Friends,
The trade imbalance is severe, and as the US declines, China rises:
"...even as growth slows in the United States, expanding
economies abroad are creating a need for American exports.
In March, exports totaled $126.2 billion, up $2.2 billion
from February. Those gains were not enough to offset an $8.2
billion rise in imports, which totaled $190.1 billion."
"China posted a trade surplus of around $16.9 billion for
April, Xinhua, the official news agency, reported Friday.
Economists polled by Reuters had expected a surplus of $15.9
billion."
In order to attempt to do something about this, the administration offers a
compromise to Congress:
"The unusual agreement, which came after weeks of
negotiations, would guarantee workers the right to
organize, ban child labor and prohibit forced labor
in trading-partner countries. It would also require
trading partners to enforce environmental laws
already on their books and comply with several
international environmental agreements."
I do not believe these measures would be effective. They look good on paper, but
the trading partners would not be able to afford complying with them, and the
administration would be unlikely to try to enforce them if it meant interfering
with US exports. The net effect is they are mere window dressing.
rkm
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Original source URL:
http://www.nytimes.com/2007/05/11/business/11trade.html
May 11, 2007
Bush and Democrats in Accord on Trade Deals
By STEVEN R. WEISMAN
WASHINGTON, May 10 ‹ The Bush administration reached agreement on Thursday with
the House speaker, Nancy Pelosi, and other Democrats to attach environmental and
worker protections in several pending trade accords, clearing the way for early
passage of some pacts and improving prospects for others.
The unusual agreement, which came after weeks of negotiations, would guarantee
workers the right to organize, ban child labor and prohibit forced labor in
trading-partner countries. It would also require trading partners to enforce
environmental laws already on their books and comply with several international
environmental agreements.
While the understanding was a victory for Democrats, it also represented a
shrewd compromise by the White House. The agreement is the first major
bipartisan economic deal to emerge since Democrats took control of Congress in
January. It has immediate importance for four countries ‹ Colombia, Panama, Peru
and South Korea ‹ that are seeking to enter into trade pacts with the United
States.
But officials in Washington predicted that the agreement¹s effect would go
beyond those countries and could be a template for all trade deals, including a
possible worldwide accord.
Administration officials are hoping that the agreement will cause many Democrats
to support future trade deals. They hope that enough Democrats will join with
Republicans, who generally support such measures, to make passage of the
agreements probable, if only narrowly.
The negotiations were led on the administration side by Susan C. Schwab, the top
trade envoy, and Treasury Secretary Henry M. Paulson Jr., and on the House side
by Representative Charles B. Rangel, Democrat of New York and chairman of the
Ways and Means Committee.
³I think today is a recognition of the results of the November election,² Ms.
Pelosi said at a news conference. ³It doesn¹t mean that this paves the way for
trade agreements where we have other obstacles. But where it comes down to labor
standards and environment, this is enormous progress.²
Ms. Schwab said that the agreement would send a message to trading partners that
the United States was prepared to provide new impetus to the faltering talks for
a global trade accord.
Democrats have been pressing for worker, environmental and other protections on
trade deals without success since President Bush took office in 2001. The
absence of such protections has meant that when lawmakers passed measures that
lowered trade barriers, they generally did so without the support of Democrats.
In the 1990s, President Bill Clinton was able to get only 40 percent of his
fellow Democrats to endorse the North American Free Trade Agreement, and about
60 percent to support a global trade agreement. Since then, many Democrats have
soured on measures to lower trade barriers.
The breakthrough came as the politically sensitive trade deficit jumped in March
to $63.9 billion, or 10 percent more than February¹s revised deficit of $57.9
billion, putting the imbalance at its highest level in six months.
The report, issued by the Census Bureau, followed a trend that economists have
observed for months: even as growth slows in the United States, expanding
economies abroad are creating a need for American exports. In March, exports
totaled $126.2 billion, up $2.2 billion from February. Those gains were not
enough to offset an $8.2 billion rise in imports, which totaled $190.1 billion.
Thursday¹s compromise affects four trade deals pending before Congress, two of
them signed and two with negotiations that are nearly complete. All four
countries would have to accept the provisions agreed to with the Democrats, but
trade officials said they expected no major problems.
Peru and Panama are considered most likely to win early Congressional approval.
Colombia is more problematic, because Democrats are demanding that, besides the
new measures, more protections be added to prevent violence against activists
trying to organize workers.
The South Korea accord, if put in place, would lead to the largest amount of
increased trade. But it is opposed in its current version by Democrats who want
greater access to that country¹s markets for American beef, automobiles and auto
parts.
Spokesmen at the National Association of Manufacturers and other business groups
hailed the understanding, but said they wanted to study its provisions before
endorsing its details.
Democrats have been most wary of two administration trade priorities: concluding
the global negotiations known as the Doha round, named after the city in Qatar
where the talks began six years ago; and extending Mr. Bush¹s power to negotiate
trade deals on which Congress gets only an up-or-down vote.
This negotiating authority, known in Washington shorthand as fast track, has
been vigorously opposed by Democrats, who say that they cannot imagine giving
Mr. Bush open-ended negotiating authority.
But Mr. Rangel said he could imagine a limited extension of such negotiating
authority if the Doha round talks looked as if they were shaping up to be a good
deal for the United States.
Democrats representing the older industrial regions, where jobs have been lost
because of imports of cheap textiles, shoes, machinery and other products made
in Asia and Latin America, have generally been opposed to free trade deals.
But others in the party are more open to trade. This group tends to represent
high-technology and financial services industries, which are eager to gain
markets in fast-growing third world countries.
In addition, farmers have become proponents of trade deals now that a large
share of farm products are being exported. But lawmakers from farm areas have
been skeptical of the administration¹s record in negotiating trade pacts,
insisting that they will not support them unless Europe and India open their
markets.
Ms. Schwab said the accord announced Thursday would help in her talks at the
World Trade Organization aimed at reaching an agreement opening barriers for
farm goods, industrial products and services. Those talks involve Brazil, India,
the United States and the Europeans.
Ms. Pelosi announced the trade deal with an unusual array of Republican and
Democratic lawmakers and administration members at her side, including Ms.
Schwab and Secretary Paulson.
The compromise appeared to be a striking tableau at a time of bitter partisan
battles in Congress and with the administration over Iraq, actions by Attorney
General Alberto Gonzales, budget issues, Social Security and Medicare.
What it seemed to show is that, on trade, a coalition of lawmakers from states
that stand to gain more from increased exports than they lose from increased
imports can come together if each side¹s interests are accommodated.
Originally, the administration had opposed the labor standards, arguing that
they would provide a backdoor attempt to change American labor laws. It
envisioned trading partners suing to overthrow American curbs on union shops and
teenage employment on farms and in summer jobs. These concerns appeared to fade
in the face of prospects of not getting any trade deals through Congress this
year.
In addition to the labor and environmental provisions, the pact would make it
easier for generic drugs to be sold in foreign countries; preserve the right of
the United States to bar foreign companies from running American ports; and
ensure that foreign investors will not have more rights than American investors
domestically. There are also promises to step up training of workers who lose
their jobs because of imports.
China¹s Trade Surplus Rises
BEIJING, Friday, May 11 (Reuters) ‹ China posted a trade surplus of around $16.9
billion for April, Xinhua, the official news agency, reported Friday.
Economists polled by Reuters had expected a surplus of $15.9 billion.
Exports in April were $97.4 billion, Xinhua said, while imports were about $80.5
billion.
Copyright 2007 The New York Times Company
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