Bloomberg News

Obama Trade Deal Touted as Republicans Balk at Worker Aid

June 28, 2011

(Updates with Camp statement in fourth paragraph, cost in ninth paragraph.)

June 28 (Bloomberg) -- The Obama administration announced an agreement for Congress to act on stalled trade accords with South Korea, Colombia and Panama, as Republicans balked at plans to incorporate aid to displaced U.S. workers.

“We now have an agreement for underlying terms” to renew a program helping workers who lose their jobs to foreign competition, White House press secretary Jay Carney said today in a statement.

The deal reached among White House National Economic Council Director Gene Sperling; Senate Finance Committee chairman Max Baucus, a Montana Democrat; and House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, doesn’t include linking the aid program with the free trade agreements, as the administration wants.

“The decision on how to move these items through the House is a matter for Republican leadership to determine,” Camp said in a statement after the deal was announced. House Speaker John Boehner, an Ohio Republican, has insisted that the aid, known as Trade Adjustment Assistance, be considered on its own.

The Senate Finance Committee said it would hold a hearing June 30 on the accords, which have been awaiting approval since at least 2007. Legislation drafted by Baucus would attach the Trade Adjustment Assistance for workers to the South Korea deal, prompting renew protests from Republicans.

Republican Resistance

“I’ve never voted against a trade agreement before, but if the administration were to embed TAA into the Korea trade agreement, I would be compelled to vote against it,” Senate Republican leader Mitch McConnell of Kentucky told reporters. It makes the debate “needlessly complicated and contentious.”

President Barack Obama reworked the three free-trade agreements completed by his predecessor, George W. Bush, in response to concerns among Democrats and some companies on issues such as labor rights and access to markets. The administration has been pushing to get the deals approved by Congress before a recess in August.

The Trade Adjustment Assistance program augments health and unemployment benefits to workers who lose their jobs because of overseas competition. As part of the stimulus bill in 2009, it was expanded to include service workers such as call-center employees. The added benefits expired in February.

Accounting for Costs

As part of the deal with Camp to extend most of the benefits through 2013, the $575 million cost will be paid for by consolidating some programs and making cuts elsewhere in the budget so that it won’t add to the deficit, according to an administration official who briefed reporters on condition of anonymity.

The official said the administration was expecting to get the aid and the trade deals through Congress even with the resistance from Republicans.

Legislation to implement the trade agreements would be given fast-track treatment, a procedure that guarantees such bills submitted to Congress by the president can’t be amended before an up-or-down vote.

“The road to this point has not been an easy one, but our economy needs these jobs and these opportunities,” Baucus said today in an e-mailed statement.

What the Senate panel announced today was a “mock markup” session, held before the administration submits the legislation, that gives lawmakers a chance to offer amendments. The administration can accept or disregard any amendments made in the hearing before sending the measure to Congress.

‘Dealt With Separately’

Boehner has long maintained that the worker aid “should be dealt with separately from the trade agreements, and that is how we expect to proceed,” Brendan Buck, Boehner’s spokesman, said in an e-mailed statement.

John Brinkley, a spokesman for the South Korean embassy, declined to comment on the agreement announced today, saying he hadn’t had an opportunity to review it. Ruby Chagui, a spokeswoman for the Colombian embassy in Washington, declined to comment. Carmen Mora, a spokeswoman for Panama’s embassy in Washington, didn’t immediately return an e-mail seeking comment.

The South Korea accord was opposed by Ford Motor Co. and the United Auto Workers union until the Obama administration negotiated to scale back reductions of tariffs. Total trade in goods with South Korea climbed to $88 billion in 2010, making the deal the biggest for the U.S. since the North American Free Trade Agreement with Mexico and Canada in 1994.

--With assistance from Laura Litvan in Washington. Editors: Joe Sobczyk, Leslie Hoffecker

To contact the reporters on this story: Mark Drajem in Washington at mdrajem@bloomberg.net: Kate Andersen Brower in Washington at kandersen7@bloomberg.net.

To contact the editors responsible for this story: Larry Liebert at lliebert@bloomberg.net; Mark Silva at msilva34@bloomberg.net


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