Bad start for bipartisanship on trade issues

Never mind the Democrats: it’s those Capitol Hill Republicans you need to watch out for. That was the conclusion of frustrated Bush administration officials as they blamed the ineptitude of the Republican leadership of the House of Representatives for trying and failing to rush through the Vietnam trade bill on Monday.

As one frustrated official put it on Wednesday: “The bottom line is that we can’t blame this one on the Democrats.” While some Democrats have been warning that they will scrutinise trade agreements much more closely when they take over the House and Senate in January, the Democrat vote on Monday divided almost evenly for and against – more favourable than for many trade bills. It was the failure of some Republicans to turn up, along with 66 who voted against, that did for the bill. Some speculated that the votes against might have reflected congressional Rep-ublican resentment towards the White House after the heavy defeats of the mid-term elections.

“If they had not used the suspension calendar, this would probably have been seen as a huge bipartisan victory,” the administration official said. The official was referring to the accelerated “suspension” process chosen by the House Republican leadership to push the vote through before this weekend’s Asia-Pacific Economic Co-operation (Apec) meeting in Hanoi. Though the bill will very probably be passed when it comes up again early next month, it is a bad start for the administration’s attempts to achieve cross-party support for trade liberalisation on Capitol Hill.

The White House will face a tough challenge selling any new trade deals to a House and Senate both controlled by Democrats. In particular, it looks ever more quixotic to attempt to turn the Apec forum, which meets this weekend in Hanoi, into a giant free trade agreement of Asia-Pacific (FTAAP), as suggested by some.

The Apec heads of government will call for feasibility studies of the possibility of melding the 21 members of Apec into a trade pact. But since such a deal would involve the US promising even more trade liberalisation with China, a key member of the bloc, it looks to most like a non-starter. Even some Democrats promising bipartisanship on trade issues balk at going any further with China until they are happy it is playing by the rules it has already signed up to.

Barack Obama, a contender for the 2008 Democratic presidential nomination, said frustration over relations with Beijing had emerged as a hot-button issue for “congressmen from states that have been hit by job losses in manufacturing”. “There are a number of incoming congressmen that want a new approach to engagement with China,” he said.

Even so-called “Blue Dog” Democrats – those with centrist pro-business policies – declare the first order of business on China is addressing outstanding differences over global imbalances, monetary policy, and enforcement of existing trade obligations.

“Democrats are anxious to start by sitting down with the Bush administration and hammering out these issues,” said an aide to John Tanner, a leading Blue Dog in the House of Representatives.

US business groups also rejected suggestions of a regional FTA, saying the Doha round of trade talks remained the best hope. “We need to press China for results on unmet obligations,” said Myron Brilliant, of the US Chamber of Commerce. And when even the fervently pro-trade hosts don’t think a deal is a runner in the near future, it seems unlikely many will dissent. “Establishment of the Free Trade Area in Asia-Pacific cannot be realised in the near future,” Tran Thu Hang, deputy director-general of the Vietnamese trade ministry’s multilateral section, told the state-controlled Vietnam News. “The orientation of the current free trade agreements are such that it would require major changes in Apec’s mechanism.”

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't cut articles from and redistribute by email or post to the web.