Republicans Block Free-Trade Deal With Obama

July 1, 2011
Sen. John Kerry: 'Politics took over.'

A deal to push long-stalled U.S. free-trade agreements with South Korea, Colombia and Panama through Congress crumbled Thursday as Republicans blocked a key session in a dispute over aid to workers.

The White House on Tuesday said it had reached a compromise to move ahead on trade pacts and fund through 2014 a program that offers health care and retraining to workers who lose jobs to overseas markets.

But Republicans boycotted a hearing of the Senate Finance Committee, saying that President Barack Obama's Democratic Party wanted to extend the Trade Adjustment Assistance as a political concession to labor-union allies.

Senator Orrin Hatch of Utah, the top Republican on the committee in the Democratic-led Senate, complained that the Obama administration was trying to "jam" the legislation at a late hour ahead of the Independence Day holiday.

"This is beyond irresponsible," Hatch told reporters. "They are prepared to throw years of work on the free-trade agreements down the drain for this."

Senator Jon Kyl, a Republican from Arizona, called the workers' aid too expensive and questioned the need for retraining, saying: "I don't think there are any more whale-oil manufacturers left, for example."

"Our belief is that as a general proposition," he said, "free-trade agreements create jobs, they don't kill jobs."

Republican Chairs Empty

Democrats went ahead with the session but did not proceed, as the chairs of all Republican senators were empty.

Sen. Max Baucus, a Democrat from Montana who heads the committee, said that the United States would "lose ground to our competitors," noting that a trade deal between South Korea and the European Union takes effect Friday.

"These bills are so critical to our effort to open new markets, help displaced workers and improve our economy," Baucus said.

Sen. John Kerry, a senior Democrat from Massachusetts, noted that Republicans had long accused Obama of inaction on free trade and suspected that the party was looking ahead to next year's presidential election.

"I guess it was important to them until it stopped being important to them because politics took over," Kerry said. "They want to do everything possible to hurt the president, to keep the economy where it is -- election strategy 2012."

The White House, which negotiated with lawmakers including Republican Representative Dave Camp of Michigan, urged Congress to move forward on the free trade agreements "without delay."

"President Obama's top priority is to help ensure that Americans struggling to pay their bills send their kids to college and save for retirement," White House spokesman Josh Earnest said.

Deal With South Korea Would Eliminate Tariffs

The deal with South Korea -- the largest for the United States since the North American Free Trade Agreement in 1994 -- would eliminate 95% of tariffs with Asia's fourth-largest economy.

The trade deal was signed in 2007 under former president George W. Bush but needs ratification by both legislatures. The Obama administration renegotiated it to address concerns of critics including automakers and labor unions -- in particular by slowing the rate of tariff elimination on South Korean cars.

The South Korea trade agreement now enjoys support of key members of Congress. The Obama administration has predicted it would support 70,000 jobs and bolster an increasingly close alliance with South Korea.

But the AFL-CIO -- the main U.S. labor confederation and key election force for the Democrats -- remains opposed. It doubts the job-growth figures and charges that the trade agreement would benefit corporations instead of workers.

Under the 2009 stimulus bill championed by Obama, hundreds of thousands more workers became eligible for benefits and retraining under the Trade Adjustment Assistance program.

But the expansion of the program ran out earlier this year as Republican lawmakers -- who triumphed in 2010 congressional elections -- said it was too expensive. The program's benefits totaled $1.1 billion in the last fiscal year.

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