Trade bill’s failure is seen as GOP gaffe

President Bush will arrive in Vietnam at the end of this week without the gift he had hoped to offer his hosts: permanent normal trade relations with the U.S. for the first time in more than 30 years.

The decision this week by House Republican leaders to withdraw a bill making that possible left the White House and the GOP red-faced -- and trade advocates alarmed.

“The economic repercussions could be very real and come very soon, as contracts and licenses for U.S. interests come into jeopardy,” said Virginia B. Foote, president of the U.S.-Vietnam Trade Council. She added that the failure to pass a bill would “put U.S. business and agriculture at a distinct disadvantage in Southeast Asia’s fastest-growing economy.”

On Capitol Hill, the bill’s failure was not seen as a shift in trade policy. It was viewed instead as a reflection of a Republican caucus in disarray after its mid-term election defeat and distracted by internal leadership selections taking place this week.

“I don’t think this was a vote against the trade agreement with Vietnam as much as it was a bit of bumbling by the Republican side,” said Edward Gresser, trade policy director for the Progressive Policy Institute.

House leaders rushed to vote on the bill Monday under special rules that require a two-thirds majority for a measure to pass. It fell 32 votes short of that mark, with a tally of 228 to 161. House leaders at first said they would have another vote later in the week under normal rules -- requiring only a simple majority to pass -- but then postponed it to December.

Both Republicans and Democrats expressed confidence that they would be able to pass the Vietnam trade legislation during the lame-duck session in December, when this Congress will meet for the last time.

“It is my intention that during our December session we will reconsider this bill,” House Majority Leader John A. Boehner (R-Ohio) wrote Bush on Wednesday.

But that may be the only window they have. Prospects for trade agreements will become far less certain in the new year when Democrats take power in the 110th Congress, bringing with them a slew of freshmen lawmakers with strong opinions on trade and a different set of legislative priorities.

Beyond that, the looming 2008 elections may interfere as well.

“Longer term, the administration has a window open to deal with the Democratic leadership in a way that meets some Democratic concerns and creates a coalition for trade, but they’ll have to work on it pretty quickly,” Gresser said. “The further we get out into next year, the more difficult it will be as administration strength will wane.”

A 1975 U.S. law requires Congress to conduct an annual review of Vietnam’s political and economic practices and grant yearly permission for trade to take place. But because Vietnam was recently admitted to the World Trade Organization, Congress must first pass the permanent normal trade relations bill before the U.S. can trade with that nation under WTO rules, which include lower Vietnamese import tariffs.

Establishing permanent normal trade relations with Vietnam under WTO rules would allow American firms access to the country’s cheap labor and enable them to better compete against international competitors already established in the country.

nicole.gaouette@latimes.com