Reproduced with permission from Daily Report for Executives, No. 86 (May 4, 2007) p. A-7. Copyright 2007 by The Bureau of National Affairs, Inc.

Labor, Environment Deal Precursor To TPA, but Not Likely to Lead to Passage

By Amy Tsui

A deal on labor and environmental provisions in free trade agreements might not be enough to get new trade promotion authority for the administration, but it would provide momentum for four pending trade agreements in Congress, experts said May 3 at a meeting of the Washington International Trade Association.

The deal on labor and environment is a necessary precursor to the issue of trade promotion authority and the discussion on a broader trade agenda, Brian Pomper of Parven, Pomper, and Schuyler Inc. said. He said if there was a deal, "there will be an easy glide path for Peru and Panama, but there are special problems with Columbia that need to be addressed and special issues with Korea."

The administration and Congress have been negotiating the details of a broader trade agenda, with a major sticking point being the inclusion of International Labor Organization standards. Business groups have said that the inclusion of such labor standards could open the United States to legal challenges on its labor laws.

Enforcement to Be Part of Debate

Assuming a successful negotiation on labor and the environment issues, any TPA legislation would have to include an enforcement piece, said Emily Beize, vice
president of international affairs of the Grocery Manufacturers Association and Food Product Association. Beize said that the administration had been focused on negotiating free trade agreements, rather than putting those resources towards enforcement of existing agreements.

Another problem in enforcing free trade agreements, is that the process requires consideration interagency coordination, said Linda Menghetti, vice president of the Emergency Committee for American Trade. There needs to be a more centralized focus for enforcement cases, Menghetti said.

"Congress will act [on enforcement]," Grant Aldonas, Scholl Chair in international business at the Center for Strategic and International Studies said. "I happen to think that it's absolutely necessary. There is no focus. There's a bias in the system, regardless of the administration, that is against acting [on enforcement actions]."

Aldonas said that there needed to be a change in the mind set on enforcing international trade agreements, with government taking the lead instead of waiting for business to ask it to bring cases. "Congress is going to provide the spur to try and get beyond that mindset," he said.

He said the administration needed to bring both winning and losing trade cases to vindicate the system and existing trade agreements. Aldonas called for establishing a vision of what is important in the trading arena.