While much of the publicity surrounding the new Congress has centered on the war in Iraq and the administration’s exercise in budget fiction writing (a plan purported to eliminate the deficit in five years), a behind-the-scenes confrontation may be shaping up on trade policy.
President Bush, who’s had pretty much carte blanche in cutting trade deals during his time in office, thanks to a compliant Congress, now must deal with a sizable contingent of lawmakers who question the direction of U.S. trade agreements.
This sea change can also have an impact on whether the Doha Round of the World Trade Organization talks is resurrected or fades into oblivion. And it may also, at long last, bring meaningful progress in moving toward lifting trade/travel restrictions with Cuba.
A recent letter from 37 House members to the chairman of the Ways and Means Committee noted that “our ability to take a vocal stand against the administration’s misguided trade agenda” was a key factor in their being elected in November, and said, “we hope to work with you … in crafting a new model for U.S. trade agreements.”
It went on, “It is very important that we not only reverse the troubling results of the administration’s trade agreements and policies, but also that we (can) deliver on the promise we made to our constituents to move our nation in a new and improved direction on trade.”
Several Democrats have already warned they may not approve trade agreements with Panama, Colombia, and Peru without provisions for environmental and labor protection standards in those countries.
Others have made it clear that the president’s request for trade promotion authority (TPA) won’t by any means be a cakewalk (he got it in 2002 only after a bitter partisan fight, and then by only one vote). That TPA, which expires June 30, permits the president to negotiate trade agreements for the United States, which Congress then can only approve or deny, but not modify.
Without TPA, Mr. Bush’s trade representatives would have little bargaining power in negotiations with prospective partners, effectively placing things on hold until after the 2008 elections. TPA is also considered vital if the Doha talks, which ground to a halt over disagreements on agricultural subsidies and tariffs, are to be kick-started.
And the administration wants TPA for its efforts to pressure China to conform with WTO rules, to revalue its currency, and to modernize its tax laws. As if to demonstrate its intent, the U.S. filed a complaint with the WTO Feb. 2, alleging illegal subsidization of steel, wood, and other industries.
To that full plate of trade issues, add the determination of ag groups, farm state lawmakers, and business organizations to hammer out a new policy approach that could lead to lifting of restrictions on trade and travel with Cuba, which the president has adamantly opposed.
It will also be bitterly opposed by the powerful Cuban-American bloc in Florida, but more voices are being raised in support of a new strategy for dealing with a neighbor country that represents a potentially huge opportunity for U.S. agriculture.