Bush willing to work with Dems on trade

/ Source: The Associated Press

President Bush's top trade negotiator said Tuesday the president still hopes to achieve bipartisan support for an aggressive trade liberalization agenda in the next Congress even with Democrats in control.

U.S. Trade Representative Susan Schwab said the administration would continue to push for the conclusion of global trade talks known as the Doha Round before negotiating authority expires on June 30.

She said the administration also hopes to wrap up negotiations by early next year on free trade deals with South Korea and Malaysia and said that talks should be concluded soon with Panama.

She called gaining congressional approval for agreements already completed with Peru and Colombia a high priority.

In a speech to the U.S. Chamber of Commerce, Schwab warned against any move to erect protectionist barriers against the flow of goods into the country, something that critics say are needed in the face of record-high trade deficits they contend are costing American jobs.

Many Democrats campaigned against Bush's trade policies in the November congressional elections, saying the administration had failed to do enough to halt the loss of manufacturing jobs to low-wage foreign countries such as China. Since Bush took office in 2001, the country has lost nearly 3 million manufacturing jobs.

The Democratic takeover of the House and Senate has raised speculation that the administration's trade agenda will face serious obstacles in the new Congress.

But Schwab labeled this the "conventional wisdom" that a Democratic-controlled Congress would stop the administration's trade agenda "dead in its tracks."

"There are those in the extremes of both parties ready to preach retreating to protectionism and economic isolationism," Schwab said in her speech. She said nothing could be more harmful to the American economy.

"My hand is outstretched to any and all members of Congress - the new Democratic leadership and our Republican colleagues," she said. "We must think about the next generation, not just the next election."

A change in course needed
Rep. Sander Levin, D-Mich., said in a statement that the administration needed to be prepared to seek compromises with Democrats on contentious trade issues.

"I hope Ambassador Schwab's remarks are not meant to say that the Bush administration's approach to trade is 'stay the course.' There needs to be a change in course," Levin said.

Schwab said she had been encouraged by comments on the need for bipartisanship made by Sen. Max Baucus, D-Mont., who will head up the Senate Finance Committee and Rep. Charles Rangel, D-N.Y., who will head the House Ways and Means Committee, the two panels with responsibility for trade.

But trade experts said Schwab may being far too optimistic about what can be done in the next Congress.

"I see rough waters ahead for the administration's trade agenda," said Dan Griswold, a trade expert at the Cato Institute, a think tank in Washington. "All the signs point toward legislative stalemate on trade."

Vietnam early test
Some analysts suggested for Bush to win approval of further trade deals he will have to drop opposition to providing greater benefits to workers laid off because of foreign competition and also accept Democratic demands to increase protections so that U.S. jobs are not moved to low-wage countries with lax labor and environmental standards.

Gary Hufbauer, a trade expert at the Institute for International Economics, said an early test for Bush will be whether he can get Congress to approve normalizing trade relations with Vietnam.

Bush suffered an embarrassing defeat on this issue when the House failed to approve it by the necessary majority earlier this month right before he left on a trip to Vietnam.

"If Vietnam is held over until next year, that would indicate tough sledding for the administration," Hufbauer said.