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Washington Outlook Archive
James A. Morrissey, Washington Correspondent

Democrats Gear Up For Major Trade Policy Changes

By James A. Morrissey, Washington Correspondent

T he Democratic leaders of the House and Senate committees with jurisdiction over trade legislation are backing a "New Trade Policy for America" calling for far-ranging changes in trade policies that will spark considerable debate in the next few weeks and months. The trade manifesto calls for the US government, among other things, to take a hard look at bilateral and multilateral trade agreements to ensure they protect the rights of US manufacturers, workers and farmers.

While the new policy is couched in generalities at this point, as it moves toward enactment, it likely will clash with the free trade agenda of the Bush administration that under a Republican-controlled Congress had pretty clear sailing. The single most important issue will be the extension of the presidents trade promotion authority (TPA), which expires June 30. TPA, sometimes known as fast track, permits trade negotiators to reach agreements that can only be approved or disapproved by Congress without any amendments. Trade officials here and abroad believe it would be impossible to reach agreements without TPA.

The new trade policy outlines guidelines for bilateral and multilateral agreements that will: require US trading partners to adopt, maintain and enforce basic international labor standards and not just their domestic laws and practices; attack global warming by requiring countries to implement Multilateral Environmental Agreements; re-establish a fair balance to promoting access to medicines and protecting pharmaceutical innovation; ensure that government procurement practices promote basic labor rights and acceptable conditions for work; promote US national security by protecting operations at US ports; and ensure that trade agreements accord no greater rights to foreign investors in the United States than to domestic investors.

Fair Trade
The Democratic leadership is calling for agreements that protect US interests by ensuring trade will be a two-way street. It calls for addressing what it deems "massive Chinese subsidies and intellectual property violations and currency manipulation practiced in China and Japan." It also calls for opening what it sees as South Koreas closed markets to US automobiles, manufactured goods and agriculture products; and it calls for greater use of World Trade Organization (WTO) cases to break down foreign barriers to trade. The plan backs the Doha Round of trade liberalization negotiations provided it includes a major role for Congress in determining the posture of the US government.

Worker Adjustment Assistance
Legislation that would significantly expand the long-standing Trade Adjustment Assistance (TAA) Act for workers who lose their jobs as a result of import competition is gaining support in the House of Representatives. While retraining and other assistance have been available to such workers since 1974, sponsors of the legislation believe it is no longer adequate in the face of burgeoning job losses resulting from trade globalization.

The legislation, authored by Reps. Robin Hayes, R-N.C., and Mike McIntyre, D-N.C., initially was cosponsored by nine other congressmen from North Carolina; additional cosponsors now are coming forward.

A key feature of the bill is that it makes adjustment assistance available to workers affected by a shift in production in which their jobs are moved to nations that have no preferential trade agreements with the United States, including China. In addition, the legislation would provide automatic eligibility for TAA in place of the current process whereby each application for assistance is ruled on by the Department of Labor within 40 days. It would increase the Health Coverage Tax Credit (HCTC) from 65 to 80 percent and it simplifies the process for applying for HCTC. The bill calls for an increase in TAA funding authorization from $220 million to $440 million.

May/June 2007