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Despite divisiveness, Congress passes 3 trade pacts

After a debate marked by disagreement among Democrats, both houses approve free-trade deals with Panama, Colombia and South Korea, a key victory for President Obama.

October 13, 2011|By Kathleen Hennessey, Washington Bureau
  • South Korean President Lee Myung-bak, second from right, dines with President Obama at a Korean restaurant in Washington. Congress passed a free-trade agreement with South Korea.
South Korean President Lee Myung-bak, second from right, dines with President… (European Pressphoto Agency )

Reporting from Washington — Congress passed a trio of free-trade agreements late Wednesday, removing barriers to trade with Panama, South Korea and Colombia — but exacerbating deep disagreements among Democrats on the government's role in protecting U.S. industries.

The approval of the pacts, in a rare bipartisan collaboration, is a big victory for President Obama, who sold the deals as a key step toward bolstering job growth. But it angered liberal groups and labor unions that say the agreements will hurt working Americans by subjecting them to additional foreign competition and accelerating a race to the bottom on wages.

All three agreements passed easily in the Republican-led House, over the objections of most Democratic lawmakers. The Senate passed each deal by a strong majority, overcoming opposition largely made up of liberal Democrats and lawmakers representing onetime industrial hubs.

The debate exposed regional loyalties that transcended party and intensified intraparty battles likely to carry into the election season.

Republicans, meanwhile, are tangled up in their own trade fight involving Chinese currency. House Speaker John A. Boehner of Ohio is refusing to bring up Senate-passed legislation that would punish the Chinese for holding down their currency — despite the fact that many GOP lawmakers support the bill and Mitt Romney, the party's leading presidential candidate for most of the campaign so far, argues that it's time get tough on China.

House Democrats tried to force a vote Wednesday by attaching the China currency bill to the Colombia trade agreement, but the move was blocked on a party-line vote.

The dispute over the three trade pacts was a potent reminder of how little the politics of the issue has changed in the nearly two decades since a Democratic president, Bill Clinton, signed the North American Free Trade Agreement over objections from his own party.

Though Americans generally indicate they support trade, many blame free-trade agreements for the continued decline of U.S. manufacturing and halting progress on environmental and human rights goals, polls show. The hostility is most acute in the industrial Midwest.

That frustration was palpable in the debate Wednesday as opponents labeled the new agreements a retread of NAFTA.

Ohio Democratic Sen. Sherrod Brown excoriated "the geniuses around here … and in the White House" for repeating past mistakes. Sen. Bob Casey (D-Pa.) declared, "We need a trade policy in the United States of America, and we don't have one right now."

Both Casey and Brown voted against all three deals.

In an email, the AFL-CIO warned its members that "a bipartisan group of lawmakers is ready to throw hundreds of thousands of workers under the bus" and pointedly noted that Obama was ready to sign the agreements.

Like past presidents, Obama sided firmly with the advocates of free trade. The deals' approval was timed to coincide with a state visit from South Korean President Lee Myung-bak this week.

Obama argues that the agreements are crucial to his effort to double U.S. exports in five years, a pledge he made nearly two years ago as part of a plan to rebuild the economy and spur job growth.

The White House says the three deals will boost U.S. gross domestic product, the broadest measure of economic activity, by more than $12 billion a year.

Even so, that's less than one-tenth of 1% of GDP. The agreements won't have a significant effect on output or employment, many economists say, because the trading partners' markets are relatively small.

The agreements, first negotiated by the George W. Bush administration, were reworked to reflect Democrats' concerns about human rights. The Colombia pact, for example, was paired with a side agreement aimed at addressing a history of violence in that country against union activists. Still, the Colombia deal encountered the most opposition in both chambers, passing the House, 262 to 167, and the Senate, 66 to 33.

The administration won the support of the United Auto Workers for the South Korea deal, which is expected to further open the U.S. market to Korean carmakers.

The trade agreements had been stalled by a Republican objection to a program that would provide aid to workers hurt by foreign competition. GOP leaders in the House eventually conceded, and the renewal of the program passed easily in the House on Wednesday.

GOP leaders are facing their own internal pressures over the currency bill. Sixteen Republican senators bucked leadership Tuesday to help Democrats pass a bill aimed at sanctioning China and cracking down on currency manipulators.

A similar bill in the House has 225 co-sponsors, enough to pass. But Boehner repeated Wednesday that he had no plans to bring the legislation up for a vote. Major business groups oppose it, and the speaker has said he doesn't believe Congress should weigh in on the matter.

"Given the volatility in the world markets, given the uncertainty about the world economy, for the Congress of the United States to be taking this step at this moment in time poses a very severe risk of a trade war," Boehner said.

Bringing the bill to the floor would put Republicans in a difficult position. Though most don't want to defend China, they're unwilling to incur the wrath of the business lobby.

Chris Chocola, president of the Club for Growth and a former Indiana congressman, said it was "Boehner's job" to make sure Republicans didn't have to vote on the currency legislation, a move that would alienate groups like his. "Trade is just a tough political issue," he said. "Not every elected official is willing to fight the fight."

kathleen.hennessey@latimes.com

Don Lee in the Washington bureau contributed to this report.

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