Pelosi announces bipartisan trade policy

House Speaker Nancy Pelosi (D-San Francisco), joined by congressional leaders and two Bush administration officials, announced a new bipartisan trade policy Thursday that will ease passage of pending trade agreements with Panama and Peru and could pave the way for renewal of the president’s authority to “fast-track” trade agreements through Congress.

“Today marks a new day in trade policy,” Pelosi told a news conference, standing between Treasury Secretary Henry M. Paulson Jr. and U.S. Trade Representative Susan C. Schwab. The new framework, she said, incorporates labor and environmental standards into trade agreements, a change that labor unions and environmental groups have demanded for years.

“Last November, Americans voted on a new direction, and that includes a new direction on trade,” Pelosi said, urging open markets but also warning: “We can have a bipartisan consensus on trade, but only with a recognition of labor and environmental principles.”

Most Democrats have opposed recent free trade agreements negotiated by the Bush administration, arguing the deals either did not address labor and environmental concerns or did so only in weak side deals.

Paulson said the announcement signaled a willingness by the administration to work with Congress on what he hoped would be “one in a row” of agreements.

In a statement late Thursday, President Bush said he was pleased with the new policy and looked forward to a renewal of his trade promotion authority, popularly known as “fast track,” which expires next month. “Fast track” gives a president the authority to speed trade agreements through Congress without amendments, only a yes or no vote.

Senior Democrats, including Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, said they hoped to rebuild the consensus on free trade fostered during the Clinton administration. “This will help pave the way for more cooperation on trade down the road,” Baucus said.

Republicans, for the most part, agreed.

“We are reforging that bipartisan coalition on trade that used to exist in this country,” said Rep. Jim McCrery of Louisiana, the senior Republican on the House Ways and Means Committee, who helped negotiate the new policy.

Sen. Charles E. Grassley of Iowa, the Senate Finance Committee’s top Republican, said he was “glad we’ve secured this bipartisan consensus” but added that he would reserve final judgment until he saw the text of the final trade agreements.

The major provisions of the new trade policy require trade partners to enforce International Labor Organization standards advocated by the AFL-CIO and other unions. The standards prohibit employment discrimination and child or slave labor. They also protect workers’ rights to free association and collective bargaining.

The new policy also allows federal and state governments to require contractors to meet the labor standards.

It requires trade partners to enforce environmental protections sought by groups like the Sierra Club, such as restrictions on illegal logging, including of mahogany in Peru, and a requirement that foreign countries abide by seven multilateral environmental agreements that protect, among other things, endangered species, the ozone layer and wetlands.

The policy also includes provisions that make it cheaper to buy generic U.S. drugs abroad, prevent foreign companies from operating U.S. ports, and ensure that investment protections do not favor foreign companies over domestic competitors.

Rep. Charles B. Rangel (D-N.Y.), the chairman of the House Ways and Means Committee, said labor unions would support the new policy. “I have been in touch with labor leaders throughout the country,” he said, adding, “We have a perfect understanding.”

A spokeswoman for the AFL-CIO in Washington said its legislative staff would have no comment on the policy until they could review the text. Senior Democrats said they planned to release the new policy in the next few days.

But business leaders, who expressed concerns after Rangel announced the outlines of the Democrats’ new trade policy in March, said they approved.

“We’re applauding the bipartisan effort to get the trade agenda moving,” said Christopher Wenk, senior director for international policy at the U.S. Chamber of Commerce in Washington. “It is our hope that this deal can pave the way for a solid majority of members to vote in favor of renewing trade promotion authority and passage of bilateral agreements with Peru, Colombia, Panama and Korea.”

Schwab, the U.S. trade representative, told the news conference that she had contacted the four governments with pending trade agreements. The agreements with Peru and Panama are being sent back to those governments for ratification under the new U.S. policy, she said.

The bipartisan congressional coalition behind the new trade policy has enough votes -- although not necessarily a majority of Democratic votes -- to pass the Peru and Panama agreements, Rangel said. Pelosi added that the policy also would apply to the agreements with South Korea and Colombia, although those two will be harder to get past Congress.

A copy of the policy distributed to some Congress members on Thursday notes that “the problem of Korea’s systematic barriers in the automotive, manufactured, agricultural and services markets will have to be addressed” before the trade agreement can be approved.

The material given to legislators also includes a letter Rangel and Rep. Sander M. Levin (D-Mich.), chairman of the Ways and Means subcommittee on trade, sent to Schwab on Thursday, saying they planned to visit Colombia to explore solutions to “the systemic, persistent violence against trade unionists and other human rights defenders, the related problem of impunity, and the role of paramilitaries in perpetuating these crimes.”

Rangel and Levin suggested that Congress and the administration encourage the Colombian government to take several steps to ease passage of a trade agreement, including a “massive strengthening” of the Colombian attorney general’s office to prosecute crimes committed by paramilitaries.

Senior Democrats said the policy did not apply to the ongoing Doha round of World Trade Organization negotiations, nor did it mean that they were willing to extend the president’s “fast track” negotiating authority.

But many took the announcement as a sign that “fast track” was still on the table.

Rep. Betty Sutton of Ohio, one of 71 freshman Democrats to sign a letter earlier this year urging Rangel not to compromise “fair trade” principles, was “frustrated” that she and other new legislators were not consulted about the compromise, her staff said.

Six House Democrats, including Linda T. Sanchez of Lakewood, sent a letter late Thursday to the chairman of the party caucus, Rep. Rahm Emanuel of Illinois, asking him and other caucus leaders not to endorse the new policy until they reviewed the fine print.

But Rep. Jane Harman (D-Venice), a moderate who voted for “fast track” in 2002 but against such landmark trade agreements as the North American Free Trade Agreement, said the bipartisan coalition would probably hold, allowing the Peru and Panama agreements to pass this year, to California’s benefit.

“Having world markets for California agriculture, aerospace and entertainment products is absolutely crucial,” Harman said. “America no longer writes all the rules. There are trading blocs all over the world, and they are ready to trade with each other -- and we are enormously advantaged if we can write fair trade rules to participate in those markets.”

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molly.hennessy-fiske@latimes.com