Future of Free Trade Agreements

On April 8, 2008, President Bush sent the U.S.- Columbia Trade Promotion Agreement to Congress for approval within 90 days under "Fast-Track" negotiating authority (also known as Trade Promotion Authority (TPA)). Under fast track negotiating authority, the President of the United States has the authority to negotiate trade agreements that Congress can either approve or reject, but cannot amend or filibuster. Fast track negotiating authority is granted to the President by Congress and was in effect from 1975 to 1994 pursuant to the Trade Act of 1974 and from 2002 to July 1, 2007 pursuant to the Trade Act of 2002. It has not yet been renewed. However, the authority will be available for Congressional consideration of free trade agreements with Peru, Panama, and South Korea, which were all signed by the United States before the deadline.

In an attempt to have the Colombia FTA decided before the November elections, the Bush Administration introduced the agreement to Congress on April 8, 2008. However, in an unprecedented move, the U.S. House of Representatives voted 224-195 on April 10, 2008, to exempt the implementing legislation of the Columbia FTA from the fast-track authority of the Trade Act of 1974 via a one sentence resolution.  This removes the fast-track timeline for the Columbia FTA. Although President Bush has accused Speaker Nancy Pelosi of "killing" the agreement with a close U.S. ally, Pelosi has responded by insisting that the White House and Congress agree on a new U.S. aid package before a vote is taken on the Colombia FTA.

Democrats have expressed concern over violence in Colombia against union leaders and would like stronger labor and environmental provisions to be included. However, supporters of the FTA argue that about 90% of imports from Colombia already enjoy duty-free treatment under the Andean Trade Preferences Act while U.S. imports into Colombia do not receive similar treatment. Once the Colombia FTA is signed, 80% of U.S. imports into Colombia will become immediately duty-free, and all remaining tariffs would be eliminated within a decade. Additionally, supporters state that Congress was able to agree upon a very similar free trade agreement with Peru last year that was renegotiated to included stronger labor and environmental provisions. (See this opinion by James Baker III in support of the Colombia FTA.) Support for the Colombia FTA has been strong in newspaper opinion pieces across the nation, with little opposition similarly expressed. (See here for links.)

Both Senator Hillary Clinton and Senator Barack Obama oppose the Colombia FTA, siding with the AFL-CIO, which is fighting the agreement because it believes Colombia has not done enough to stop killings of trade unionists and bring their killers to justice. Republican Senator John McCain supports the Colombia FTA.

Senators Clinton and Obama also oppose the U.S.-South Korea free trade agreement because they say it fails to eliminate trade barriers to imports of American cars, though the U.S. and South Korea recently resolved a 4 year-old trade dispute over beef.

The free trade agreement with Panama became endangered last September when Panama's National Assembly elected Pedro Miguel Gonzalez to lead its legislature. Gonzalez is wanted in the U.S. on charges that he killed a U.S. soldier in 1992. However, Gonzalez has said he will not seek a second term this year, giving the trade community hope that the smallest FTA could still pass.

The political atmosphere with regard to trade agreements will likely affect Congressional consideration of the Doha talks. Trade officials from India and the U.S. are set to meet on May 8, 2008 to brainstorm ways to jump-start the stalled WTO Doha round of talks. A ministerial meeting of WTO representatives will take place in May in Geneva. The Doha Development Round commenced in November 2007 in Doha, Qatar. Its objective is to lower trade barriers and permit free trade while taking into account the differences in development levels of the negotiating countries. Talks have been stalled due to differences between the EU, US, and Japan on one side and India, Brazil, China, and South Africa, on the other. The main source of contention has been the opening up of agricultural and industrial markets in various countries and the cutting of farm subsidies in the developed countries.