U.S. trade bills advance but clash clouds future

WASHINGTON Thu Jul 7, 2011 6:44pm EDT

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WASHINGTON (Reuters) - U.S. trade deals with South Korea, Colombia and Panama cleared initial hurdles in Congress on Thursday, but a party-line clash over a program to help workers displaced by trade threatened future action.

The Senate Finance Committee backed all three agreements, but panel Republicans unanimously opposed the Korea pact because of the fight over Trade Adjustment Assistance (TAA).

Meanwhile, the House of Representatives Ways and Means Committee approved the three deals without a single 'yes' vote from President Barack Obama's fellow Democrats.

The three agreements are projected to boost U.S. exports by about $13 billion, helping to meet Obama's goal of doubling exports in five years to create new American jobs.

The committee action sets the stage for Obama to send final bills to implement all three deals to Congress for straight 'yes' or 'no' votes. That could happen as early as next week.

However, the Democrat-controlled Senate committee and Republican-led House panel offered conflicting advice over how to handle TAA, a nearly 50-year-old program that has become a major point of contention between the two parties.

Without an agreement on TAA, White House efforts to pass the trade bills could founder, despite concern in both parties that the United States is falling behind the European Union, Canada and others in nailing down trade deals.

"I hope we can find a better path forward and the president will now act quickly and submit these agreements for congressional consideration, without including the TAA poison pill," said Senator Orrin Hatch, the top Republican on the Senate Finance Committee.

U.S. Trade Representative Ron Kirk said the administration looked forward to working with congressional leaders to find a way to get both TAA and the trade deals approved.

SENDING SIGNALS

Republicans object to a White House plan to include TAA in the implementing bill for the South Korea agreement on grounds the job training program is too costly and ineffective.

Democrats say the program is vital to help workers who lose their jobs as a result of import competition or their workplace moving overseas. They fear opponents will block action on TAA if it moves as separate legislation as Republicans demand.

Senate Finance Committee Democrats defeated a Republican attempt to strip TAA from the Senate version of the Korea bill, and then voted to approve the agreement with Republicans -- who had been pushing Obama for two years to send up the agreement negotiated under former President George W. Bush -- voting no.

In the House, Democrats offered an amendment to include TAA in the Korea bill, but the effort was defeated by Republicans. The panel then approved the pact with Democrats voting no.

"This vote is a message to the administration: Don't proceed unless it is absolutely clear that TAA will happen. And there is only one way you can be sure that it will happen and that is to include it in an FTA," said Representative Sander Levin, the top Democrat on Ways and Means.

House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, said he intended to move a TAA bill separately and Senate Finance Committee Max Baucus, a Montana Democrat, said he was open to that option as long as it was certain both TAA and the trade deals would pass.

Both committees were meeting to consider draft bills to implement the three agreements, each of which was originally negotiated and signed more than four years ago.

That is a traditional first step in congressional consideration of trade deals in order for the administration to ascertain lawmakers' wishes. Congress cannot amend trade agreements once the White House formally submits them.

The House and Senate panels approved the Colombia pact despite opposition from many Democrats upset it did not include an "action plan" negotiated by the White House to address concerns about anti-union violence in Colombia.

A coalition of U.S. farm and business groups renewed their call for swift approval of the deals. "For far too long, the United States has sat on the sidelines while other nations have clinched their own trade deals with South Korea, Colombia, and Panama, threatening to put American workers and businesses large and small at a competitive disadvantage," they said.

Critics say the pacts will hurt U.S. employment by boosting imports and creating incentives for American companies to move some operations to the three trade partners.

Richard Trumka, president of the 12.2 million-member AFL-CIO labor federation, has called the trade deals "the wrong medicine at the wrong time for an ailing economy."

(Reporting by Doug Palmer and David Lawder; Editing by Cynthia Osterman)

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