WASHINGTON — The House is expected to approve the initial two trade agreements — with Chile and with Singapore — negotiated by the Bush administration under trade promotion authority.
This story first appeared in the July 24, 2003 issue of WWD. Subscribe Today.
Lawmakers scheduled debate on the bills for late Wednesday night and a vote could follow or occur today. This followed strong agreement on a procedural vote that virtually assured final passage and advancement of the trade package. The Senate is expected to consider the trade package as early as today or Friday. Under TPA, lawmakers can vote for or against a trade bill, but cannot make any changes.
If passed by Congress the agreements would add Chile and Singapore to a group of four nations — Canada, Mexico, Israel and Jordan — that have trade deals with the U.S. The Bush administration is pursuing other pacts with Australia, Bahrain, five southern African nations and five Central American countries, along with a regional pact with 33 nations in the Western Hemisphere.
Lawmakers supporting the trade deals with Chile and Singapore claim they will tear down tariff barriers and pry open economies to U.S. exports, creating employment at home. However, many Democrats and labor unions argue that free-trade pacts have led to massive job losses as companies move production offshore to take advantage of the trade breaks and low wages.
Singapore and Chile are small suppliers of a range of products, including apparel and textiles, to the U.S. Singapore ranked 16th in overall imports to the U.S. with $14.8 billion worth of goods last year, while imports from Chile were even smaller at $3.8 billion, ranking it 36th.
Labor organizations are concerned that a flood of trade agreements will lead to a loss of more manufacturing jobs — 2.4 million jobs have been lost since Jan. 1, 2001 — and further harm the economy. In addition, they claim these two pacts, which do not include core labor standards established by the International Labour Organization, could set a precedent for future trade deals.
James P. Hoffa, president of the Teamster’s Union, has threatened to withhold financial backing and election endorsements of Democrats who support either of the trade agreements.
For importers and domestic textile producers, neither the Chile nor Singapore pacts are expected to translate into much business because they aren’t large apparel producers. However, they are concerned the agreements will serve as templates for future pacts. Importers oppose strict rules of origin and claim the allowances made in both pacts for the use of fabric and yarn are not enough. Domestic producers, on the other hand, oppose the allowances and are pushing for a strict rule of origin in future pacts.
Lawmakers lined up on both sides of the issue as they debated the ground rules.
“These trade agreements continue to be an assault on Middle America,” said Rep. George Miller (D, Calif.) “This is not a question of losing jobs in a recession or slow economy where you will get called back [when it turns around]. People are not getting called back, because their jobs have left the country.”
Rep. David Dreier (R, Calif.) argued that the trade deals will “enhance opportunities for U.S. workers.” He pointed to Chile’s concession to eliminate the luxury tax on automobile exports, which he contended could give U.S. auto makers a more open export market and lead to the creation of more domestic jobs. He noted Chile will immediately remove 6 percent tariffs on more than 85 percent of all American exports the day the deal is implemented.
In related news, a coalition of textile groups will file a petition today with the government seeking to invoke a safeguard on imports from China in four categories: man-made fiber and cotton dressing gowns and robes; gloves and bras, and knit fabric. The groups want the imposition of quotas on these imported products, which have skyrocketed since quotas were removed on them and other categories in January 2002.