U.S. trade deals could be delayed past August: Daley

WASHINGTON Tue Jul 19, 2011 9:21pm EDT

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WASHINGTON (Reuters) - President Barack Obama will soon send free-trade pacts with Colombia, South Korea and Panama to Congress for votes, White House Chief of Staff Bill Daley said on Tuesday, but doubts are building on its passage.

Daley, who last week said it was urgent Congress pass the measures before its August recess, told reporters it was possible that work on the bills could stretch beyond that.

"I don't know if (they will) be approved by August but we're moving forward on them," he said after a speech at a Commerce Department conference on the Obama administration's efforts to reform export controls on high-tech goods.

Dark clouds were also building for the FTA in Seoul, where the main opposition party has taken another step toward blocking its ratification by listing a series of points it wants renegotiated.

The Democratic Party said the Lee administration had made too many concessions to Washington in last year's renegotiated deal, but the ruling party vowed to push the deal through parliament in August.

Thousands of farmers took to Seoul's streets last month saying the FTA will allow the entry of cheaper foreign farm produce.

Both Daley and U.S. Trade Representative Ron Kirk have said quick approval of the pacts is needed to ensure U.S. exporters do not lose market share to Canada and the European Union, which have pursued their own deals with the countries.

But Obama still has not formally submitted the three agreements to Congress in the face of complaints from Republicans over a White House plan to tie an extension of the Trade Adjustment Assistance program, known as TAA, to the South Korea deal.

Work on resolving the issue has taken second stage to intense negotiations between the White House and Congress on a deal to raise the U.S. government's $14.3 trillion debt limit by August 2 and avoid a U.S. credit default.

The trade agreements were negotiated under a previous grant of trade promotion authority, which expired in June 2007.

That allows Obama to send the pacts to Congress for "yes" or "no" votes without any amendments within 90 days.

With a clear path, Congress could conceivably approve the agreements in a matter of weeks. But the closer it gets to August, the more unlikely it is the deals will be approved before lawmakers leave for their month-long break.

Trade Adjustment Assistance is a federal retraining program for U.S. workers who have lost their jobs because of foreign competition. Democrats say the program is a vital part of the U.S. social safety net but many Republicans question its effectiveness and cost.

DEALS HAVE LINGERED FOUR YEARS

The White House has negotiated a bipartisan deal to reform TAA but has not reached an agreement with Republican leaders on how to handle the legislation.

Senate Republican Leader Mitch McConnell and House Speaker John Boehner want a separate vote on TAA instead of including it in the implementing bill for the South Korea deal.

McConnell has argued renewal of TAA should be tied to congressional approval of new "trade promotion authority" for the White House to negotiate additional trade deals.

The fight over TAA is the latest snag in the long history of the pacts, all originally signed more than four years ago. Over the past years, Obama has worked to address Democratic party complaints about the pacts.

His administration has negotiated improved auto provisions for the Korea agreement and a tax information exchange treaty with Panama. The White House also crafted an action plan with Colombia to address longstanding concerns about anti-union violence and labor rights in the Andean nation.

"Today, political partisanship and gamesmanship does threaten the agreement," Daley said. "But we do remain confident with the support of the business community, Congress will put politics aside and act in the best interest of the American people."

He did not go into detail on how the impasse could be resolved but said the White House was working on the agreements and would send them to Congress "very soon."

(Additional reporting by Jeremy Laurence in Seoul; Editing by Will Dunham, Bill Trott and Ron Popeski)

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