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Monday, 29 July, 2002, 08:03 GMT 09:03 UK
US trade bill clears key vote
Steel plant
US steel tariffs led to global fears of protectionism
President George W Bush is close to getting full trade negotiating powers, following a close vote in the lower house of Congress.

On Saturday, the House of Representatives voted 215-212 to support a compromise agreement on the Trade Promotion Authority Bill, which gives so-called 'fast track' powers to the president in future trade talks.


The most historic trade legislation ever passed by Congress

Senator Max Baucus
Mr Bush, who met House Republicans personally to lobby for the bill, is now likely to clinch the presidential trade negotiating powers that eluded his predecessor. Congressional Republicans voted not to renew the 'fast track' authority in 1994.

Without those powers, any trade deal negotiated by the United States would be subject to revision by Congress, undermining the President's authority.

President Bush has been seeking these powers since he was elected in November 2000, but has faced stiff opposition.

The deal is still subject to a vote later this week by the Senate, but it previously backed an earlier version of the bill by a two to one majority.

The House vote was much closer, with many Democrats opposing the trade deal.

House Minority Leader, Democrat Dick Gephardt, opposed the compromise, saying the final trade package "still contains many of the problems" of the original bill.

But Senate Finance Committee Chairman Max Baucus, the Democrat who negotiated the compromise deal, said the package would become "the most historic trade legislation" ever passed by Congress.

Patrick O'Brien, director of governmental affairs at The Council of the Americas - representing corporations and multi-nationals operating throughout Latin America - told the BBC's World Business Report the Bill is critical to America's ability to participate effectively in trade agreements.

Reaching a deal

Sharp differences had emerged in Congress over the trade bill, with Democrats insisting that there should be additional benefits for workers who lose their jobs because of the extension of free trade.

Under the compromise deal, workers who lose their jobs would receive a tax credit to pay for 65% of their health insurance costs, and benefits would be extended to workers only indirectly affected by an increase in imported goods.

Thea Lee, assistant policy director of AFL-CIO - the umbrella organisation representing America's trade unions - is not impressed.

"This President has not spent a lot of energy taking care of American workers," she said.

"He has done a very good job of looking after the interests of huge multinational corporations and he has done a horrible job of looking after the interests of American workers."

A tough Senate amendment has been dropped.

This would have prevented the President from agreeing any changes in the anti-dumping laws - used by the US recently to introduce big increases in steel tariffs recently to protect its domestic industry.

Job fears

Trade issues have always been controversial in the US, where labour unions have long argued that free trade agreements with Mexico and China have put US jobs at risk.

The issue boiled over in Seattle in 1999 as labour and environmental protestors fought police at a meeting of world trade ministers.

A cornfields in Kansas in a thunderstorm
A storm is brewing over US farm subsidies

The following year, President Bill Clinton fought an uphill battle to unite his own Democratic Party to support a more open trade relationship with China.

Even as he slapped tariffs on imported steel, President Bush has always claimed to attach a high priority to free trade as part of his economic strategy.

He launched a drive for a Free Trade Area of the Americas in his first year in office.

And the US agreed to a new round of world trade talks after negotiations in Doha in November.

It is now engaged in difficult negotiations, with increased US agricultural subsidies one of the key sticking points.

Despite his rhetoric, there are doubts that Mr Bush will provide the global leadership needed to push forward the world trade negotiations.

 WATCH/LISTEN
 ON THIS STORY
Patrick O'Brien, The Council of the Americas
"We are hopeful this will add a lot of momentum to the Free Trade Area of the Americas"
Thea Lee, AFL-CIO
"He [President Bush] has done a horrible job of looking after the interests of American workers"

World trade talks

Farming

Steel wars

Other disputes

Regional trade deals

Background

FORUM
See also:

24 May 02 | Business
23 Mar 01 | Business
19 Apr 01 | Business
22 May 02 | Business
16 May 02 | Business
15 May 02 | Business
14 May 02 | Business
10 May 02 | Business
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