October 5, 2011 / 9:16 PM / in 8 years

UPDATE 4-US trade pacts clear first hurdle on way to approval

* Republicans, Obama say pacts would help create U.S. jobs

* South Korean pact is biggest trade agreement since NAFTA

* Full House approval seen next week (Updates timing of expected votes in paragraphs 8-9)

By Doug Palmer

WASHINGTON, Oct 5 (Reuters) - Long-delayed U.S. trade deals with South Korea, Colombia and Panama cleared a congressional hurdle on Wednesday and looked set to get quick final approval to end years of trade policy paralysis by Washington.

The three pacts are expected to boost U.S. exports by about $13 billion a year and President Barack Obama’s administration estimates they will help create tens of thousands of jobs.

The United States has lagged the European Union, Canada and the three potential new U.S. free trade partners which have all moved aggressively to strike new market-opening pacts.

The chairman of the House of Representatives panel which backed the deals on Wednesday, Representative Dave Camp, said they could not come at a better time for the struggling U.S. economy.

“With zero jobs created last month and the unemployment rate hovering above 9 percent, we must look at all opportunities to create American jobs,” Camp said.

The three pacts must be approved by the full House and the Senate to become law. The panel backed the pacts on the following bipartisan votes: Colombia, 24-12; Panama, 32-3; and South Korea, 31-5.

Camp said he expected the full House to approve the trade deals next week. The Senate also could move quickly enough for the pacts to be approved in time for South Korean President Lee Myung-Bak’s visit to the White House on Oct. 13.

An industry source, speaking on condition he not be identified, said congressional leaders were working on a plan for the House and the Senate to both vote on Oct. 12.

There was no immediate confirmation of that, which would require Senate Finance Committee action on the pacts first. One Senate aide said talks were still under way.

With the U.S. economy growing too slowly to bring down a 9.1 percent unemployment rate, the administration and Congress are facing pressure to work together to create jobs.

As the House moved forward with the deals, the Senate was pushing a bill to crack down on China’s currency practices, which lawmakers blame for millions of lost U.S. jobs. Beijing has warned that legislation could spark a trade war. [ID:N1E7941L6]


The deal with South Korea is the largest U.S. trade pact since the North American Free Trade Agreement went into force in 1994 and is expected to account for most of job gains.

U.S. farmers are expected to be big winners under the agreements. The American Farm Bureau Federation estimates U.S. farm exports could increase by more than $690 million per year to Colombia, more than $195 million per year to Panama, and more than $1.8 billion per year to South Korea.

U.S. manufacturing and services companies also broadly support the agreements, which will phase out tariffs and other barriers to U.S. exports.

Import-sensitive sectors such as steel and textiles oppose the trade pacts, fearing they will lead to lost jobs.

Obama submitted the pacts to Congress on Monday, after a final assurance from House Republicans that a separate income assistance and retraining program for workers displaced by trade would be put to a vote alongside the pacts.

Obama has touted the deals as a vital part of his effort to revitalize the stagnant U.S. recovery and generate new jobs, considered crucial to his 2012 re-election chances.

The three pacts would be the first trade deals passed since late 2007, when Congress approved an agreement with Peru.

The last of nearly a dozen agreements negotiated under Republican President George W. Bush, the deals hit a brick wall after Democrats won control of the House in November 2006.

Union groups objected to the pacts fearing they would shift jobs overseas.


Obama, who had opposed the pacts as a presidential candidate but came to embrace them once he won the White House, has sought a number of changes to build broader support.

The administration this year negotiated a labor “action plan” with Colombia to try to address concerns of U.S. labor groups over the killing of labor leaders in Colombia. Despite that effort, many Democrats and the AFL-CIO labor federation still stand in opposition to the pact.

The White House also negotiated better terms on autos in the South Korea pact to win over Ford Motor Co (F.N) and auto workers, who complained the deal failed to knock down longtime barriers in that market while opening the United States for more imports.

“These new provisions provide Ford greater confidence that we will be able to better serve our Korean customers,” Ford CEO Alan Mulally said after the revised deal was reached.

The Obama administration also worked out a tax information exchange agreement with Panama to address concerns about investors using the country’s bank secrecy laws to avoid paying U.S. taxes. (Editing by Mohammad Zargham and Cynthia Osterman)

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