Bush and Congress draw battle lines over trade

But key Democrat backs extension of President’s fast-track powers.

TRADE is emerging as a hot-button issue in the United States.

With five months left before the President’s all-important trade negotiating authority ends, Mr George W. Bush and a Democrat-controlled Congress are engaged in an intense public debate.

The President is putting pressure on lawmakers to renew his fast-track powers.

The Democrats are demonstrating a mix of resistance and support – with a key senator now publicly supporting a renewal of Mr Bush’s authority but calling for new tools to fight trade barriers.

The backing from Mr Max Baucus, who chairs the influential Senate Finance Committee, gives the Bush administration a boost but there are doubts whether it could sway the Democrat majority.

The lawmaker, who is one of a handful of pro-trade Democrats, said on Wednesday that he would back an extension of Mr Bush’s trade-promotion authority, which allows the President to negotiate free-trade deals that Congress cannot amend in piecemeal fashion.

“I have long supported granting the President fast-track authority,” he said in a speech on the Senate floor. “The success of America’s ranches and farms, the success of businesses big and small, requires that the President have this authority.

“I believe that trade creates opportunities. I believe that trade generates American jobs. I believe that trade bolsters our global competitiveness. I believe that trade allows us to protect America’s values in the world.”

He said that the alternative to free trade – trade barriers – would damage the US economy even more.

He said the trade-enforcement measures that Congress created in the 1970s and 80s were outdated.

“They no longer function as intended,” he said. “It is time to take a hard look at these tools. We should redraft them so that they better address the trade barriers that American exporters face in today’s global economy.”

He was referring specifically to Section 301, a provision of the 1974 US Trade Act allowing Washington to impose trade sanctions on other countries that impose barriers to US exports.

It has been modified over the years by international agreements that required the US to go through dispute-settlement procedures, such as at the World Trade Organisation, before it could impose sanctions.

While supporting free trade, Mr Baucus made clear that there were “deep and legitimate concerns about the effect of trade and globalisation” on Americans. He called for several measures to win more support for extending Mr Bush’s fast-track authority that expires on July 1. Besides reviewing ways to counter trade barriers, he argued that Congress needed to do more for workers who have lost jobs because of trade.

It also needed to address sub-standard labour and environmental issues in developing countries that inked trade deals with the US, he said.

Mr Baucus can draw on the support of Mr Charles Rangel, who is chairman of the House Ways and Means Committee. But there are doubts whether they can win over the majority of Democrats whose traditional support base is drawn from labourunions.

The White House is all too aware of this as Mr Bush carried on his campaign to garner support. On Wednesday, he was in New York to make the second of two major speeches this week – the first, a day earlier in Illinois – to challenge congressional opposition.

In what has been touted as a “state of the economy” address, he declared: “I ask Congress to renew it. I know there’s going to be a vigorous debate on trade, and bashing trade can make for good soundbites on the evening news, but walling off America from world trade would be a disaster for our economy.”

Mr Bush needs lawmakers to extend his fast-track powers to finish the now-stalled Doha round of world trade talks and press ahead with 11 bilateral trade deals, including with South Korea, Thailand and Malaysia.

The President also tried to offer a rosy picture of the economy before he presents the budget on Monday, when he will reveal measures for a balanced budget by 2012.

“Workers are making more money. Their paychecks are going further. Consumers are confident. Investors are optimistic,” he said.