Democrats purse lips on Panama
(nfmpolitico.com) Embracing populism and criticizing free trade on the campaign trail were the easy part. But now that Barack Obama is negotiating actual trade pacts, he’s learning why this issue has become a third rail for Democratic leaders.
Trade cleaves Democrats like few other issues, and the administration’s confusing actions on a relatively minor trade deal with Panama, a country not quite the size of South Carolina, has inflamed the family feud. Earlier this spring, the administration looked as if it were going to hash out a Panama free-trade deal. Then the White House quickly changed course and slammed on the brakes just before Memorial Day.
The political fallout: Both sides are angry. And the stumbling on this issue could undermine support from moderate Republicans the White House needs on other big-ticket agenda items.
“The last thing that we need as a caucus is to try to move forward on a Bush-negotiated trade agenda that will definitely divide our caucus and will sidetrack the very important issue of trying to move forward with a good health care proposal,” where Democrats in Congress should be focused, Rep. Michael Michaud (D-Maine), a leading opponent of the Panama deal, told POLITICO.
Meanwhile, Sen. Max Baucus (D-Mont.) — echoing the disappointment of other pro-trade Democrats — vented frustration at the administration for seeming to reverse its support for the deal.
Citing Panama’s willingness to make labor changes and start negotiations on tax concerns, “I’m just scratching my head here — it sounds like a pretty good deal to me. Why doesn’t the administration just take it?” Baucus said to a top United States Trade Representative official during a recent hearing.
Panama engaged in a “good-faith effort for the United States to help reach an agreement with Panama, and now [Obama] seems to be backing off, and I just don’t get it, frankly, personally,” Baucus said.
The free trade agreement would immediately banish tariffs on nearly 90 percent of U.S. goods and more than half of agricultural exports to Panama. While trade between the two countries is modest, American machinery exporters such as Caterpillar Inc. are particularly keen to see the deal done before Panama finishes taking bids on its expansion of the Panama canal — a $5 billion-plus public works project.
Critics say that Panama has not done enough to enact the labor law changes to protect workers’ rights that the country agreed to in a compromise struck between the Democrats and the Bush administration in 2007. They also say the pact should not go forward until Panama, which has been labeled a tax haven, changes its secretive banking laws.
The trouble with this deal started in April, when Obama shocked the trade world by sending positive signals on the Panama deal as well as a more controversial pact with Colombia during the Summit of the Americas in Trinidad and Tobago. Both deals were negotiated and signed by the Bush administration, and Obama’s criticism of them during the campaign had free trade advocates glumly convinced that they’d see little progress on the stalled pacts.
But at the summit, Obama directed his top trade negotiator, U.S. Trade Representative Ron Kirk, to head a review of the Colombia pact, with the aim of identifying and resolving outstanding issues blocking its ratification by Congress.
Obama also directed Kirk to hold a series of high-level meetings with Panamanian officials to work through outstanding congressional concerns with the country’s labor laws and concerns that Panama has a reputation as an offshore tax haven.
Publicly and in private meetings, Kirk and his aides repeatedly suggested that the administration could send the Panama pact to Congress this summer.
“We’re doing everything we can to resolve the outstanding issues as it relates to labor and taxes so we can get that agreement up to Congress,” Kirk said in a May 18 speech at the U.S. Chamber of Commerce, claiming the administration was “working furiously.”
The news was welcomed by pro-trade Democrats such as Baucus and the New Democrat Coalition, a centrist group of pro-business Democrats, as well as most Republicans.
But anti-free-trade groups would get their say, opening up a rare offensive of criticism against the Obama administration from a key part of the Democratic base.
Opponents in the House scheduled a press conference to air their grievances on the same day the Senate Finance Committee was slated to consider the Panama deal in a hearing, the first step in the unique and regimented process by which Congress approves trade deals.
Opponents drafted a letter to House Speaker Nancy Pelosi, asking for her help in working with the administration to revamp the trade agenda. The letter drew 55 signatures from Democratic members of the House Populist Caucus, the Progressive Caucus, the House Trade Working Group — a collection of trade skeptics — and one Republican, Rep. Walter Jones of North Carolina.
“After eight years of a failed Bush free trade agenda, the current demise of our economy and an ensuing massive increase in unemployment, it is difficult to justify to our constituents the passage of another badly flawed trade agreement,” the lawmakers wrote.
Very quickly, the White House appeared to back away from its earlier enthusiasm for the Panama deal.
In the Senate Finance hearing, Everett Eissenstat, the assistant trade representative for the Americas, threw cold water on the expectation of swift movement of the Panama trade pact, saying Obama “believes that it is very important that Panama be considered in the context of a broader domestic agenda.”
Eissenstat testified that Obama would outline his vision of a “new framework for trade” in the near future, but no specific date for such a speech has been given. But lawmakers and lobbyists alike read it as a message that Panama wasn’t going anywhere soon — at least until Obama articulated his trade policy vision.
Now, everyone is waiting for a clearer message from the White House about what to expect on trade.
One pessimistic lobbyist said the Senate Finance hearing gave the impression that “not until there’s world peace and a cure for cancer can we move forward.”
Yet another business source remained unconcerned and said the administration has communicated that “they’re not backing off. They’re not not doing trade.”
“At this point, there’s still not a clear indication as to what has happened or what is going to happen moving forward on Panama,” said a House Democratic aide representing a pro-trade member.
A number of trade watchers suspect that the strength of the pushback from House Democrats spooked the White House. Obama officials saw just how divisive the issue was — in part because trade pact opponents see Panama’s passage as a precursor to the administration moving more controversial deals with Colombia and South Korea — and realized they didn’t want to create any intraparty fights right before moving major health care legislation.
A Senate Republican aide attributed the mixed messages to internal divisions in the administration on the issue. The fact that Baucus scheduled the hearing on the pact forced the White House to confront the issue, the aide said, and “once they did that, it became, I think, a very clear decision based on political considerations.”
“I think that they did an assessment, and it was really very clear that their priority lies with the health care overhaul, and they were not going to take something up that was going to create turmoil in their caucus,” the aide said.
****************
Original Source: http://www.nfmpolitico.com/khou/2009/06/04/democrats-purse-lips-on-panama/
Date Retrieved: June 5, 2009.
