Incoming U.S. Congress Seen Not Changing Trade Agenda

By Andrzej Zwaniecki
USINFO Staff Writer

Washington – The Bush administration’s trade agenda will remain basically unchanged as the Democrats take control of the Congress in January 2007 for the first time in 12 years, U.S. Trade Representative Susan Schwab said November 28.

The administration and key Democratic and Republican leaders in Congress can work together, building on shared trade principles and objectives, she told business representatives at a conference organized by the U.S. Chamber of Commerce, the largest U.S. business lobbying group based in Washington. It was her first major speech since the U.S. midterm elections in November.

Schwab countered “conventional wisdom” that the takeover of both chambers of Congress by Democrats will force the administration to change trade priorities. Citing multilateral and bilateral trade agreements that received bipartisan support in the past, she said these priorities go beyond party affiliations.

“Bipartisanship on trade should not be a historical concept but a driving force for the future,” she said.

Democrats have been perceived by the media and some analysts as less trade-friendly than the Republicans because of their advocacy on behalf of U.S. workers displaced or threatened by globalization and their insistence on strong labor and environmental protection provisions in U.S. free-trade agreements.

Schwab said that despite differences on the labor and environmental issues, many Republicans and Democrats share the view that trade liberalization on its own promotes higher standards and protections in both areas.  Nevertheless, she added, more dialogue and consultations with Congress may be necessary on these issues.

The administration and Congress must address needs of displaced workers without hampering efforts to expand trade, she said, adding that the widespread and deep economic hardships caused by any retreat from trade liberalization would “dwarf the occasional dislocation that comes from economic engagement.”

Schwab acknowledged that some legislators “in the extremes of both parties” espouse protectionism.

“The good news is that the leaders and people in responsible positions in both parties know better,” she said.

Trade experts who spoke at the conference generally shared Schwab’s optimism.

Grant Aldonas said that in January 2007 and in the subsequent months Democratic leaders of key committees in both chambers are likely to act on issues that are important to their constituencies such as minimum wage and health care.  He suggested that progress in these areas could create an atmosphere conducive to trade deals in general even though initially there might be little progress on specific trade issues.

Aldonas, who served as under secretary of commerce from 2001 to 2005, is currently associated with the Center for Strategic and International Studies, a Washington-based policy research group.

Cal Dooley, a former Democratic congressman from California who currently is president of the Food Products Association, said the Democrats might want to advance a trade program as part of a broader competitiveness agenda that would include reforming the Trade Adjustment Assistance (TAA) program.

TAA provides a variety of benefits and re-employment services to workers who lose their jobs as a result of increased foreign competition.


Schwab cited World Trade Organization (WTO) talks as the Number 1 issue on the administration’s agenda. She said the United States must “speak with one voice” on the WTO negotiations in the coming months.

Officially known as the Doha Development Agenda, these negotiations collapsed in July as countries failed to narrow their differences on agricultural issues. (See related article.)

“We walked away from a bad deal in July; if necessary we will do so again – but we cannot let a strong, potential Doha deal slip through our fingers,” she said.

Former U.S. Trade Representative Clayton Yeutter agreed with Schwab’s view that the Doha round is not doomed. He said, however, it is not likely to succeed if it drags on until 2009-2010, positions of the United States and the European Union do not get closer and other countries do not appreciate the benefits they can derive from its successful outcome.

Developing countries in particular, Yeutter said, would make a huge mistake by giving up on the Doha round because what already has been agreed – the elimination of farm export subsidies in particular – would give them a great advantage.

Speaking on the same day in London, U.S. Treasury Secretary Henry Paulson said he and his British counterpart, Chancellor of the Exchequer Gordon Brown, believe a Doha agreement is within reach.

He said the elections have not weakened U.S. commitment to achieving a successful Doha agreement and that Schwab and other U.S. officials are conduction quiet diplomacy “to explore some ‘what ifs’ and test new ideas.”

The full text (PDF, 9 pages) of Schwab’s prepared remarks is available on the Web site of the Office of the U.S. Trade Representative. The full text of Paulson’s remarks are available on the Treasury Department’s Web site.

For more information on U.S. policies see USA and the WTO and 2006 Midterm Elections.