US DEMOCRATS VOTE TO INDEFINITELY SUSPEND ACTION ON COLOMBIA FTA

Earlier this week, the Bush administration took a gamble: it sent a free trade agreement with Colombia to the US House of Representatives for consideration, in the face of objections from the leaders of the Democratic majority.

The administration was betting that if it forced a vote, enough rank-and-file Democrats would support the agreement to secure its passage. Alternatively, they would vote against the deal, opening the party to accusations of betraying one of the US' few staunch allies in the region.

However, the manoeuvre did not unfold smoothly. Instead, it has ballooned into an acrimonious partisan debate, with potentially significant ramifications for the future of US trade policy.

The Colombia trade deal became hostage to deep ongoing disagreements between the White House and Congressional Democrats on issues such as a potential domestic economic stimulus package, aid to workers, and spending in Iraq.

TPA process compromised?

On 10 April, House Democrats overwhelmingly backed a successful 224-195 vote to eliminate rules requiring Congress to approve or reject the Colombia FTA within 90 legislative days, thus indefinitely postponing any action on the agreement.

This is significant, since the Colombia FTA was negotiated under the Bush administration's 'trade promotion authority' (TPA), which expired in mid-2007.

Countries seeking to finalise trade deals with Washington are generally keen for US presidential administrations to receive such a 'fast-track' mandate from Congress, which allows them to put trade deals to lawmakers for expedited consideration and a yes-or-no vote without the possibility of amendments.

But this week's vote may have shaken other countries' faith in the credibility of the TPA process, suggested Kim Elliott, a joint senior fellow with the Center for Global Development and the Peterson Institute in Washington. "This reveals the dirty little secret that the TPA is not really a law. It's a rule in the House, a rule that the House can change."

"This is one of the big costs of the administration's gamble to introduce the agreement [in the House] without [Speaker Nancy] Pelosi's assent, if not endorsement," she told Bridges. "A country negotiating with the US has to wonder, 'can the president deliver what he or she promises'?"

Administration, Democrats trade criticism

The administration was harshly critical of the House vote. President George W. Bush called it "unprecedented and unfortunate," saying that it was "damaging to our economy, our national security, and our relations with an important ally."

"Today's action by the House of Representatives also sends a damaging message to the world that Congress cannot be counted on to keep its promises," he continued.

Speaking from Crawford, Texas, Bush accused the House of severing a decades-old "bond of trust" between Congress and the executive. "In order to negotiate trade agreements, we empower our trade representatives with the promise that Congress will consider trade agreements with a timely up-or-down vote. By breaking this bond, Democrats have undercut not just this administration, but future administrations as well."

US Trade Representative Susan Schwab said that the House had chosen to change the trade promotion authority rules "in the middle of the game."

Administration officials stressed that the bilateral FTA would benefit US farmers and workers by instantly easing access for exports to Colombia; most Colombian products already enter the US market duty-free under a unilateral preference scheme.

Democratic leaders stressed their support for Colombia, and argued that they had been compelled to remove the timeline by the Bush administration's attempts to force the issue without seeking a compromise with the House.

Pelosi said that she had asked Bush to consider steps to address "the economic concerns of America's working families," which are facing declining incomes and rising costs of living, before putting the trade agreement to Congress.

"This rule is necessary because the president violated protocol under trade promotion authority that has served so well in the past," said Representative Charles Rangel of New York, who chairs the powerful Ways and Means Committee. "He specifically ignored the views of this body, instead choosing to take a gamble and demand a vote within 90 days."

Many Congressional Democrats, including Pelosi, voted to approve a similar deal with Peru last November, after it was re-negotiated to strengthen provisions on labour, environment, and access to medicine, in line with a May 2007 trade policy compromise between Democratic leaders and the administration (see BRIDGES Weekly, 14 November 2007, http://www.ictsd.org/weekly/07-11-14/story3.htm).

Even though it was similarly re-negotiated, the Colombia deal is more problematic, since the country's high (though significantly declining) rates of violence against labour leaders have earned the FTA the opposition of US labour groups, a key Democratic constituency. While Democratic presidential nominees Barack Obama and Hillary Clinton supported the Peru agreement, they have both expressed opposition to the Colombia FTA.

The Centre for Global Development's Elliott said that there was a "perfect storm" of circumstances making it complicated for the Democrats to support the Colombia FTA at this time.

If elections had not been imminent, she suggested, the Colombia deal might have received just enough Democratic support to narrowly pass on foreign policy grounds, since the country is a US ally and a bulwark against Venezuelan President Hugo Chavez's attempts to increase his influence in the region. However, in an election year, US unions opposed to the deal "cannot or will not let the Democrats off the hook." By the same token, the Democrats cannot ignore the unions who provide them both financial contributions and organisational muscle.

Furthermore, the "bad luck" of the Democratic presidential primary calendar has meant that the Colombia FTA debate has taken place against the backdrop of crucial, high-profile, votes in Ohio and Pennsylvania. The two rust belt states have lost many manufacturing jobs in recent years, in part due to overseas competition, and both candidates have sounded critical notes on trade, particularly the North American Free Trade Agreement (NAFTA), in an attempt to win support.

The Congressional Democrats' recent move may be a function of these circumstances as much as of conviction: analysis in the New York Times suggests that as many as 50 House Democrats might ordinarily have been tempted to vote for the Colombia FTA, but that they were keen to avoid a divisive vote at this juncture.

Colombia FTA may still be considered

Democrats are not ruling out that the Colombia deal could come up in Congress this year, potentially after the 4 November elections, especially if the White House is more responsive to their economic agenda.

"The President's attempt to force a vote on the Colombia agreement has produced the opposite result," said Max Baucus of Montana, who chairs the Senate finance committee. "With the Colombia agreement in a holding pattern, the most productive thing to do now is to focus on what is right for America's workers, and work together on solid expansion of Trade Adjustment Assistance [for workers displaced by globalisation]. Once that's done, we should consider the Colombia agreement on its merits."

Representative Rahm Emanuel (Democrat-Illinois) said that "a new deal for the new economy for the American worker" - involving more support for healthcare, college, pensions, and other economic security measures - would help ensure that trade deals are "not seen as a cost to the American people, but seen as an opportunity to succeed" in the globalised economy.

As for the struggling Doha Round of multilateral trade talks at the WTO, analysts differ on the potential implications of the House vote. Some believe that if governments can wrap up an accord this year - very far from a sure thing - any future administration would find it difficult to make more than minor adjustments to it. Others disagree, suggesting that recession fears in the US would make any Doha deal vulnerable to a contentious debate on the benefits of trade liberalisation.

ICTSD reporting; "House Votes to Delay Colombia Trade Pact," REUTERS, 10 April 2008; "Partisan Tangle Over Trade Pact With Colombia," NEW YORK TIMES, 10 April 2008; "Democrats Stall Trade Pact With Colombia," NEW YORK TIMES, 10 April 2008; "Clash of the Titans," NATIONAL JOURNAL, 10 April 2008; "¿Qué futuro le espera al TLC después de su congelación en el Congreso de E.U.?", EL TIEMPO, 10 April 2008.