The Bush administration reached
agreement on Thursday with the House speaker, Nancy Pelosi, and other
Democrats to attach environmental and worker protections in several
pending trade accords, clearing the way for early passage of some pacts
and improving prospects for others.
The unusual agreement, which came after
weeks of negotiations, would guarantee workers the right to organize, ban
child labor and prohibit forced labor in trading-partner countries. It
would also require trading partners to enforce environmental laws already
on their books and comply with several international environmental
agreements.
While the understanding was a victory
for Democrats, it also represented a shrewd compromise by the White House.
The agreement is the first major bipartisan economic deal to emerge since
Democrats took control of Congress in January. It has immediate importance
for four countries -- Colombia, Panama, Peru and South Korea -- that are
seeking to enter into trade pacts with the United States.
But officials in Washington predicted
that the agreement’s effect would go beyond those countries and could be
a template for all trade deals, including a possible worldwide accord.
Administration officials are hoping
that the agreement will cause many Democrats to support future trade
deals. They hope that enough Democrats will join with Republicans, who
generally support such measures, to make passage of the agreements
probable, if only narrowly.
The negotiations were led on the
administration side by Susan C. Schwab, the top trade envoy, and Treasury
Secretary Henry M. Paulson Jr., and on the House side by Representative
Charles B. Rangel, Democrat of New York and chairman of the Ways and Means
Committee.
“I think today is a recognition of
the results of the November election,” Ms. Pelosi said at a news
conference. “It doesn’t mean that this paves the way for trade
agreements where we have other obstacles. But where it comes down to labor
standards and environment, this is enormous progress.”
Ms. Schwab said that the agreement
would send a message to trading partners that the United States was
prepared to provide new impetus to the faltering talks for a global trade
accord.
Democrats have been pressing for
worker, environmental and other protections on trade deals without success
since President Bush took office in 2001. The absence of such protections
has meant that when lawmakers passed measures that lowered trade barriers,
they generally did so without the support of Democrats.
In the 1990s, President Bill Clinton
was able to get only 40 percent of his fellow Democrats to endorse the
North American Free Trade Agreement, and about 60 percent to support a
global trade agreement. Since then, many Democrats have soured on measures
to lower trade barriers.
The breakthrough came as the
politically sensitive trade deficit jumped in March to $63.9 billion, or
10 percent more than February’s revised deficit of $57.9 billion,
putting the imbalance at its highest level in six months.
The report, issued by the Census
Bureau, followed a trend that economists have observed for months: even as
growth slows in the United States, expanding economies abroad are creating
a need for American exports. In March, exports totaled $126.2 billion, up
$2.2 billion from February. Those gains were not enough to offset an $8.2
billion rise in imports, which totaled $190.1 billion.
Thursday’s compromise affects four
trade deals pending before Congress, two of them signed and two with
negotiations that are nearly complete. All four countries would have to
accept the provisions agreed to with the Democrats, but trade officials
said they expected no major problems.
Peru and Panama are considered most
likely to win early Congressional approval. Colombia is more problematic,
because Democrats are demanding that, besides the new measures, more
protections be added to prevent violence against activists trying to
organize workers.
The South Korea accord, if put in
place, would lead to the largest amount of increased trade. But it is
opposed in its current version by Democrats who want greater access to
that country’s markets for American beef, automobiles and auto parts.
Spokesmen at the National Association
of Manufacturers and other business groups hailed the understanding, but
said they wanted to study its provisions before endorsing its details.
Democrats have been most wary of two
administration trade priorities: concluding the global negotiations known
as the Doha round, named after the city in Qatar where the talks began six
years ago; and extending Mr. Bush’s power to negotiate trade deals on
which Congress gets only an up-or-down vote.
This negotiating authority, known in
Washington shorthand as fast track, has been vigorously opposed by
Democrats, who say that they cannot imagine giving Mr. Bush open-ended
negotiating authority.
But Mr. Rangel said he could imagine a
limited extension of such negotiating authority if the Doha round talks
looked as if they were shaping up to be a good deal for the United States.
Democrats representing the older
industrial regions, where jobs have been lost because of imports of cheap
textiles, shoes, machinery and other products made in Asia and Latin
America, have generally been opposed to free trade deals.
But others in the party are more open
to trade. This group tends to represent high-technology and financial
services industries, which are eager to gain markets in fast-growing third
world countries.
In addition, farmers have become
proponents of trade deals now that a large share of farm products are
being exported. But lawmakers from farm areas have been skeptical of the
administration’s record in negotiating trade pacts, insisting that they
will not support them unless Europe and India open their markets.
Ms. Schwab said the accord announced
Thursday would help in her talks at the World Trade Organization aimed at
reaching an agreement opening barriers for farm goods, industrial products
and services. Those talks involve Brazil, India, the United States and the
Europeans.
Ms. Pelosi announced the trade deal
with an unusual array of Republican and Democratic lawmakers and
administration members at her side, including Ms. Schwab and Secretary
Paulson.
The compromise appeared to be a
striking tableau at a time of bitter partisan battles in Congress and with
the administration over Iraq, actions by Attorney General Alberto
Gonzales, budget issues, Social Security and Medicare.
What it seemed to show is that, on
trade, a coalition of lawmakers from states that stand to gain more from
increased exports than they lose from increased imports can come together
if each side’s interests are accommodated.
Originally, the administration had
opposed the labor standards, arguing that they would provide a backdoor
attempt to change American labor laws. It envisioned trading partners
suing to overthrow American curbs on union shops and teenage employment on
farms and in summer jobs. These concerns appeared to fade in the face of
prospects of not getting any trade deals through Congress this year.
In addition to the labor and
environmental provisions, the pact would make it easier for generic drugs
to be sold in foreign countries; preserve the right of the United States
to bar foreign companies from running American ports; and ensure that
foreign investors will not have more rights than American investors
domestically. There are also promises to step up training of workers who
lose their jobs because of imports.