[CTC] Ohio Senate Race continues with Trade focus

[Karen Hansen]

Inside U.S. Trade - 7/9/2010

 


Critics Seek Details On Extent, Nature Of Possible Korea FTA Changes


 

Private-sector stakeholders and members of Congress who oppose the
U.S.-Korea Free Trade Agreement in its current form are engaged in
informal contacts with the Obama administration to ascertain the extent
and the nature of the changes the administration is seeking from Korea,
according to informed sources.

 

These critics are trying to find out if the administration will seek
changes in areas other than market access for beef and autos, and also
want to know exactly what changes the administration is seeking in a
given area.

 

Both opponents and supporters agree that the administration has provided
few details on what changes it wants to seek on autos and beef, the two
areas that officials have identified as the focus of their efforts.
Officials have answered private inquiries about what they want in these
areas by saying these details are still being worked out, sources said.

 

Because the administration's plans on Korea FTA changes remain murky,
those who oppose the FTA in its current form -- including unions and
Ways and Means Committee Chairman Sander Levin (D-MI) -- are generally
"keeping their powder dry" in order to avoid an unnecessary battle with
the administration over its decision to move ahead with the Korea FTA,
sources said.

 

In the past, Levin has stressed the need to fix autos, but has also
cited the need to address other non-tariff barriers that prevent U.S.
companies from readily selling refrigerators in Korea, for example. On
the other hand, one observer argued that autos is the main issue and
other non-tariff barriers would not hold up the FTA if a successful fix
for autos can be found.

 

One informed source said members of Congress, not staff, will have to
decide in which areas the administration needs to seek changes.

 

Under the May 10, 2007 agreement on trade policy worked out between
House Democrats and the Bush administration, Democrats stated that the
"problem of Korea's systemic barriers in the automotive, manufactured,
agricultural and services markets will have to be addressed" for the FTA
to move forward.

 

 Some observers believe that the low-key approach that is now underway
among FTA critics to ascertain the administration's plans will not
continue beyond a few more weeks, as it could become clear at that point
that the administration's goals for Korea FTA changes fall short of
their demands.

 

Leading labor unions, including those represented by the AFL-CIO, have
made it clear that the administration has to go beyond the areas of
automobiles and beef in terms of changes to the U.S.-Korea FTA. These
unions have also stressed to the administration that the labor community
is unified in opposing the Korea FTA as it now stands, sources said.

 

Labor sources this week argued that absent substantial and far-reaching
changes, the administration will face unified and fierce opposition from
the labor community.

 

At the same time, these unions are still consulting internally on how
best to proceed and what specifically must be changed in the Korea FTA.
AFL-CIO President Richard Trumka issued a statement last week urging the
administration to seek changes in the areas of investment, services and
procurement.

 

While business supporters agreed that negotiations with Korea are now
set to ramp up, some business sources and Republican congressional
staffers this week were skeptical that they would produce results in the
near term.

 

These sources said that passing the Korea FTA will require significant
political capital, and argued that it remains unclear the administration
is dedicated to expending it. However, other supporters said the
administration, by announcing its intention to resolve issues related to
the FTA by November, is now obligated to do so.

 

The form of any changes is also unclear, although a source close to
Korea this week said that changing the text of the FTA is "out of the
question," as the two sides have already negotiated the deal. Neither
side wants to create a situation where the U.S. would have to secure
fast track negotiating authority to submit the deal to an up-or-down
vote, this source said.

 

"We think that without a radical revision, this trade agreement needs to
be fought, and we will fight it," Larry Cohen, president of the
Communication Workers of America (CWA), said in an interview with Inside
U.S. Trade.

 

CWA is an affiliate of the AFL-CIO, and Cohen said that other "fair
trade" unions and environmental groups felt the same, a point another
union official said was accurate.

 

According to Cohen, such a "radical revision" would have to include
changes to U.S. labor laws, such as by passing provisions contained in
the Employee Free Choice Act, which has stalled in Congress. That bill,
which is extremely controversial and opposed by many business groups,
removes obstacles to employees who want collective bargaining, and
allows employees to form unions by signing cards authorizing union
representation.

 

The AFL-CIO and its affiliated unions are already in the process of
coming up with proposals on changes for the FTA, Cohen said. These
"position papers" will likely cover areas including workers rights,
financial services regulation, and offshoring, and could be submitted to
the administration by sometime in August, he said.

 

But another union source only said that unions may make specific
proposals to the administration on how to change the Korea FTA.

 

As part of their initial strategy of sending a political message to the
administration, some opponents of the FTA as it now stands are working
in congressional districts to press Democrats to sign a letter to
President Obama requesting a meeting to discuss specific ways to improve
the current FTA.

 

These critics are especially focusing their efforts this week on Ways
and Means Democrats, as this would help bolster the strength of the
letter, one source said.

 

While the deadline for signing the letter, organized by Rep. Mike
Michaud (D-ME), was originally set for July 6, it was extended by one
week in order to allow time for further district-level lobbying, this
source said. At mid-week, the letter had 56 signatories, sources said.

 

However, one source said that as of mid-week, there were still no Ways
and Means members on the letter. This source said it would clearly be
preferable to convince some committee members -- such as Reps. John
Lewis (D-GA), Bill Pascrell (D-NJ), Linda Sanchez (D-CA), Shelley
Berkley (D-NV) or John Yarmuth (D-KY) -- to sign it prior to submission
to the president.

 

Ways and Means Committee members have generally declined sign letters or
co-sponsor legislation that deal with controversial trade issues, as
they do not want to "step on the toes" of the committee chairman.

 

For example, there is only one Ways and Means members currently
endorsing the Trade Reform, Accountability, Development and Employment
(TRADE) Act, sources pointed out. It is Rep. Danny Davis (D-IL).

 

In addition, opponents of the Korea FTA as it currently stands will look
to lobby the current supporters of the TRADE Act and those members of
Congress that opposed the Peru FTA, stressing the need for far-reaching
changes, sources said.

 

There are currently 143 voting Democrats members of Congress that have
endorsed the TRADE Act, more than half of House Democrats. However, FTA
opponents conceded that this does not mean all those members will
necessarily vote against the Korea FTA.

 

FTA opponents said it may be challenging to get members of Congress to
commit to vote against the Korea FTA before those members can consider
any new changes the administration negotiates. But one source said
opponents can stress the importance of far-reaching changes and "set the
bar high" for the administration.

 

Opponents also suggested that the Korea FTA would now become an election
issue. Signatories of the letter organized by Michaud are likely to
raise to the administration the fact that moving on the Korea FTA will
make it harder to rally the Democratic base for turning out the vote in
November, one source said.

 

This source said labor groups will also now make the Korea FTA a
campaign issue, asking members to at least commit to opposing the Korea
FTA as originally negotiated.

 

FTA opponents will also use arguments criticizing the financial services
provisions in the FTA to help garner opposition to the FTA, sources
said.

 

Opponents argue that the Korea FTA would help further financial
deregulation, which was at the root of the recent financial crisis, and
will look to use this "hot button" issue to garner opposition, sources
said.

 

A business source called these claims completely false, arguing that the
FTA, like the World Trade Organizations' General Agreement on Trade in
Services (GATS), contains prudential carve-out measures that would
ensure the ability to regulate in the event of a financial crisis. --
Jamie Strawbridg

 

 

 

 

 

Michael F. Dolan, J.D.

Legislative Representative

Department of Federal Legislation and Regulation

International Brotherhood of Teamsters

 

desk: 202-624-6891

fax:   202-624-8973

cell:  202-486-6083

 

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