Bush Trade Deal May Need Wrong Party at Wrong Time

Centrist Democrats are cooling on free trade, even as the White House escalates its efforts to recruit their support for President Bush’s ambitious plan to knock down trade barriers across Central America.

Splits among congressional Republicans mean Bush may need substantial Democratic backing -- especially in the House -- to pass the Central American Free Trade Agreement. That’s an unusual position for an administration that has primarily relied on GOP unity to pass its agenda through Congress.

But even as the White House courts Democratic votes, the Democratic Party is continuing to shift away from the free trade positions that President Clinton promoted in the 1990s. Several prominent moderate Democrats who generally supported opening markets under Clinton oppose CAFTA, expressing concern about the impact of economic globalization on U.S. workers.

“There’s a recognition that the promise of trade liberalization has not lived up to the rhetoric,” said Rep. Ellen O. Tauscher (D-Walnut Creek), head of a group of centrist House Democrats. “There is real fear on the ground in every congressional district in America about how America is doing: Are we leading anymore? Have we squandered our competitive edge?”

CAFTA took two steps forward this week, with the Senate Finance Committee endorsing it in a nonbinding vote Tuesday and the House Ways and Means Committee following suit Wednesday.

But while both sides believe the treaty is likely to pass the Senate, the agreement -- like almost all other efforts to reduce trade barriers -- faces a much steeper climb on the House floor.

The administration wants Congress to approve the deal before early July.

Economically, the treaty’s impact is likely to be modest. U.S. trade with the six countries involved -- Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic -- totaled only about $33 billion last year. That’s less than U.S. trade with Ireland.

But politically, the agreement has assumed outsize importance. Like votes on the North American Free Trade Agreement with Mexico and Canada or trade benefits for China, it has become a Rorschach test for attitudes about the effect of international competition on U.S. living standards.

Trade votes almost always require complex legislative maneuvering because they typically divide each party between lawmakers drawn to opening markets and those responsive to industries and labor unions that are hostile to free trade. When Clinton won approval for NAFTA in 1993, he attracted more votes in the House from Republicans than Democrats, even though Democrats then held the majority.

On CAFTA, opposition from sugar growers and some textile interests has eroded Republican support, especially in the House. Some business lobbyists calculate that as many as 50 House Republicans -- out of 231 -- now appear inclined to oppose the treaty.

After this week’s committee votes, GOP officials and business lobbyists were cautiously optimistic about reducing the number of Republican treaty foes with a combination of hardball lobbying and inducements to industries -- particularly sugar growers -- now fighting the agreement.

But House passage might still require votes from as many as two dozen Democrats.

So far, the administration has struggled to attract support from Democrats. Only five in the House have publicly endorsed the treaty.

Most troubling for the administration has been the opposition of Democratic legislators and strategists previously identified with the party’s free trade wing. In May, New Democrat Coalition Chairwoman Tauscher and the centrist group’s three co-chairs wrote to Bush opposing the agreement.

Likewise, six of the eight Democrats on the Senate Finance Committee, as well as James Jeffords (I-Vt.), voted against the agreement Tuesday. Among those seven opponents, four backed NAFTA in 1993. On Wednesday, 15 of the 17 Democrats on the Ways and Means Committee voted against the treaty.

Many CAFTA backers attribute this opposition to pressure from labor unions and Democratic congressional leaders who are aggressively lobbying legislators to oppose the deal.

But the resistance also appears to reflect among Democrats a short-term hostility to Bush’s economic strategy and a long-term shift away from the free trade views embodied by Clinton’s support for NAFTA.

Democrats’ evolution of thinking was evident in the race for the 2004 presidential nomination. Each of the party’s three leading contenders -- Sen. John F. Kerry of Massachusetts, then-Sen. John Edwards of North Carolina and former Vermont Gov. Howard Dean -- said they would oppose CAFTA if it did not more strongly protect the rights of Central American workers.

Robert Shapiro, an undersecretary of Commerce for Clinton, said Democrats’ ardor for free trade was diminishing because of their belief that lowering trade barriers had not benefited U.S. workers as much as centrist Democrats had hoped the strategy would.

Instead, he said, the economy’s performance in recent years has increased fears that competition from low-wage countries such as China is depressing job creation and incomes for both low- and high-skill American workers.

For the Bush administration, that concern translates into two large hurdles with Democrats.

Most directly, it’s fueling Democratic demands for provisions to ensure that workers in the CAFTA nations can form unions and bargain for higher wages. Although the administration argues -- and even some Democratic experts accept -- that CAFTA protects worker rights at least as effectively as NAFTA and another free trade deal Clinton negotiated with Jordan, many Democrats insist on tougher measures.

Democratic critics also argue that Bush’s broader economic policies have soured attitudes toward free trade agreements by emphasizing tax cuts, rather than education and job training that could help U.S. workers hurt by foreign competition.

The administration has responded with promises to take steps outside CAFTA to promote labor rights in Central America. U.S. Trade Representative Rob Portman last week signaled support for increasing the funding that the U.S. provides CAFTA countries to help enforce labor laws.

And the administration won an endorsement for CAFTA from former President Carter, who called it a critical “chance to reinforce democracies in the region.”

But even among treaty advocates, expectations remain low about possible Democratic support. And that means that anxiety among the agreement’s supporters will probably remain high until the last votes in the House are counted.