CQ Politics
By Joseph J. Schatz, CQ Staff
April 20, 2009

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The Obama administration and trade advocates in Congress are trying to put a series of long-delayed trade pacts back on the front burner, despite widespread skepticism on Capitol Hill about the benefits of expanded international commerce.

On the heels of the Summit of the Americas in Trinidad and Tobago, U.S. Trade Representative Ron Kirk said Monday that a delegation from Panama will visit Washington this week to try to resolve disputes over the U.S.-Panama trade deal. Kirk added that President Obama hopes to clear remaining obstacles to a separate pact with Colombia.

Ultimately, Obama — who met with Colombian President Alvaro Uribe during the summit — believes that “a resolution of the Colombia trade agreement would be a good thing for both economies,” Kirk said.

Meanwhile, the chairman and ranking member of the Senate Finance Committee — Max Baucus , D-Mont., and Charles E. Grassley , R-Iowa — wrote Obama on Monday asking him to “begin the hard work of winning broad approval” of a trade pact with South Korea, which is stalled due to resistance from U.S. automakers and concerns over restrictions on the Asian nation’s beef imports.

All three trade deals were negotiated by George W. Bush ’s administration but have faced opposition in the Democratic-controlled House and Senate over the past two years. During his Senate confirmation process this year, Kirk told senators wary of mounting job losses — and public opinion polls showing declining support for free trade — that his office would undertake a comprehensive review of each trade deal.

At the same time, the United States has faced pressure from abroad not to appear overly protectionist in the midst of a global economic downturn, a posture many economists fear could slow a recovery.

But hammering out adjustments or side agreements that would win majority support in the House for any of the deals would be difficult. Labor unions, environmental groups and consumer advocates oppose all three agreements for varying reasons, including the effect of trade on American workers. And perhaps even more significantly, it’s unclear what it would take to satisfy Democratic leaders in Congress.

Lori Wallach, director of Public Citizen’s Global Trade Watch program, which is critical of recent trade agreements, argued that Kirk was trying to “create a sense of momentum on something that is highly contested and not decided . . . and has a huge political liability domestically.”

Trade critics contend that the North American Free Trade Agreement (NAFTA) resulted in U.S. job losses and complain that the three pending pacts were written in the NAFTA mold. Kirk, however, said concerns about NAFTA “can be addressed without having to reopen the agreement.” Some labor groups have called for a renegotiation of the pact, a move Obama also suggested during his presidential campaign.
Most Likely to Succeed?

The Panama deal has the fewest political problems of the three, in part due to its small size in terms of overall trade flows. But Sander M. Levin , D-Mich., chairman of the House Ways and Means Subcommittee on Trade, said in March that Panama has not yet met sufficient labor standards. He also raised concerns about the country’s reputation for banking secrecy and as a tax haven.

Kirk said he “will be working with the Panamanians to identify and resolve all of those issues.” While declining to give a timeline, he said Panama’s own political situation may yield a “discrete” window to push the trade deal through — an apparent reference to the nation’s coming May presidential elections.

Concerns about violence against labor unions in Colombia have stymied movement on that deal, despite support from Democrats such as House Majority Leader Steny H. Hoyer of Maryland.

In a conference call with reporters Monday, Kirk said that while progress has been made toward addressing those concerns, there are “a number of issues that need to be resolved.”

But the fact that the Obama administration is talking about moving forward on the Colombia deal was cause for optimism among trade advocates eager for any sign of progress on their agenda.

“We applaud the administration for sending a positive signal that a dialogue between the United States and Colombia is already underway,” Bill Reinsch, president of the National Foreign Trade Council, said in a statement. “With both countries working together toward a resolution of remaining concerns that stand in the way of approval of the FTA, we believe that progress can be made toward the ratification of the agreement.”

On the U.S.-South Korea deal, Grassley and Baucus cast their comments in the context of North Korea’s widely condemned missile launch on April 5, adding that the trade deal would “anchor our economic presence in Asia.”

Baucus and Grassley acknowledged disputes over the entry of U.S. beef into South Korea — a key issue for the Montana chairman — and the fact that the trade deal would give South Korean auto companies wide access to the U.S. market despite ongoing concerns that the Asian country restricts imports of American cars.

Nonetheless, the two senators pressed Obama to keep negotiations moving.

“The issues are complex, and they may not be easy to resolve,” Baucus and Grassley said. “Yet their very complexity, as well as their potential rewards, demands we begin our work without delay and persist as long as necessary.”

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