2007-07-01,8:55 PM

Bush loses special trade powers as Democrats flex muscles

US President George W. Bush lost his special trade power at midnight Saturday as opposition Democrats flexed their new grip on Congress and refused White House appeals to renew it.

Democrats, who wrested control of Congress from Republicans in January, were eager to reclaim the constitutional trade authority and set their own stamp on trade policy.

Hours before Bush's fast track authority expired at midnight, US and South Korean negotiators on Saturday inked a trade deal -- the biggest since the 1993 North American Free Trade Agreement (NAFTA). But congressional support for the agreement looked slim.

Under the TPA, Bush negotiated trade agreements that could only be approved or rejected by the legislature, but not amended.

Bush won a two-year extension in 2005 as US trade negotiators argued they needed the precision tool to advance the World Trade Organization's Doha Round.

The US and others had used the potential expiration of fast track as a prod to keep the WTO talks moving. Now that impetus is gone, hope dimmed for progress in the round.

"This removes a deadline that's useful" in keeping the trade talks moving, Edward Alden, a trade expert with the Council on Foreign Relations, a Washington-based think tank.

The Doha Round will be left in "limbo, probably for the next couple of years," he told AFP on the eve of the fast track expiration.

Alden suggested the US political situation was working against renewal of the fast track authority any time soon.

With the November 2008 presidential race already in full swing, it would be unlikely the next president would get fast track renewal unless a single party wins control of both the executive and legislative branches, he said.

The end of TPA also highlighted a waning appetite for free trade among Americans in the face of a burgeoning trade deficit. Critics blame a swelling multi-billion-dollar trade gap with China and others for the loss of thousands of US manufacturing jobs.

Democratic lawmakers hammered home Friday their newfound clout.

"Our legislative priorities do not include the renewal of fast-track authority," House of Representatives Speaker Nancy Pelosi and other leading Democrats said in a statement.

The House Democrats said they had a plan to improve US trade policy, while at the same time addressing increased economic insecurity felt by US families.

Among the steps to be taken is the introduction soon of legislation to address the growing US trade imbalance with China and strengthen overall enforcement of US trade agreements and US trade laws.

Meanwhile, the Bush administration made a last-ditch pitch to save the TPA.

"Its regrettable that Congress is letting this authority expire this weekend," Bush spokesman Tony Fratto said Friday.

"It will be damaging to our economy and our national security if Congress abandons Americas leadership role in trade and the global marketplace," he said.

On the bilateral trade front, House Democrats offered support Friday for free-trade agreements signed under TPA with Peru and Panama, but said they would oppose similar pacts with Colombia and South Korea.

The landmark free-trade deal with South Korea was inked on Capitol Hill Saturday, just hours before Bush's "fast track" authority expired.

The US president has called on Congress to ratify it anyway, saying it would bring "considerable benefit" to Americans and boost the US-South Korea partnership.


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