Trading places

In recognition of the shift in power in Congress, President Bush reached out to Democrats in May by agreeing to incorporate labor and environmental standards in pending and future free trade agreements (FTA). Since the 1993 fight over the North American Free Trade Agreement (NAFTA), Democrats had been battling for just such an outcome.

House Ways and Means Committee Chairman Charlie Rangel called it a “truly historic breakthrough.” But the only concession the newly empowered Democrats gave the president was their willingness to look favorably upon the pending FTAs with Panama ($26 billion GDP, based on purchasing power parity) and Peru ($186 billion GDP). Conspicuously absent from this “truly historic breakthrough” was any agreement to support the FTAs with the much larger nations of Colombia ($375 billion GDP) and South Korea ($1.2 trillion GDP). Nor was there an agreement to extend the president’s trade-promotion authority (TPA), which facilitates the negotiation of trade agreements by precluding amendments by Congress, which must cast up-or-down votes.

With TPA scheduled to expire on June 30, Trade Representative Susan Schwab approached all four nations and effectively obtained agreements to include the labor and environmental standards that Democrats had been demanding for years. On June 29, the day before she would finalize the agreement with South Korea just in time to conform with the TPA deadline, House Speaker Nancy Pelosi, Mr. Rangel and several other senior Democrats announced that they will oppose the agreement with Colombia and South Korea. In their statement, the Democrats further declared that their legislative priorities “do not include the renewal of [trade-promotion] authority.” In other words, the Democratic Party is prepared to pursue a protectionist agenda dictated by the AFL-CIO.

In the long, tough negotiations with South Korea, the American side did not leave the table achieving every goal on its agenda. Still, major progress was made in opening South Korean markets, including autos. However, when Detroit and the United Auto Workers failed to get everything they wanted, Democrats deep-sixed what would have been the largest FTA since NAFTA. Democrats snubbed Colombia, one of our strongest Latin American allies, because they don’t give 100 percent approval to the campaign of the very popular, democratically elected President Alvaro Uribe to defeat the narco-trafficking, politician-murdering rebel-terrorist group known as FARC.

Mr. Rangel will soon be visiting Peru and Panama to ensure their legislatures pass the labor and environmental standards before Democrats will consider the mutually beneficial FTAs. Now, that will be “historic.”