House and Senate panels take up 3 trade bills

July 7, 2011 - 11:29 AM

WASHINGTON (AP) — House and Senate lawmakers on Thursday wrangled over how to help American workers dislocated by trade as they took up three free trade agreements that could also create tens of thousands of new jobs in the U.S.

The two committees in charge of trade — Finance in the Senate and Ways and Means in the House — both took up draft versions of legislation to implement trade deals with South Korea, Colombia and Panama.

The Obama White House, the business community and most lawmakers support the trade deals, but getting them to a vote in Congress could be stymied by a dispute over how to handle expired sections of Trade Adjustment Assistance, a program that for more than half a century has provided retraining and financial aid to workers displaced by trade.

Senate Finance, led by Democrats, includes TAA as part of the trade bills: Ways and Means, controlled by Republicans, does not.

There were indications that a compromise was possible. Senate Finance Committee Chairman Max Baucus, D-Mont., said he did not rule out other options for extending TAA, "as long as they provide certainty that the bipartisan TAA deal will be enacted in tandem" with the free trade agreements.

Minutes later, Ways and Means Committee Chairman Dave Camp, R-Mich., said that if the White House sends up its final version of the trade bills without TAA, he would hold a vote on those bills and a separate TAA bill the same day.

The top Democrat on the Ways and Means trade subcommittee, Jim McDermott of Washington, was skeptical. If TAA "doesn't go with these agreements it will die in the Senate." The ranking Democrat on the committee, Sander Levin of Michigan, urged his colleagues to vote against all three trade deals if TAA was not incorporated.

On the Senate side, the top Republican on Finance, Orrin Hatch of Utah, said he would vote against the Korea agreement if it was linked to TAA.

TAA was created in the Kennedy administration to help workers laid off because of foreign competition. It was expanded in 2009 as part of the economic stimulus package to include service industry worker and to extend subsidies to help laid-off workers buy health insurance. Those expansions expired in February this year and the White House, joining many Democrats, has insisted that renewal of the assistance must be part of the trade bills.

Camp, Baucus and the White House recently agreed on a scaled-down plan to extend TAA. Among the cutbacks, it would reduce financial payments to TAA recipients from 156 weeks to 117. Last year more than 200,000 workers made use of the program at a cost of almost $1 billion.

All three trade agreements were signed during the George W. Bush administration, but never advanced in the then-Democratically controlled Congress.

The Barack Obama administration moved to renegotiate key elements of all three deals, gaining commitments from South Korea to improve access to U.S. autos, from Panama to change laws that fostered tax havens, and from Colombia to improve its labor rights record.

The business community has pushed for quick approval of all three, noting that South Korea finalized a trade agreement with the European Union on July 1 and that a Colombia-Canada trade agreement will go into force next month.

"U.S. farmers and ranchers, for example, have already lost more than $1 billion in sales to Colombia due to delays in approval of the agreement with that country," more than 30 business groups, including the National Association of Manufacturers, the U.S. Chamber of Commerce and the American Farm Bureau Federation, said in a letter Wednesday to congressional leaders.

Sen. John Thune, R-S.D., said U.S. wheat exports to Colombia are "going to evaporate completely" with the advent of that country's agreement with Canada.

Economists say the trade pacts, which would lower or eliminate tariffs on almost all U.S. exports to those countries, could increase U.S. exports by $13 billion a year and create tens of thousands of jobs. The deal with South Korea is the biggest free trade agreement since the 1994 North American Free Trade Agreement.

Under the unique rules for considering trade bills, Finance and Ways and Means lawmakers offer recommendations on changing draft versions of legislation to implement the pacts. The White House, after further negotiations, then will submit final versions of the bills to Congress for votes, with no amendments allowed.