Ex-Clinton aide urges free trade deal

The Democratic leadership in Congress has turned this week to old-school Clintonites to help persuade the freshman class of ’06 to moderate the militant critique of globalisation that helped get them elected.

Gene Sperling, a former economic adviser in the Clinton administration, on Tuesday testified before the House ways and means committee on the need for a new consensus on free trade during a hearing addressed by both corporate cheerleaders and labour movement critics of trade policy.

The architect of Bill Clinton’s pro-trade economic policies has also held private meetings with the new Democratic representatives.

The testimony and encounters are part of a battle for hearts and minds in the hearing rooms and corridors of Capitol Hill as Congress waits to decide on an expected request from President George W. Bush to extend his trade promotion authority.

Lawrence Summers and Robert Rubin – former Treasury secretaries under Mr Clinton – will on Wednesday add their voices to the debate as they advocate a centrist economic policy that ensures middle-class prosperity.

But of the party’s distinguished “three wise men” on economic policy, it is Mr Sperling who has spent the most time working the Hill, imparting advice and answering critics.

Mr Sperling has met with scepticism – and even hostility – from rank and file members, according to people familiar with the discussions. In a letter obtained by the Financial Times, a stunning 39 of the 42 freshman Democrats in the House said “the issue of trade and the impact of the administration’s policy” was “critically important” to their campaigns during the mid-term elections.

“Vital to our electoral success was our ability to take a vocal stand against the administration’s misguided trade agenda,” adds the letter, addressed to party leaders.

The letter is seen as a signal that new members are reluctant to be pressed into voting on controversial, pending trade agreements with Colombia, Panama and Peru or the extension of trade promotion authority, which expires on June 30.

Mr Sperling said on Tuesday he regretted contributing to a polarised debate during his time in the White House by not presenting “a balanced assessment” of the costs and benefits of trade.

But he called on Democratic leaders to negotiate a limited extension of the president’s fast-track trade negotiating authority to facilitate an agreement in the Doha round of world trade talks so the US was “not blamed for killing the agreement”.

The quid pro quo, he said, would be “limited down-payment” on the demands of Democratic leaders for the inclusion of tougher labour standards in bilateral deals and steps towards a big expansion of the social safety net.

Mr Sperling also called for long-term moves towards universal health care as the “most important” step to address voter anxieties about trade.

There were also signs on Tuesday that business leaders have accepted the new political realities that will shape trade policy in the wake of the mid-term elections.

Terry McGraw, the head of the Business Roundtable, told the Congressional hearing: “We need changes in our trade policy.”

The roundtable, which represents 160 of the top US chief executives, indicated it would drop its opposition to the inclusion of tougher labour standards in bilateral agreements.

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