White House, lawmakers break trade pact stalemate

[June 29, 2011]  WASHINGTON (AP) -- The White House and congressional lawmakers reached a deal Tuesday to propel three coveted free trade agreements toward a vote on Capitol Hill, though the ultimate fate of the pacts with South Korea, Colombia and Panama remained uncertain.

Key lawmakers from both parties struck an agreement with the administration to extend aid for American workers displaced by foreign trade. The White House, acknowledging concerns from labor unions, had threatened to hold up passage of the pacts unless the Trade Adjustment Assistance program, or TAA, was renewed.

But the process for ensuring passage of the trade deals and the assistance for workers was unclear Tuesday.

Senate Finance Committee Chairman Max Baucus, D-Mont., said he planned to attach TAA to the Korea deal, the largest and most desirable of the trade pacts, when his committee began discussing the agreements on Thursday.

But top Republicans balked at that proposal. Sen. Orrin Hatch of Utah, the top Republican on the Finance Committee, said it was a "highly partisan decision" that "risks support for this critical job-creating trade pact in the name of a welfare program of questionable benefit at a time when our nation is broke." Senate Republican leader Mitch McConnell said he would oppose any trade deal in which the worker assistance program was embedded.

Republicans generally support both trade and worker assistance programs, so Baucus' move could put GOP lawmakers in the awkward position of either having to vote against issues that traditionally have GOP support or handing President Barack Obama a victory on a top priority.

Baucus negotiated with House Ways and Means Chairman Dave Camp, R-Mich., and top White House economist Gene Sperling to reach a deal on the substance of the worker assistance. Their plan would make benefits available to service as well as manufacturing industries, provide money for retraining and make affordable health care available.

Camp said in a statement Tuesday the decision on how to move the trade deals and TAA through the House was an issue for Republican leadership to determine. A spokesman for House Speaker John Boehner said the worker assistance program should be dealt with separately from the trade agreements.

Obama frequently cites passage of the three trade deals as an economic imperative for the U.S. He has touted the pacts as an opportunity to open overseas markets to U.S. companies and make American products more attractive in the global marketplace.

White House press secretary Jay Carney said Tuesday: "Now is the time to move forward with TAA and with the Korea, Colombia and Panama trade agreements."

The pro-business U.S. Chamber of Commerce also urged lawmakers to move quickly to pass the pacts.

"I urge members of both parties to seize a reasonable compromise and move the trade agenda forward," chamber president Tom Donohue said in a statement. "The time to act is now."

The TAA program was expanded two years ago as part of Obama's stimulus package to include aid for more displaced workers, but the expansion expired in February. The extension agreed to in negotiations is smaller than the 2009 package and would continue through 2013.

Administration officials said continuing TAA would be paid by spending cuts, though Camp's office said the details of where the cuts would come from were still being worked out.

The U.S. signed the trade pacts with South Korea, Panama and Colombia in 2007 under President George W. Bush. But the then-Democratic-led Congress never brought the agreements up for vote, giving the Obama administration time to renegotiate areas it found objectionable.

U.S. trade officials spent months negotiating outstanding issues on the pacts, reaching an agreement with South Korea in December. The pact would boost U.S. exports by $11 billion a year, according to the administration.

Deals were struck this spring with Panama, one of Latin America's fastest-growing economies, and Colombia. The administration says a final pact with Colombia will boost U.S. exports by more than $1 billion per year.

All three agreements need congressional approval.

Labor unions and key Democrats continue to have deep concerns in particular over the deal with Colombia, a country considered extremely dangerous for union organizers. While Colombia has agreed to implement an action plan for protecting worker rights and ending violence against union groups, the top Democrat on the House Ways and Means Committee, Rep. Sander Levin of Michigan, said Monday that he would oppose the trade deal if it did not include specific language committing Colombia to carry out those steps.

[Associated Press; By JULIE PACE]

Associated Press writer Jim Abrams contributed to this report.

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