Accord Reached On Trade Authority
President Would Gain Power to Cut Deals

By Juliet Eilperin and Helen Dewar
Washington Post Staff Writers
Friday, July 26, 2002; Page A01

House and Senate negotiators reached agreement last night on long-stalled legislation expanding the president's authority to negotiate trade agreements, bringing one of President Bush's top legislative priorities close to fruition.

The bill would give the president broad powers to cut trade deals that Congress could approve or reject, but not amend. Bush regards such authority as necessary to assure trading partners that any agreement he strikes will not be picked apart by Congress.

The past five presidents enjoyed this authority, but it lapsed in 1994, and President Bill Clinton was unable to persuade a Republican-run Congress to renew it. Bush pushed aggressively for its revival, to strengthen the administration's hand for a new round of global and inter-American trade talks and, more recently, to reassure nervous markets that the United States is on the path toward economic growth.

The legislation giving the president for the next five years what is now called "trade promotion authority" -- formerly known as fast-track -- also includes a top Democratic priority: a multibillion-dollar package of new health coverage, job training and other benefits for workers displaced because of foreign competition.

Senate Finance Committee Chairman Max Baucus (D-Mont.), who announced the deal along with House Ways and Means Committee Chairman Bill Thomas (R-Calif.) just after 11:30 p.m., described it as "the most historic trade legislation that Congress has passed, ever."

Thomas said the measure would provide "tools to the president and to those workers who have been displaced through no fault of their own."

The bill now goes to the House and the Senate for final approval. While the Senate approved its version of the legislation by a 2 to 1 ratio, the House vote was 215 to 214. Thomas said he was confident the measure would pass, though a GOP leadership aide who asked not to be identified described the upcoming vote as "very close."

House leaders hope to bring the compromise to a vote today, before members leave for a month-long summer recess. The Senate plans to act next week before it, too, leaves for its August recess.

The measure, which would provide between $10 billion and $12 billion in aid over the next decade to workers who lose their jobs because of trade, offers a 65 percent tax credit to cover these workers' health insurance costs as well as job training and unemployment benefits. One of the final sticking points was whether employees whose factories moved overseas would automatically qualify for such benefits: Thomas objected, saying the benefit would be too costly.

Under the compromise, workers whose companies relocated to countries that had a preferential trade agreement with the United States would be covered. Other workers could qualify if the U.S. trade representative determines that the move was linked to trade.

Negotiators removed Senate language that would have allowed Congress to vote separately on any trade pact provisions that weaken anti-dumping or other trade-remedy laws. Instead, it includes non-binding language that would allow members of Congress to express their objections to a particular trade provision.

The White House had objected strongly to the Senate's anti-dumping provision, warning that it could prompt a veto. The administration did not issue a statement on last night's accord, but lawmakers and aides predicted that Bush would embrace the measure.

Thomas said the bill would ensure closer "consultation between the executive branch and the legislative branch" on trade because Congress would reserve the right to pass a resolution of disapproval scuttling any ongoing trade negotiations. He described the provision as "the old shotgun behind the door" that could put pressure on the administration, but he suggested that, rather than invoking such power, lawmakers more likely would demand documents and briefings from administration officials during trade negotiations.

The final agreement also includes language, sought by House Republicans from textile-dependent states, that would require all garments shipped to this country duty-free from the Caribbean, Africa or Latin America to be produced with fabric dyed and finished in the United States.

Many Americans believe that expanded trade threatens U.S. jobs and, in some cases, whole industries. Others regard it as essential to long-term economic growth, at home and abroad. The tension between these two views makes trade one of the most politically sensitive issues on Capitol Hill, especially during uncertain economic times.

Republicans tend to favor expanded trade negotiating authority more than Democrats do, but lawmakers often mingle across party lines, divided more by regional and economic issues than by partisan politics.

The accord represents a major win for many business groups, which lobbied long and hard for the new presidential trade powers, and a defeat for the coalition of union and environmental activists who opposed it.

The legislation was combined with a widely supported bill reinstating duty-free trade preferences to encourage Bolivia, Colombia, Ecuador and Peru to give up drug trafficking in favor of producing other goods for international trade.