President Bush asked Congress on Wednesday to extend his ability to make trade deals without amendments from lawmakers, and Treasury Secretary Henry M. Paulson Jr. defended the administration’s fi scal and trade policies with China.
Speaking at Federal Hall on Wall Street, the President emphasized job creation, the strength of the economy and the benefi ts of global trade in a “State of the Economy” address.
“At this moment, the most promising opportunity to expand free and fair trade is by concluding the Doha Round at the World Trade Organization,” Bush said, referring to negotiations intended to open markets. “Global trade talks like Doha have the potential to lower trade barriers all around the world.”
Bush said the only way to “complete Doha and make headway on other trade agreements is to extend” the trade negotiating authority, but he acknowledged the political battle ahead.
The President’s Trade Promotion Authority expires June 30, setting the stage for a battle on Capitol Hill over what Demo crats might seek in exchange for an extension.
“I know there’s going to be a vigorous debate on trade, and bashing trade can make for good sound bites on the evening news,” Bush said. “But walling off America from world trade would be a disaster for our economy. Congress needs to reject protectionism and to keep this economy open to the tremendous opportunities that the world has to offer.”
Key Democratic leaders said they are willing to work with Republicans on an extension, but cautioned they expect something in return.
Rep. Charles Rangel (D., N.Y.), chairman of the House Ways and Means Com mittee, and Sen. Max Baucus (D., Mont.), chairman of the Senate Finance Committee, issued a statement urging legislative changes that “ensure job creation,” stronger trade enforcement, Con gressional consultations and stronger labor and environmental provisions in trade agreements. “Trade negotiating authority is a valuable tool for the administration, but it requires a great deal of trust and Congress must have some key assurances before it is willing to extend this leverage,” Rangel said in the statement.
Many in the textile industry, which has suffered huge job losses in the past two decades as apparel manufacturing moved offshore, called for a rejection of the extension.
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Pointing to the three million manufacturing jobs that have been lost since 2001, Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, said in a statement that Trade Promotion Authority “is the blank check Congress gives to the executive branch to offshore entire U.S. industries. Under TPA, Congress restricts itself to a superfi cial review of trade agreements instead of engaging in close scrutiny.”
Importers seeking more market-opening expansion overseas support the extension.
“This authority is extremely important to expedite free trade agreements and allow negotiators to operate effectively,” Kevin Burke, president and chief executive offi cer of the American Apparel & Footwear Association, said in a statement. “Complex international trade agreements cannot be renegotiated after the fact by the U.S. Congress.”
Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel, said, “TPA is really the status quo now for approval of all major trade legislation. It doesn’t prevent debate. TPA has worked to maintain the integrity of negotiations. Congress still has the latitude to request and press for other changes in the implementing legislation.”
On Capitol Hill, senators grilled Paulson on China and the administration’s overall trade policies at a Senate Banking, Housing & Urban Affairs Committee.
“The Chinese do not get it,” said Sen. Jim Bunning (R., Ky.). “All the jawboning and talking that you are doing with the Chinese is not going to affect one iota that steelworker in Alabama or in Indiana who is complaining to us about unfair practices of the Chinese-regulated government in relation to our open government.”
Paulson, touting the Strategic Economic Dialogue he helped establish with Chinese offi cials last year, reiterated his stance that dialogue, not punitive measures, would prod the Chinese to reform their currency policies and make longterm structural economic changes.