Path Forward Still Uncertain for FTAs

Despite deal to move agreements the process is still stalled.

Published on: Aug 30, 2011

For all the 'hoopla' earlier this summer that there was a White House-Hill deal to move long-stalled free trade agreements to a vote, a path forward is still 'elusive'.

Farm groups reacted enthusiastically in July, when Senate Minority Leader Mitch McConnell, R-Ky., announced Republicans agreed to separate votes on the FTAs and Obama's demand to renew help for trade-displaced workers.

White House Chief of Staff Bill Daley told the Chamber of Commerce, his boss would send to the Korea, Columbia and Panama FTAs to Capitol Hill.

But since then, President Obama has derided Congress for failing to act, even though he never sent up the trade deals.

I think that it is somewhat inaccurate for the President to say that there's nothing stopping the Congress from voting on the bills, but they don't have the bills to vote on yet," said Paul Drazek, a former USDA trade advisor during the Clinton Administration. "The President would respond to that that he'll send the bills as soon as he has assurance from Republicans that they will vote on Trade Adjustment Assistance." 

Obama needs TAA to "appease" his union backers, but many Republicans oppose it over cost and could still 'water it down' with amendments.  The mistrust has only grown worse with this summer's debt ceiling debacle.

"I think people probably thought, especially on the Senate side, that a way forward had been found," Drazek said. "But I'm not sure all the I's had been dotted and the T's crossed in terms of a real understanding among the parties as to how this would actually happen." 

And Drazek points out that it was never clear the House was on board with the dual FTA and Trade Assistance votes. What is clear, is a majority of both houses probably now feels the FTAs must be passed to reverse declining U.S. market share.

"We are already seeing trade losses, export losses for the U.S. and that means job losses," Drazek said. "Politically both sides would argue that it's not their fault, it's the other side's fault, no one is going to take the blame for it."  

Meanwhile, America's 81% market share in Columbia for wheat, corn and soybeans fell to 19% last year. The European Union and Canada have implemented their own deals with Columbia or Korea, and the American Farm Bureau Federation has cut its estimate of the three FTA's value for agriculture to some $2.3 billion, down from about $2.8 billion.