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Ready to Deal on Trade

Business Groups Hope Compromise Saves Trade Deals

Business groups say they are willing to offer Congressional Democrats major concessions if that’s the price to pay for passage of a long list of contentious free-trade agreements. But with both sides gearing up for huge battles this year, activists against the trade agreements scoffed at what business lobbyists deemed concessions.

Trade agreement critics said they are looking to steer clear of any traps that big corporate interests might set to help get the agreements across the finish line.

“The trap is that the multinational lobbyists, and their friends in Congress, have said ‘OK, you’d like to get better labor and environmental standards? OK,’” said Alan Tonelson, a fellow with the United States Business & Industrial Council and a vocal trade critic. “The problem is, it would be very easy for them to offer a purely symbolic compromise and one that would do absolutely nothing to solve our trade problems.”

Yet lobbyists for big companies that support new agreements with countries such as Peru and Colombia say their opponents are shifting their demands in mid-debate and making it impossible to find compromise. In addition to those agreements, a bruising fight is shaping up this year over whether the Bush administration should keep its fast-track negotiating authority,

“What they’re doing is moving the goal posts, and it shows how unreasonable they can be,” said Chris Wenk, director of international trade policy at the National Association of Manufacturers. “Labor is really the prize, the main issue, and groups like NAM, we acknowledge that there are going to be discussions on that. We accept that. I fully believe that the labor unions are opposed to trade, and they do not want these agreements to move forward.”

But the AFL-CIO’s Thea Lee said her group’s demands have not changed radically. “If the business community says ‘We had no idea that labor was interested in other issues,’ it’s because they haven’t read what we’ve said,” she said.

Business lobbyists, some of whom would speak on the subject only privately, said they are willing to accept trade agreements with stronger provisions on labor, and to some extent environmental, standards. They also are urging a larger trade adjustment assistance program, which provides income, health tax credits and job search assistance to workers who lose their jobs because of trade.

While his group has no plans to link with labor or environmental groups on trade pacts, Larry Burton, executive director of Business Roundtable, said: “We want to work to find where there’s common ground.”

A corporate lobbyist who focuses on trade noted: “We’re reaching out and seriously discussing issues that have been a roadblock to trade liberalization. Business is approaching trade in a bipartisan and constructive manner. We’ve been reaching out to the Blue Dogs and New Dems.”

And it’s that approach that Tonelson said he fears most because it could give the impression that business groups are compromising and giving some of those moderate and conservative Democrats the cover they need to vote “yes” on upcoming agreements.

“The concessions that the multinational business community seem ready to make seem symbolic,” Tonelson said. “It seems amazing to me that they haven’t come around to this even sooner. But with the Republicans in control, they felt they could afford to maintain that very hard line.”

Margrete Strand Rangnes, senior Washington, D.C., representative for the Sierra Club’s responsible trade program, said her group is looking to come up with trade agreements it can support. But she indicated that getting there won’t be easy.

“There is definitely a push for this not to be just focused on labor provisions,” she said. “Whatever is the dispute settlement mechanism in other chapters of the agreement should be the same for labor and environment. Right now, we’re relegated to second-tier status.”

Brett Gibson, a trade lobbyist with the AFL-CIO, said pharmaceutical companies and other corporations already have the intellectual property and other protections they want built into the agreements. “It’s really about ‘Can they live with what we are willing to live with?’” Gibson said.

Yvette Pena Lopes, a legislative representative for the Teamsters, said she sees no hardship coming from the big business side.

When it comes to companies’ expanding support for the trade adjustment assistance program to help laid off workers, she said calling that a concession is “laughable.”

“TAA is an important program because workers have lost a lot of jobs,” she said. “But we also need to find a way to negotiate these agreements in a way that raises the standards so that our workers benefit and the other countries’ workers benefit as well.”

Lori Wallach, director of Public Citizen’s Global Trade Watch, a group that has lobbied against several recent agreements and opposes the current drafts with Colombia and Peru, said her coalition could be swayed to drop its opposition.

“The outside groups — labor, environment, poverty — we’ve all come to a point, for the Peru and Colombia agreements, if the really outrageous stuff was taken out, we’d stand down,” Wallach said.

Wallach included as “outrageous stuff” patent protections for pharmaceutical companies. Another sticking point with the Peru and future agreements is they would give companies that operate ports in those countries “an absolute right to set up business in the United States,” she said, reigniting this past year’s debate over whether Dubai Ports World should operate U.S. ports. The Dubai company operates ports in Peru, Wallach and Lopes said.

Wallach added that the concessions on labor that business groups are willing to make are ones they lived with in past agreements, including one with Jordan. But pro-free-trade lobbyists said they didn’t have to make such concessions for the past six years of Republican dominance.

“Now the business guys are running around, acting like it’s a revelation, basically trying to get credit for saying that they are unbelievably flexible,” Wallach said. “The business guys haven’t done anything new.”

As for potential deal breakers, Wenk said it was unlikely that NAM would balk at any Bush administration changes. “I know we’re going to have to move farther than we have,” he said. “We care so much about the trade agenda, and on these agreements, we are strongly encouraging these discussions to go forward.”

Wenk said NAM is boosting its lobbying operation by creating new jobs for House and Senate lobbyists.

Although the trade critics are playing defense on the upcoming pacts, they are pushing offense in support of legislation that would designate China’s currency manipulation as a violation of U.S. trade law. Lobbyists say they expect bills to be introduced in both the House and Senate this year.

Momentum for the measure, which was introduced in the previous Congress, was “created by the sentiment that got many freshmen Democrats elected,” said Ted Bush, legislative director at the International Advisory Services Group, which is part of the China Currency Coalition.

But Bill Lane, government affairs Caterpillar, indicated that big multinational companies won’t roll over on the issue.

“At a time when the two engines of world-wide economic growth are the United States and China, we think it would be counterproductive to turn them against each other and create a global recession,” Lane said.

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