WASHINGTON — House Democrats put U.S. Trade Representative Robert Zoellick on the defensive Thursday about Bush administration trade policies during a hearing about free-trade agreements that Chile and Singapore recently signed with the...
WASHINGTON — House Democrats put U.S. Trade Representative Robert Zoellick on the defensive Thursday about Bush administration trade policies during a hearing about free-trade agreements that Chile and Singapore recently signed with the U.S.
These FTAs are the first to be completed during the Bush administration and are expected to sail through Congress as early as this month. However, Democrats on the Ways and Means Committee questioned the Bush administration’s progress in pursuing its ambitious trade agenda, whether the U.S. industry is being consulted enough during negotiations and to what extent the Chile and Singapore pacts will be used as models for more than a dozen other agreements being pursued.
Rep. Robert Matsui (D., Calif.), an advocate in his party for expanding trade, was the most pointed in questioning the administration’s policies. Matsui cited as anti-free trade the Bush administration’s recent “highly restrictive textile and apparel agreement” curbing Vietnam’s surging imports into the U.S., its endorsing of legislation last year requiring Caribbean Basin-made apparel be dyed and finished in the U.S. in order to receive duty-free breaks — part of a political payback for GOP textile-state lawmakers — and support of legislation two years ago continuing agriculture subsidies, including cotton.
“[You call this] the Bush administration’s reinvigoration of America’s drive for free trade?” questioned Matsui, quoting from a Thursday opinion column penned by Zoellick and published in the Wall Street Journal. “When did the reinvigoration occur?”
Zoellick shot back with a list of Bush trade accomplishments, like helping to launch the Doha Round of World Trade Organization trade talks. He defended the Singapore FTA as being significant despite the country’s size, since it’s the 12th largest U.S. trading partner, with $40 billion in two-way trade last year, and the free-trade pact is the first inked by the U.S. with an Asian country.
As far as Chile, a tiny trading partner, is concerned, Zoellick noted its economy is one of the fastest growing in the world and “our efforts with Chile are sending very important messages to Latin America, [where a Central American FTA and a Free Trade Area of the Americas pact are in the works].”For retailers and other apparel importers in the U.S., as well as domestic textile producers, neither the Chile nor Singapore pacts are expected to translate into much business because they aren’t large apparel producers. However, both the competing interests of importer and domestic apparel and textile makers are eyeing the agreements as potential templates for future FTAs.
In negotiations with five Central American countries and in the broader FTAA, the U.S. is advocating a yarn-forward rule of origin for apparel. The same rule is used in the Chile and Singapore pacts, much to the delight of U.S. textile producers since apparel receiving duty-free treatment has to be made from U.S. yarn and fabric. Importers are advocating broad exceptions be negotiated to the rule of origin allowing for textiles from other countries.
After questioning by Rep. Sander Levin (D., Mich.) about whether Chile and Singapore would be Bush FTA templates, Zoellick said the pacts will act as “models,” but that each negotiation is different. “It’s also a question of what we can negotiate with our trading partners,” Zoellick said.
Responding to Rep. Jim McDermott’s (D., Wash.) drubbing about what he said is administration “secrecy” toward trade negotiations and not consulting with U.S. industry officials who aren’t appointed trade advisers, Zoellick said, “We are reaching out all the time.”
Despite all the rancor, Ways and Means, on a voice vote, signaled approval for both pacts.
Later, at a hearing before the Senate Finance Committee on Chile and Singapore, Zoellick received a much warmer reception. The panel, which doesn’t have to formally endorse the pacts under Trade Promotion Authority rules, did so anyway by voice vote.
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