Congressional leaders said on Wednesday they have agreed upon a path to approve three long-delayed free trade agreements and a program to help U.S. workers who lose their jobs because of foreign competition.As an initial matter, I must say that I'm quite pleased that it appears, for now at least, that the White House's hair-brained scheme to attach TAA expansion to the US-Korea FTA is dead. But beyond that, am I the only one baffled by the treatment of this "big" announcement as some sort of major breakthrough to the current TAA-FTA impasse? Leaving aside the basic fact that, because Congress is on
"My staff and (Senate Republican Leader Mitch) McConnell's staff have been in discussions for weeks over the Trade Adjustment Assistance (TAA) program and the three outstanding FTAs," Senate Majority Leader Harry Reid said in a statement.
"We believe those discussions have provided a path forward in the Senate after we return for passage of the bipartisan compromise on the Trade Adjustment Assistance program, followed by passage of the three FTAs," Reid said.
U.S. Trade Representative Ron Kirk also said he was "very pleased Senators Reid and McConnell have agreed on a path forward" for the trade deals with South Korea, Colombia and Panama and the TAA.
In a separate statement, House of Representatives Speaker John Boehner welcomed the deal reached by Reid and McConnell.
"I look forward to the House passing the FTAs, in tandem with separate consideration of TAA legislation, as soon as possible," Boehner said in a statement.
"The Administration looks forward to working with leaders of the Senate and House after Congress returns in September to secure approval of these important initiatives for America's working families," Kirk added.
A Republican aide said the White House had insisted on passage of the TAA in exchange for sending the free trade agreements to Congress for votes.
The deal between Reid and McConnell shows there are votes to pass the pacts and the retraining program, the aide said. Senate Republicans will be able to offer amendments to TAA, but the expectation is they will be defeated, the aide added....
The deal reached by McConnell and Reid calls for separate consideration of TAA, but Reid made clear he did not support movement of the trade deals until TAA is approved.
First, contrary to what some of my fellow trade nerds think, House passage of the TAA expansion is not a slam dunk. As Boehner's announcement above makes abundantly clear, there is no guarantee by House leadership that their chamber will actually pass a standalone TAA bill. This is because (i) the House GOP rejected a similar (albeit more expensive) expansion of TAA back in February and, after getting double-crossed by House Dems on the "May 10 deal" back in 2007 (which was supposed to ensure passage of all pending FTAs, not just the US-Peru agreement), remains extremely suspicious of any Democratic promises on FTAs; and (ii) House Democrats appear ready to oppose the FTAs until the House actually passes the TAA expansion (or provides an "ironclad" guarantee, whatever that means). The White House has made similar statements in recent days, and its response to today's Senate announcement clearly showed that the Reid-McConnell deal hasn't solved anything and that the President won't submit the FTAs until TAA expansion is a done deal.
So you have a TAA-averse House GOP who appears ready to consider (but not approve) TAA only if the White House submits FTA implementing legislation simultaneously, and you have congressional Democrats and the White House who won't move the FTAs until TAA is passed. And some of the procedural "solutions" offered to this standoff are downright laughable, for example:
A business source told BNA in an e-mail that—under one possible scenario discussed—the legislative pathway would begin with House approval of a bill to renew the lapsed Generalized System of Preferences (GSP) program. It would be followed by the Senate approving GSP and adding the TAA compromise to the bill as an amendment, the source said.Oh, yeah, this should, like, totally end well. Cripes.
According to the source, that bill would then return to the House, which would await submission of the FTA implementing bills from the Obama administration before TAA consideration. Under this scenario, the House would then hold four separate votes, one of which would be a bill including TAA, GSP, and perhaps Andean Trade Preference Act extensions—which alternatively could be included in the Colombia implementing bill. The four bills would go to the Senate for final approval.
Second, the Senate TAA deal itself faces a serious problem: amendments. The Reuters article above indicates that the Republican amendments (on things like Trade Promotion Authority or the scaling back of the TAA expansion) are likely to be defeated, but it says nothing about Democratic amendments. And as this BNA article [$] makes clear, those amendments could create serious problems:
The absence of specific language in the leaders' statements on how the amendment process will be handled led one trade analyst who spoke with BNA to conclude that these important details have not been worked out yet.So, if Senator Brown offers his currency amendment, are you telling me that, in this crappy economy and with 2012 rapidly approaching, he definitely won't be able to get sufficient support? Or are you saying that Sen. Reid will definitely be able to control the notoriously rambunctious Senator Brown who, by the way, is facing a tough re-election fight in 2012?
McConnell has said previously that he would like to attach renewal of Trade Promotion Authority as an amendment to the GSP-TAA bill, but the amendment would run the risk of not being approved.
In a statement, Sen. Sherrod Brown (D-Ohio) applauded Reid's insistence on passing TAA first and called for swift passage of the Currency Reform for Fair Trade Act (S. 328)—legislation introduced in February by Brown and Sen. Olympia Snowe (R-Maine) that would crack down on Chinese currency manipulation.
Brown and Sen. Charles Schumer (D-N.Y.) are or will be co-sponsors of each other's legislation on Chinese currency manipulation, either of which could be proposed as an amendment to the GSP-TAA bill.
“Extending Trade Adjustment Assistance is an important step to respond to job loss caused by foreign competition,” Brown said. “But addressing unfair trade practices like Chinese currency manipulation can prevent job loss by ensuring a level playing field for American manufacturers facing a flood of cheap Chinese imports.”
The Brown and Snowe measure is a companion bill to House legislation, and they are expected be co-sponsors on the yet-to-be introduced Schumer legislation.
So, to recap, we have (i) a month delay in rough economic times; (ii) an uncertain House process, replete with suspicious GOP leadership and a majority that just 6 months ago rejected TAA expansion; and (iii) an uncertain Senate amendment process that could attach a poison pill to the TAA bill. And yet, the bi-partisan Senate announcement was somehow deserving of BREAKING NEWS alerts and congressional/business backslapping?
As I've said for months now, I'll believe in congressional passage of these pending FTAs when I see it, and so should you.