A Disconnect on Free-Trade Deals

Posted July 1, 2011 at 5:20pm

Republicans are finding out the hard way that in Washington, even the best of friends can occasionally find themselves on opposite sides of the fence.

Congressional Republicans fought side by side with the business community against the Obama administration’s domestic agenda for more than two years and in 2010’s epic electoral battle that brought the GOP back to the majority in the House.

But some House and Senate Republicans now find themselves squaring off not only against Democrats and labor unions but also against the U.S. Chamber of Commerce, Business Roundtable, Amwalserican Farm Bureau Federation and other traditional business allies who support packaging long-stalled free-trade agreements with reauthorization of the economic recovery program known as Trade Adjustment Assistance.

“The business community wants to get these trade agreements and TAA done, and they’re pushing to do it,” a senior Democratic Senate aide said Friday, noting that business groups are actively lobbying Republicans to back the package. “They don’t want partisanship to stand in the way,” the aide said.

Antonia Ferrier, a spokeswoman for Senate Finance ranking member Orrin Hatch (R-Utah), downplayed any significant divisions between the business community and Republicans.

“We share the business community’s goal of passing these three essential, job-creating trade agreements. There is no sunlight there. Sen. Hatch also has a responsibility to ensure that the minority’s rights are protected and to raise the alarm when the process is being abused to pass an unrelated spending measure,” Ferrier said Friday.

Privately, however, Republicans acknowledged that the business community does not share the GOP’s fervor for blocking spending under TAA — and simply want the agreements passed at any cost.

“They don’t care how they happen … we get it,” one aide said. But “there are reasons why we need to stand up and say this is not OK. … We have other more long-term things we need to think about.”

The divisions between the two sides came to the fore last week when Finance Chairman Max Baucus (D-Mont.) announced a deal to move forward with the South Korea, Colombia and Panama trade pacts. The deal would also include a version of TAA similar to one included in previous stimulus packages, aides said. Baucus said last week that all four programs need to move together, or not at all.

Although the trade deals have bipartisan support, TAA has been another matter. Democrats, labor unions and Rust Belt Republicans such as Ways and Means Chairman Dave Camp (Mich.) have long supported TAA, which provides funding for job training and other redevelopment in communities affected by trade deals.

But conservatives dismiss it as spending that needs to be reduced.

Baucus’ deal was met with opposition from Hatch and other Republicans.

In a speech at the American Enterprise Institute last week, Hatch said, “Let me be blunt. The decision to jam TAA into the Korea agreement … is a process foul. Moreover, as a matter of substance, TAA is a deeply controversial spending program.”

“Between an ugly process and questionable policy, you have some very ticked off Republicans on the Finance Committee,” Hatch added.

Those comments were in stark contrast to the sentiments of business organizations that praised the pairing.

“There really can be no more excuse for inaction. … If jobs are really a priority for the Administration and Congress, then enacting these job-creating agreements must also be a priority,” Business Roundtable President John Engler said in a statement.

“Support for a broad, positive trade agenda enjoys a long bipartisan tradition in Congress, as do such programs as Trade Adjustment Assistance, the Generalized System of Preferences and the Andean Trade Preference Act. Business Roundtable continues to believe in the merit of these programs,” Engler added.

U.S. Chamber of Commerce CEO Tom Donohue’s statement was remarkably similar. “In addition to broad support in Congress for the pending trade agreements, there has historically been bipartisan support for Trade Adjustment Assistance, the Generalized System of Preferences, and the Andean Trade Preference Act.”

“Likewise, the Chamber continues to support all three of these programs … I urge members of both parties to seize a reasonable compromise and move the trade agenda forward. The time to act is now.”

The trade agreements have been stalled for years, despite bipartisan support. First pushed by the George W. Bush administration, Congress has struggled to complete the deals.

Republicans have been pushing the Obama administration for months to resubmit the treaties for approval — the first step in the process — but the White House has resisted while Baucus sought to craft a deal to also move TAA.

And for business groups, the timing of the deals has become an increasing concern, as European nations have begun implementing their own agreements with South Korea and other nations, giving their companies a competitive advantage. Business and agriculture organizations have said the agreements would be an economic boon to the nation, estimating more than 100,000 new jobs could be created.