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Breakthrough on stalled trade pacts announced

Senate leaders promise swift votes on the trade agreements with South Korea, Colombia and Panama after Congress returns next month.

August 05, 2011|By Lisa Mascaro and Don Lee, Los Angeles Times
  • The trade agreements would open overseas markets to U.S. exports, including popular American beef. Above, cattle at an Illinois feedlot.
The trade agreements would open overseas markets to U.S. exports, including… (Daniel Acker, Bloomberg )

Reporting from Washington — Senate leaders announced a breakthrough on long-stalled trade agreements with South Korea and other U.S. trading partners, promising swift votes on one of President Obama's top priorities after Congress returns next month from its August recess.

The accord comes at a time of growing economic uncertainty in the U.S. as unemployment remains high and the president and members of both parties struggle to show voters that jobs and the middle class are their top priority.

Proponents say the trade agreements — with Colombia and Panama as well as South Korea — will pump as much as $14 billion into the U.S. economy and add more than 250,000 jobs. But the benefits may not be seen immediately because it will take time for many U.S. companies to take advantage of the increased access to foreign markets.

In the short term, the benefits may lie more with the three trading partners, especially South Korea, which is expected to move quickly to capitalize on the opportunity to expand its existing penetration of the U.S. auto market.

The South Korean agreement is seen as the most substantial of the three pacts, opening overseas markets not only to U.S. exports, including popular American beef, but also to professional services in law, finance and accounting. It also deepens U.S. diplomatic ties with the Asian region at a time when China is an ascendant political force, experts said.

With the agreement on timing, the trade pacts are now one of the key economic initiatives likely to move through the divided Congress this fall. The business community hailed the tentative progress.

"These trade agreements are one of the best ways to create jobs in America now," said Thomas J. Donohue, president and chief executive of the U.S. Chamber of Commerce. "But time is short and further delays are unacceptable."

Most members of Congress, Democrats and Republicans, have supported the proposed trade agreements with South Korea, Colombia and Panama, but the pacts had stalled over a related employment assistance program for U.S. workers who lose their jobs to trade.

Obama and congressional Democrats had sought to include an extension of the Trade Adjustment Assistance program alongside the trade pacts. The $575-million job training program expired in February but faced growing opposition from Republicans over its cost.

Under the framework for moving to a vote, Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) agreed to decouple the two issues, holding separate votes.

Although the worker assistance program is likely to pass in the Democratic-controlled Senate, it faces difficulties in the GOP-controlled House.

The political trade-off did not please House Democrats, who are concerned that the worker aid program will be left behind.

"The path forward in the House as well as the Senate must be ironclad in its assurance that [the Trade Adjustment Assistance program] will be renewed," Rep. Sander M. Levin of Michigan and Rep. Jim McDermott of Washington, the top Democrats on key committees, said in a joint statement. "American workers deserve no less."

Sen. Max Baucus (D-Mont.) called it a "welcome step in the right direction."

Opponents of such pacts, however, question whether the trade agreements can deliver the jobs they promise.

"The people who support these deals are going to try to sell them as job creation — I don't think most Americans agree with that," said Thea Lee, deputy chief of staff at the AFL-CIO, which opposes the trade pacts. "We don't think it's a good political strategy or a good economic strategy."

For many years, maintaining the Trade Adjustment Assistance program was supported by both Democrats and Republicans. In Washington's present partisan climate, however, with the 2012 election season already launched, it is not clear whether the history of bipartisan support for the TAA will hold up.

It offers more than two years of income support for displaced workers who are earning degrees or undergoing job training, covering more than 280,000 workers in 2010, according to the Labor Department. Funding for the program was doubled two years ago during the recession.

lmascaro@tribune.com

don.lee@latimes.com

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