Wednesday, January 16, 2008

Playing Politics With Trade Policy is a Dangerous Game for the 110th Congressional Majority

Trade's fleeting high tide

Washington Times January 16, 2008

By J.T. Young - As the 110th Congress comes back to Washington, it may not have free trade agreements on its agenda. This may seem surprising since Congress overwhelmingly approved America's free trade agreement with Peru less than two months ago. Yet it is likely that trade legislation will recede even more rapidly this year than it rose last year.

The makeup of Congress' Peru vote clearly show the issue's undercurrents and political obstacles below the surface. The largest pro-trade vote in years may well be the only one in this Congress. Despite 285 votes in favor — 88 percent of Republicans and the highest Democratic total since the 2004 vote on the Morocco FTA (free trade agreement) — the House remains trade's congressional chokepoint. In the last Congress, the House passed CAFTA (Central American Free Trade Agreement) in 2005 by just 217-215.

Legislation granting Vietnam permanent normal trade relations failed in November 2006 (under a special procedure, it needed two-thirds support and received just 228 of 435 votes). Comparatively, the Peru FTA was a landslide, but submerged beneath the swell of support remained the shoals threatening trade legislation.

Despite solid leadership support, only a minority of the majority Democrats supported it — 109 in favor and 116 against (8 not voting).Even more important, 30 of 43 freshman Democrats opposed it. This point is particularly important because the Democrats' majority rests on these first-term members and freshman are historically the most vulnerable incumbents.

White House politics is just as threatening as tight House politics. The current partisan presidential split on trade resembles the last Congress'. The top tier Republican candidates for most of last year — Rudolph Giuliani, John McCain, Fred Thompson and Mitt Romney — all support a conventional pro-trade agenda. Recent national polls show them with roughly 65 percent of Republican support.

The top tier Democrats — Hillary Clinton, Barack Obama and John Edwards — oppose a conventional trade agenda. Together they poll more than 80 percent of Democratic supporters.

Why would Democrat leaders want to invite another FTA to the House floor under these circumstances? Internally, these votes split their caucus and are particularly opposed by their most vulnerable members. Externally these are agreements that Republican candidates support, while their own candidates and likely nominee oppose them. This would hardly be an auspicious start to a relationship with their hoped-for Democratic president.

The results of such votes hold no better prospects. If successful, they give President Bush political victories and a legacy, neither of which the Democrats desire. If the votes fail, Congress looks dysfunctional and appears anti-trade and anti-international, at a time when Democrats want to appear to have better policies for international engagement. These arguments could lead some to theorize that the administration could gain an advantage by forcing these votes on the Democratic leadership.

While TPA procedure certainly presents the opportunity to force a vote with its 90-day legislative clock and simple up or down votes in both bodies, the White House has ample reason for hesitancy. FTAs constitutionally must originate in the House (if they adjust tariffs). This prevents the Senate from voting first and building political momentum with a strong level of support. More importantly, if an FTA fails in the House, it is lost forever. With Trade Promotion Authority expired, there is no chance to renegotiate an agreement, even if time remained for this administration.

In contrast, the pending FTAs forever retain their "fast-track" status even if — as in the case of NAFTA (North American Free Trade Agreement) negotiated under President George H.W. Bush (the elder) and passed under Bill Clinton — these were held over for another administration to pursue. Forcing a vote would be a very high-risk game of chicken for the White House with the very real prospect of an irreplaceable loss. Both parties have their reasons for not bringing up any more trade agreements in this Congress.

Why would the Democratic leadership seek them when they are divisive within their caucus and distance them from their top presidential candidates?

Why would the administration that wants both FTAs and a legacy be willing to risk both on an ever-increasing long-shot? And these hurdles only heighten as 2008 progresses. Perhaps the best possibility would be for a lame-duck attempt, when both the Congress and the president are past the November election.

Tough votes are then sometimes seen as "free" votes where members can vote without such a focus on the political consequences. Yet even this hardly assures passage. As the defeat of the comparatively innocuous legislation granting Vietnam permanent normal trade relations proved last year, there are few easy trade votes these days — even in the last days of a Congress.

Ironically, with this year's landmark May agreement on environment and labor standards, the administration and Democratic leadership came further than at any time in recent memory of reaching a bipartisan approach to move trade legislation. That agreement bore fruit in the large show of support for the Peru agreement.

Despite these best efforts and best results, the trade tide appears to have crested and begun receding simultaneously. It is unclear when it will come in again, but very likely it won't be in this Congress. J.T. Young served in the Treasury Department and the Office of Management and Budget 2001-2004 and as a congressional staff member 1987-2000.

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