Lawmakers returned from the August recess to what is shaping up to be a volatile fall session in Congress. Iraq, a farm bill, energy, health care and spending issues all crowd the legislative calendar. The Democratic leadership is also contemplating how to squeeze in consideration of trade agreements with Colombia, Panama and Peru, while relegating the South Korea FTA to the back burner over the beef trade.
Three of the deals on the table provide an opportunity for the United States to build strategic relationships with allies in Latin America, viewed by members of both parties as a necessary step toward stability in the region. The agreements, the last of the Bush White House’s trade deals eligible for consideration under presidential “fast track” negotiating authority, raise serious questions for Democratic leaders attempting to balance the interests of moderates in the party open to trade expansion, with those of the many rank-and-file members beholden to labor unions for financial and campaign support. While there is genuine interest among Democratic Party leaders to move forward with trade expansion in Latin America, in doing so, they run two significant risks. First, there is the possibility of losing the support of key union backers. Second, and potentially more damaging, they could alienate the vulnerable bloc of freshmen who campaigned in the 2006 midterm elections on strong anti-trade platforms, and who — not inaccurately — view themselves as responsible for delivering Democratic majorities in the House and Senate.
President Bush entered the White House in 2001 with an ambitious trade liberalization strategy, and in his first term succeeded in pushing through (albeit narrowly) the Central American Free Trade Agreement (CAFTA), the largest trade agreement in over a decade. However, public apprehension over globalization shows no sign of abating, despite a relatively low unemployment rate of 4.6 percent and increasing evidence that current manufacturing job losses are tied to the slowing housing market rather than trade-related pressures. A string of high-profile cases of contaminated and otherwise dangerous imports reaching U.S. consumers and a warning from China that it could use its $1.33 trillion of foreign reserves as a political weapon against the United States provide skeptics of globalization a platform from which to dispute the benefits of trade expansion. The Democratic presidential frontrunners, aware of the importance of securing major union endorsements, routinely seize on this skepticism on the campaign trail. Despite the efforts of pro-trade Democrats like Max Baucus (D-MO) and Charles Rangel (D-NY), many of their union-backed fair trade colleagues are gaining influence over the party’s trade agenda and could counteract the efforts of moderate members who are more open to trade expansion, provided labor and environmental protections are built directly into agreements.
When Democrats quashed an extension of presidential trade promotion “fast track” authority earlier this year, it was viewed by many as an early warning to the White House regarding the fate of Bush’s remaining trade objectives. In an attempt to allay Democrats’ concerns, the White House negotiated a compromise with Democratic leadership on labor and environmental standards to make the Peru and Panama agreements more palatable to rank-and-file Democrats (tellingly, however, the administration has assiduously avoided formal policy steps that would make the compromise legally binding). Nevertheless, a considerable number of Democrats in Congress remain strongly opposed to the Colombian agreement, expressing concerns over labor violence, and to the South Korean deal over auto market access and questionable linkages to North Korean export zones. Democrat labor backers, who also oppose the more controversial Colombian and South Korean trade deals, view cooperation on trade issues as quid pro quo for aiding in the Democratic takeover of Congress and are carefully watching party leaders as they plan to bring the first of the agreements to the floor. The comparatively smaller Panama and Peru deals stand a better chance of passing, and few argue against the benefits of using trade in Latin America to limit the influence and expansion of anti-American sentiment in countries like Venezuela, but at what cost?
The question is not whether the Latin American agreements will come to the floor of the House and Senate, but the extent to which Democrats’ eagerness to press ahead with trade deals opposed by many of their key supporters will hamper relationships with the party’s strong labor base, regardless of whether the agreements are ultimately passed. As with previous agreements, the overwhelming majority of votes in favor of passage will come from Republicans, with a comparatively smaller number of votes coming from Democrats. Procedurally, members who represent districts heavily impacted by trade-related job losses will receive party leaders’ blessings to oppose the agreements when they come to the floor. However, willingness on the part of Democrats to engage the White House on trade expansion on the heels of a congressional power shift largely engineered by a critical bloc of freshman trade skeptics and bolstered by union campaign contributions, could blur the lines of where the party stands on trade. Even if opponents of the agreements manage to block passage of one or more of the deals, Democratic leaders must ask themselves whether paying lip service to business interests is worth exposing a rift in the party, and potentially damaging ties with unions as Democratic candidates seek their endorsements and financial backing in the race for control of the White House. Finally, the expected trade votes may provide a glimpse into the true trade policy leanings of the leading Democratic candidates — allowing for comparison between campaign rhetoric and political realities.