USTR says deal needed before sending trade pacts

WASHINGTON Thu Jul 21, 2011 7:54pm EDT

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WASHINGTON (Reuters) - President Barack Obama's administration on Thursday fended off Republican demands that it send three long-delayed free trade pacts to Congress for approval, saying it first needed more assurance that a retraining program for displaced workers will be extended.

Senate Republican leader Mitch McConnell urged Obama to transmit the trade deals with South Korea, Colombia and Panama even though Congress would not have time to complete action on the agreements until after the August break.

"I think the administration should submit them anyway as a show of good faith with our trading allies in Korea, Colombia, and Panama. Then we can work to pass them when we return," McConnell said in a speech on the Senate floor.

The Obama administration responded that it wanted a detailed commitment from congressional leaders that the Trade Adjustment Assistance (TAA) program, which many Republicans oppose, would get a vote when the trade deals are considered.

"We're ready to move. What's needed now is a commitment on specifics from the leadership of both houses for a viable process for the passage of the three FTAs and TAA," an administration official said.

"We're in active discussion with congressional leaders. We hope we can reach agreement as soon as possible."

The White House had hoped to pass all three trade deals before the August break, but the disagreement with Republicans who question the cost and effectiveness of the worker retraining program complicated that.

McConnell said from his point of view "every sticking point" on TAA had been resolved.

He said he was personally committed to working with Senate Majority Leader Harry Reid to ensure "a fair floor process" that would allow senators to try to amend a TAA bill separate from the three free trade agreements.

"That way, if the administration can generate the votes it needs, the TAA bill will pass on its merits," he said.

Senator Rob Portman and 11 other Republican senators have already signed a letter agreeing to support TAA if it is submitted separately from the South Korea pact.

Portman said the 12 Republicans combined with the 53 Democratic votes in the 100-member Senate would shield the program from Republican efforts to block action on it.

In addition, Republican House of Representatives Speaker John Boehner has promised a separate vote on TAA even though the majority of House Republicans oppose the program, Portman said.

COMPETITION

On Wednesday, Portman urged Obama to submit the agreements in time for them to be approved by August. But McConnell said the tight legislative calendar made that unrealistic.

Supporters still hope a deal can be reached this month on a process for considering TAA and the trade deals so lawmakers can quickly turn to the legislation in September.

Portman was U.S. trade representative in the administration of former President George W. Bush and launched negotiations on the South Korea trade pact. The deals with Colombia and Panama also date back to the Bush years.

Portman argued Congress should pass the deals now because the United States was already losing sales in South Korea because of a rival EU-South Korean free trade agreement that went into force on July 1.

Another pact between Canada and Colombia that goes into effect in August also threatens U.S. exports, he said.

TAA is a nearly 50-year-old retraining and income assistance program for workers who have lost their job because of foreign competition.

Many Republicans object to the White House plan to include a TAA extension in the implementing legislation for the South Korea agreement, instead of allowing lawmakers a separate vote on the program.

Democrats view TAA as a vital part of the U.S. social safety net and fear the extension will be killed by Senate opponents if not shielded by the South Korean pact.

(Editing by Doina Chiacu, Eric Beech and Mohammad Zargham)

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