Wary states resist free-trade deals

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The Bush administration is facing increasing resistance as it tries to persuade state governments to open up their contracts to foreign competition in free-trade deals.

State officials are concerned the deals, with a growing list of countries, will erode their sovereignty and ability to set wage, environmental, "Buy American" and other standards in taxpayer-funded contracts.

"We have procurement laws and environment laws that spell out how things must be done, including how much workers must be paid. All of these things could be overturned or ignored in a trade agreement," said Maryland Delegate Pauline H. Menes, a Democrat representing parts of Anne Arundel and Prince George's counties.

Mrs. Menes and state Sen. Paul G. Pinsky, Prince George's Democrat, introduced separate bills to limit the governor's ability to sign on to any free-trade agreement, and to require that work on state contracts be performed inside the United States.

The bill curtailing the governor's powers has passed both houses, and Mrs. Menes said she expects approval on the second bill as soon as today.

Both are likely to be vetoed by Gov. Robert L. Ehrlich Jr., a Republican. It is not clear whether the legislation has enough support in the House and the Senate to override a veto.

Mr. Ehrlich last week had not taken a position on the bills. He was one of the 21 governors to open some state contracts in the Central American Free Trade Agreement (CAFTA), the pact with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic that is awaiting congressional approval. Several agencies would be open to competition on procurement contracts worth at least $477,000 and construction contracts worth $6.7 million. In return, Maryland companies could bid on some local-level contracts in the six countries.

Mr. Ehrlich is not responding to a January letter from the U.S. Trade Representative's Office on proposed agreements with Panama, Colombia, Ecuador and Peru until Mrs. Menes and Mr. Pinsky's legislation is approved or defeated, a state spokeswoman said.

Robert B. Zoellick, who was U.S. trade representative until February, in January wrote the 50 governors explaining that opening state contracts to competition from the four Latin American countries would ensure reciprocal access to "subfederal" contracts with the new free-trade partners.

"In particular, I wanted you to be aware that a new U.S. government policy will provide increased market-access opportunities to your state suppliers and workers if your state chooses to cover some of its procurement," Mr. Zoellick wrote.