New Dems try to kick-start stalled free-trade agenda

Rep. Adam Smith (D-Wash.) was pleased with the deal Democratic leaders and the Bush administration reached in May that appeared to pave the way for bipartisan votes this summer on a free trade agreement (FTA) with Peru.
But a little more than two months later, Smith said he’s unsure whether the House will actually pass any trade deals this year, even if they include the tougher labor and environmental language the administration agreed to in May, which Smith hailed.

“Now I am worried about whether we’ll actually pass trade agreements with that language,” said Smith, who is a vice-chairman of the House New Democrat Coalition. The group has traditionally supported free trade and won support from industries that depend on exports.

{mosads}He’s also concerned that he’s hearing no talk of an extension of fast track authority, which makes it easier for the administration to negotiate trade deals, ever since it expired on June 30.

Although New Democrats opposed the Central American Free Trade Agreement in 2005 and have not always been reliable supporters of the Bush administration’s trade agenda, they represent a wing of the Democratic Party that believes open markets and free trade strengthen the U.S. economy. They were instrumental in moving the North American Free Trade Agreement through Congress and continue to have solid ties with business groups that favor free trade.

But today, they are more isolated as their party becomes more skeptical that free trade is sparking jobs and growing the economy. The only trade legislation that appears to be moving forward in the current Congress are bills that could lead to higher duties on imports from China.

Smith blamed distrust of President Bush for much of the stalled trade agenda, and said he has heard doubts within his party that Bush will enforce tougher labor and environmental language. But he noted that Bush will only be president for another 18 months and said all trade deals should not have to wait for him to leave office.

Former Rep. Cal Dooley (D-Calif.), a New Democrat founder who now lobbies for the Grocery Manufacturers/Food Products Association, believes a stalled trade agenda could hurt the Democratic Party, and particularly New Democrats.
They were expected to talk about floor votes on free trade deals during a regular meeting of their caucus early yesterday evening,

In an interview with The Hill, Dooley said Democrats in Congress risk “political vulnerability” if Republicans can portray them as protectionist and capitalize on a stalled trade agenda. “The majority of the public understands that a protectionist policy is not in the interest of the U.S. economy,” he said.

Dooley also said Democrats could stand to lose the support of trade-friendly businesses that have traditionally been strong supporters of New Democrats, such as high-tech companies.

However, New Democrats are also under pressure from groups on the left, which are criticizing them for supporting any trade deals.

Lori Wallach of Public Citizen’s Global Trade Watch said there is a greater political downside for Democrats who support Bush trade agreements than for those who vote no and risk losing funding from corporate interests. She also said it should be seen as a surprise that any trade deals negotiated by the Bush administration are moving forward, given the opposition from core Democratic constituencies.

Smith, whose district covers the South Puget Sound region near Seattle, said opening foreign markets is important to high-tech companies. But he indicated he isn’t concerned that high-tech groups will cut off their donations to Democrats based on perceptions that the party is stalling the trade agenda.

Instead, he said, he will continue to talk to congressional leadership about trade because he thinks it is the right policy.
“I’m concerned about the trade agenda because I think it’s good for the economy to move forward,” Smith said.

Fellow New Democrat Rep. Jane Harman (D-Calif.) also acknowledges that trade is a “tricky” issue given public worry that open trade policies have led to an outsourcing of jobs. But she continues to describe herself as a pro-trade Democrat, and said the right policy is to support trade agreements while complementing them with stronger trade adjustment assistance, which helps workers hurt by trade deals get training for a new job.

Concerns about the stalled trade agenda have intensified in the business community in the wake of a July 2 statement from Democratic leaders, including House Speaker Nancy Pelosi (Calif.) and Ways and Means Committee Chairman Charles Rangel (N.Y.).

That statement signaled a House vote on the Peru FTA would be put off until autumn. It also said a renewal of fast track was not a legislative priority for Democrats, and that deals with Colombia and South Korea could not be supported in their current form.

The announcement was a huge disappointment to pro-trade business groups, who had hoped to win House approval of the Peru FTA before the summer break. But it was seen as a victory by labor, and the AFL-CIO praised the announcement in a statement.

Rep. Jim Moran (Va.), another New Democrat, said that some of those in his party who are skeptical of trade are reflecting the concerns of their constituents, who perceive negative consequences of globalization.

But Moran said it was necessary to push trade deals forward, and insisted there is still momentum within his party toward greater free trade. He signaled deals with Peru and Panama would find support, but suggested that approval would be more difficult for the agreements with Colombia and South Korea.