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Thursday, 1 August, 2002, 21:23 GMT 22:23 UK
Bush wins victory on US trade bill
The US Congress being addressed by President Bush
Bush lobbied Congress to approve the bill
The US Senate has voted to grant President George W Bush full trade negotiating powers.

The result was seen as a long-awaited victory for the White House, which has been seeking such powers for the President since he was elected in November 2000.


What it does immediately is unblock a whole series of trade negotiations and restores US negotiators to the forefront of talks

Jeffrey Schott
Institute for International Economics
The Senate, which was expected to approve the bill, voted 64-34 to restore the trade powers which had expired in 1994 and not renewed since then.

"[The bill] boosts the economy, it protects the American worker and it restores American trade prestige," said Senator Max Baucus, chairman of the Senate Finance Committee.

Separately, the Senate also passed on Thursday a $355.4bn bill to fund a massive US military expansion.

House approval

The Senate decision on the trade bill follows an earlier vote to pass the bill by the House of Representatives last Saturday.

The House 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.

This latest vote by the Senate also means that Mr Bush has clinched 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.

Mr Bush is expected to waste little time signing the bill into law.

Reaching a deal

Mr Bush personally lobbied Congress to pass the bill before leaving for the August break.

He argued that it would help promote economic growth and revive the business community's flagging confidence.

"What it does immediately is unblock a whole series of trade negotiations and restores US negotiators to the forefront of talks," said Jeffrey Schott, a senior fellow with the Institute for International Economics.

Before the agreement, 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 a 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.

A tough Senate amendment was also 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

The trade bill is seen as critical to Mr Bush's ambitious trade agenda, which envisions a number of bilateral, regional and global trade agreements by the end of his term in January 2005.

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.

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.

But despite Mr Bush's rhetoric, there are doubts that he will provide the global leadership needed to push forward the world trade negotiations.


World trade talks

Farming

Steel wars

Other disputes

Regional trade deals

Background

FORUM
See also:

29 Jul 02 | Business
24 May 02 | Business
23 Mar 01 | Business
19 Apr 01 | Business
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15 May 02 | Business
14 May 02 | Business
10 May 02 | Business
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