Senate OKs Fast-Track Trade Bill

The Senate approved legislation Thursday to expand the White House’s authority to negotiate trade pacts, handing President Bush a victory on one of his key strategies for bolstering the economy.

The 64-34 vote sent the measure to the president, who will sign it into law soon. Under the bill, Congress would be permitted to approve or reject but not modify trade deals worked out with other nations.

The measure includes a Democratic-pushed expansion of federal benefits for workers who lose their jobs because of foreign competition.

Bush called a group of Republican and Democratic senators after the vote and praised them for making it “much more likely somebody is going to be able to find work, and some farmer is going to be able to sell his product, and some nation is going to be able to trade with us, which will help lift them out of poverty.”

He also signaled his intention to have his administration exercise to the fullest its new authority, known as “fast-track” negotiating power. Bush joked that U.S. Trade Representative Robert B. Zoellick has “his running shoes on. He’s going to hit the ground running to bring us some good trade agreements.”

Analysts said the bill’s passage is likely to jump-start global and hemispheric trade negotiations because it gives trading partners confidence that the U.S. administration can make deals that will stick.

“It removes a major obstacle to active U.S. leadership of the global trade negotiations,” said Jeffrey Schott, a trade specialist at the Institute for International Economics. “We’ve always been engaged, but our ability to lead the process had been impaired by doubts” that Congress, pressured by constituents, would revise agreements that lowered U.S. trade barriers.

What the fast-track authority does is “recognize that trade is a two-way street,” Schott said. “If we are going to achieve the benefits we want, we have to allow foreign markets to compete in our markets.”

Still, the practical effect of the measure may not be seen for years.

“Since trade-negotiating authority is merely a tool, not an end in itself, the significance of this fast-track vote can only be judged by what the administration ultimately accomplishes with it,” said Bruce Stokes, senior fellow in economic studies for the Council on Foreign Relations.

Bush lobbied hard to gain the authority, traveling to Capitol Hill on July 26 when the issue was before the House. He also stayed up late that night to phone wavering lawmakers.

The House, where concerns about the effect of trade on hometown industries are more pronounced than in the Senate, approved the legislation, 215 to 212.

Opponents say the legislation will accelerate trends that cause U.S. jobs to be lost to other countries where workers are paid less. They also said the measure contains no assurance that foreign countries would observe basic environmental and labor standards.

The AFL-CIO’s chief lobbyist told senators the bill would allow “end-runs around congressional checks and balances on future trade agreements at a time when the American people’s trust in corporations is so low.”

But the measure easily prevailed in the Senate, in part because of concerns about the U.S. economy and the stock market turmoil. Its passage was also helped by the provision to expand benefits, such as retraining, for workers left jobless because of import deals.

The bill will nearly triple the size of the benefits’ fund, to more than $10 billion over the next decade. Displaced workers will be eligible for a tax credit to pay for 65% of health insurance costs.

Voting for the bill were 43 Republicans, 20 Democrats and one independent. California’s two Democratic senators split on the bill, with Dianne Feinstein voting for it and Barbara Boxer against it.

“Trade has always been more popular in the Senate, reflecting the importance of agricultural exports and their greater representation in the Senate,” said Thomas Mann, a congressional scholar at the nonpartisan Brookings Institution. “And Bush conceded a lot of money to the Senate Democrats” for the displaced workers’ fund.

Beginning with President Ford, every president had some form of fast-track authority. But Congress, which has granted the authority for limited periods of time, refused to renew it for President Clinton in 1994 after a bitter fight over the North American Free Trade Agreement. The current legislation is for five years.

U.S. farm subsidies and price supports, as well as textile subsidies, are likely to be the first targets in future negotiations on trade pacts. These talks are expected to include efforts by the Bush administration to expand NAFTA from Mexico and Canada to include all of North and South America, except Cuba.

Robert Litan, director of economic studies for the Brookings Institution, said difficult negotiations on treaties lie ahead. “Passage of fast-track is just the opening pitch in a long-inning ballgame,” he said.

He noted that the United States has taken a series of steps that have caused other nations to wonder “how really committed we are to further multilateral trade liberalization,” such as new steel tariffs.

During Thursday’s Senate debate, opponents of the legislation contended that Congress was ceding too much authority to the president.

But Senate Finance Committee Chairman Max Baucus (D-Mont.), who helped craft the legislation, said, “We don’t give the president a blank check.” He said the legislation lays out “negotiating objectives” on issues such as worker rights and environmental protection.

But organized labor is particularly unhappy with a provision it says will undermine worker and environmental protections in future trade agreements.

“We definitely see it as backward movement, which is so frustrating,” said Thea Lee, AFL-CIO assistant director for public policy. “For a decade, we’ve been making slow and steady progress toward putting enforceable workers’ rights in the core of these agreements.”

Along with the increased negotiating authority for Bush, the trade measure will extend preferential tariff treatment for imports from Colombia, Bolivia, Ecuador and Peru, whose governments are trying to wean their economies away from cocaine production.

Feinstein said the measure represents “the right balance,” allowing Congress and the administration to work together to promote trade while providing support for workers who might lose jobs because of increased globalization.

But Boxer said: “I do not believe I should give up the legislative authority vested in the Congress by the Constitution. If Congress gives up the ability to amend trade agreements, I would lose my opportunity to fight for good jobs and help the environment.”

Among those supporting the bill was the California Wine Institute, which said the legislation could reduce trade barriers in other countries, such as high tariffs and distribution restrictions.

The bill will create opportunities for “greater market access for California wine,” said Bobby Koch, the institute’s senior vice president.