Blocking Freer Trade

Senate shenanigans are mucking things up.

'Congress can advance trade agreements that will help businesses sell more America made goods and services to Asia and South America, supporting thousands of jobs here at home.

That could be done right now."

So said President Obama at the White House on Friday on behalf of prompt passage of the South Korea, Colombia and Panama free trade agreements as a way to spur job creation.

For someone whose 2008 campaign promises included backtracking on Nafta and blocking any new trade liberalization, Mr. Obama's new rhetoric rings of an epiphany.

Yet how serious are Democrats about getting these deals through Congress?

The answer seems to depend on how much spending they can get from Republicans.

All three deals were signed during the Bush Administration, but when Mr. Obama took office he insisted that they be renegotiated.

This meant imposing new demands on Seoul, Bogotá and Panama City.

Colombia has since twice made new concessions that will raise the costs of its exports.

Yet even that wasn't enough. 

 

In May the Administration broke the news that the President would not send the agreements to Congress for an up or down vote, as the rules for these deals dictate, without the Big Labor priority of "trade adjustment assistance" as expanded in the 2009 stimulus.

That law cost taxpayers billions of dollars on a program with few results, so Republicans balked.

But House Ways and Means Chairman Dave Camp, (R., Mich.), whose state is the largest recipient of TAA payments, stepped up to negotiate with the White House and Senate Finance Chairman Max Baucus.

Their late June compromise allows for the survival of a scaled-down TAA through 2014.

Qualified applicants will still receive up to 130 weeks of income support, a health-coverage tax credit of 72.5% of premiums and job training.

Mr. Camp's office says the plan's cost is roughly $960 million for three years, as opposed to $770 million per year for five years if the 2009 bill were renewed.

Substantial portions of the program sunset at the end of 2013, all spending is offset with spending cuts, and the whole of TAA sunsets after 2014.

Everybody gives up something here, which used to be the way things got done in Washington.

But even as the ink was drying on the deal, Mr. Baucus changed some details and attached his version of the TAA deal to the Korea pact.

This ensures that his version can't be amended, and the Beltway suspicion is that he's doing a favor for Big Labor, which fears that TAA might fail as a stand alone bill.

But this hurts the prospects for the trade deal because Republicans in both chambers want TAA to be debated on its own.

House Speaker John Boehner has said he'll hold separate floor votes on the trade deals and TAA.

This seems fair since it lets the Members work their will on two distinct issues.

But since two different versions of the trade agreements can't be submitted to Congress by the President, Mr. Baucus's machinations have put the deals in limbo.

This is a good time to consider what's at stake. A Canada-Colombia trade agreement goes live on August 15 and the E.U.-Korea trade pact went into effect on July 1.

This means that American producers including Montana ranchers and wheat farmers will find that their exports are less competitive while Mr. Baucus fiddles with TAA. Is Washington so dysfunctional that it can't even pass something that both sides agree on?