After weeks of anxious negotiations, the White House on Tuesday lost its uphill struggle to win the support of House Majority Leader Richard A. Gephardt (D-Mo.) for the three-way free trade agreement with Mexico and Canada.
Gephardt, who is considered one of the most influential voices in Congress on trade issues, said the North American Free Trade Agreement, negotiated by former President George Bush, remained flawed despite President Clinton’s efforts to add provisions protecting labor and the environment. So, he said, “I will vote against this NAFTA.”
The House and Senate must approve the agreement before it can take effect, and Clinton has made NAFTA a high priority for his Administration.
At the center of Gephardt’s quarrel with the agreement, which would eliminate tariffs and other barriers to trade among the three countries, is fear that it poses “a threat to our wages and our standard of living,” he said.
Clinton, with whom Gephardt discussed his decision Monday, said Tuesday in an interview with reporters that losing the majority leader’s support “doesn’t help, but I don’t think it’s fatal.”
Although not a surprise, Gephardt’s announcement is a blow to the President. “We were jumping through hoops” to avoid it, an Administration official said.
The decision reflects a split in the Democratic leadership on the sensitive economic and diplomatic issue. Two of the three most senior Democrats in the House will vote against NAFTA. House Whip David E. Bonior of Michigan, the third-ranking Democrat, has already announced his opposition. House Speaker Thomas S. Foley (D-Wash.) supports the trade pact.
The Administration had hoped that Gephardt’s concern could be allayed if sufficient incentives were offered in the way of retraining programs for workers losing their jobs as a result of the pact.
To that end, Labor Secretary Robert B. Reich told the Senate Finance Committee that the Administration would propose a major overhaul of unemployment compensation to help such displaced workers. He said the program would emphasize retraining and job counseling, rather than a temporary replacement of lost income.
Gephardt has long been trying to hold trade negotiators’ feet to the fire, acknowledging the need for greater world trade but demanding that any relaxation of barriers not be at the expense of jobs in this country. His insistence on putting job protection ahead of lowering trade barriers earned him substantial backing from organized labor when he sought the Democratic presidential nomination in 1988, and job protection remains a high priority with many union leaders.
In a speech at the National Press Club, however, Gephardt said:
“We are losing good-paying jobs and that will continue with or without NAFTA. The much greater threat is to our wages and our standard of living. And, on this important point, there can be no doubt that NAFTA, as drafted, will only increase the downward pressure . . . . A high and rising standard of living, and a long-term policy of ensuring better jobs at better wages, won’t be achieved under this agreement. On the contrary, I think the agreement will undermine this goal.”
In the speech, and later in an interview, Gephardt said Mexican labor relations would be worsened under the agreement because the pact excluded from an international dispute resolution procedure coverage for the right to strike and to collective bargaining.
Times staff writers Ronald Brownstein and Mark Bousian contributed to this story.