade pact stalemate with South Korea, Colombia, Panama

Sen. Hatch calls deal 'highly partisan decision'

By Julie Pace

Associated Press

Published: Tuesday, June 28 2011 4:50 p.m. MDT

WASHINGTON — The White House and congressional lawmakers broke a stalemate Tuesday in the long-stalled effort to finalize coveted free trade agreements with South Korea, Colombia and Panama — pacts President Barack Obama has hailed as a boon for the U.S. economy.

As part of the deal, key lawmakers from both parties agreed Tuesday to extend aid for American workers displaced by foreign trade through 2013. The White House, acknowledging concerns from labor unions, had threatened to hold up passage of the pacts unless the Trade Adjustment Assistance program, or TAA, was renewed.

But whether the trade agreements will pass Congress is far from certain. Some top Republicans balked at including TAA, despite supporting assistance for workers. Sen. Orrin Hatch of Utah, the top Republican on the Finance Committee, said it was a "highly partisan decision" that "risks support for this critical job-creating trade pact in the name of a welfare program of questionable benefit at a time when our nation is broke." Senate Republican leader Mitch McConnell said he would oppose any trade deal in which the worker assistance program was embedded.

The Senate Finance Committee will begin considering the trade agreements and the assistance program on Thursday. Committee Chairman Max Baucus, D-Mont., plans to include TAA in the legislation on the Korea deal, the largest and most sought after of the three agreements.

Obama frequently cites passage of the three trade deals as an economic imperative for the U.S. He has touted the pacts as an opportunity to open up overseas markets to U.S. companies and make American products more attractive in the global marketplace.

White House press secretary Jay Carney said Tuesday: "Now is the time to move forward with TAA and with the Korea, Colombia and Panama trade agreements."

The pro-business U.S. Chamber of Commerce also urged lawmakers to move quickly to pass the pacts.

"I urge members of both parties to seize a reasonable compromise and move the trade agenda forward. The time to act is now," Chamber president Tom Donohue said in a statement.

The White House has long called for the trade pacts to be passed alongside an extension of TAA, a program many Republicans typically support.

The program was expanded two years ago as part of Obama's stimulus package to include aid for more displaced workers, but the expansion expired in February. Baucus said his proposal — which makes TAA benefits available to service as well as manufacturing industries, provides money for retraining and makes affordable health care available — would be extended through the end of 2013.

Baucus negotiated that proposal with Michigan Republican Rep. Dave Camp, the chairman of the House Ways and Means Committee, and Gene Sperling, one of the president's top economists. People involved in the talks said the administration agreed to accept Camp's demand that extending the assistance program be fully paid for exclusively with spending cuts, though it was unclear where the cuts were being made.

Shortly after Baucus announced his proposal, two Democratic senators from manufacturing-heavy states introduced separate legislation that would extend TAA through the end of 2016. Pennsylvania Sen. Bob Casey and Ohio Sen. Sherrod Brown said their lengthier extension of worker assistance would allow U.S. companies to remain competitive and create jobs "in the face of unfair competition from foreign manufacturers."

The U.S. signed the trade pacts with South Korea, Panama and Colombia in 2007 under President George W. Bush. But the then-Democratic-led Congress never brought the agreements up for vote, giving the Obama administration time to renegotiate areas it found objectionable.

U.S. trade officials spent months negotiating outstanding issues on the pacts, reaching an agreement with South Korea in December. The pact would support up to 70,000 U.S. jobs, according to the administration.

Deals were struck this spring with Panama, one of Latin America's fastest-growing economies, and Colombia. The administration says a final pact with Colombia will boost U.S. exports by more than $1 billion per year.

All three agreements need congressional approval before they can be implemented.

Labor unions and key Democrats continue to have deep concerns in particular over the deal with Colombia, a country considered extremely dangerous for union organizers. While Colombia has agreed to implement an action plan for protecting worker rights and ending violence against union groups, the top Democrat on the House Ways and Means Committee, Sander Levin of Michigan, said Monday that he would oppose the trade deal if it did not include specific language committing Colombia to carry out those steps.

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Associated Press writer Jim Abrams contributed to this report.

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