Ava Leone looks into the trade implications of the Democrats' triumph in the Congressional elections Now that the Democrats have gained both chambers of Congress, concerns are raised that United States President George W Bush's ambitious trade agenda will grind to a halt at the hands of a protectionist Congress. Although such concerns are generally overstated, there will likely be at least one significant casualty of the mid-term elections -- fast track authority, the most important tool the president has in negotiating trade agreements. In addition to completed deals with Columbia and Peru, Bush is currently negotiating bilateral agreements with South Korea and Malaysia -- both of which could have trouble clearing the new Congress. More importantly, the Presidential Trade Promotion Authority (TPA), also known as 'fast track', is set to expire 30 June, 2007. Fast track allows the president to negotiate trade agreements that Congress may approve or kill, but cannot amend. This is an important signal to the international community of the president's power to commit the US to trade agreements, and a Congressional extension would be a significant political victory for Bush. At a time when Democrats are anxious to curb executive power, the prospects for fast track renewal are not bright. If TPA is allowed to lapse, the consequences could be severe. Klint Alexander, a former US Trade Representative and professor at Vanderbilt University, believes that the extension of TPA is "critical" to the success of the Doha Round. Developing countries are counting on the US and the EU to reduce farm subsidies and agricultural import tariffs, thus the president could find himself in a precarious position without TPA. "Should a deal eventually be reached, it will be difficult for the president to obtain Congressional support in farm state areas without TPA," notes Alexander. Thus the absence of TPA could preclude any final deals, and signal to other WTO members that the US negotiators lack the power to deliver. So, is an extension likely? According to Paul Pecorino, professor of Economics at the University of Alabama, there is "a good deal of protectionist sentiment in the Democratic Congress and some within the Republicans as well. If this were to pass it would require a coalition between Democrats and Republicans." Charles Rangel, the House's leading Democrat on trade policy, has not ruled out an extension of TPA, but Bush will likely have to accept a revised version granting concessions to the Democrats' voter base. The Democratic Party has long prided itself for protecting the American worker. The party's voter base has historically been comprised of various domestic interest groups including human rights activists, environmentalists, and labour interests -- all traditionally averse to free trade. If the campaign trail is any indication, such a coalition will be difficult to build. Several Democrats routinely censure "unfair" trade policies such as the North American Free Trade Agreement (NAFTA) and Central American Free Trade Agreement (CAFTA). One of the most critical opponents is Senator-elect Sherrod Brown, who has authored a book that attempts to refute the benefits of free trade for developing countries' economic growth. Myths of Free Trade: Why American Trade Policy Has Failed. As a representative in the House, Brown led the fight against both CAFTA and NAFTA. The newly-elected Senator has vowed to 'revamp US trade policy' in order to create jobs at home. And then there is senator-elect Bob Casey, who has promised to 'oppose any law that sends American jobs overseas' and frequently speaks to his Pennsylvania constituents about the negative consequences of NAFTA. Senator Byron Dorgan, the Democrats' leader in the Senate on trade issues, has also published his views in Take This Job and Ship It: How Corporate Greed and Brain-Dead Politics Are Selling Out America. According to Dorgan, America's current trade policy is draining the US of its wealth. China in particular is cited as an unfair trading partner, one which the Senator is currently seeking legislation to regulate. Despite these red flags, Alexander is not worried. He insists that the Democratic Party is not a threat to free trade: "It was the NAFTA negotiations that earned the Democratic Party its anti-free trade label. This label, however, is unjustified if you look at the entire history." Though vows to protect the American worker were rampant on the campaign trail, Alexander believes the Democrats as a whole are more pragmatic than some of their most audible voices may seem. If his predictions are right, the Democrats will pursue a 'fair trade' agenda, putting greater focus on issues of human rights, sustainable development and job transitioning programmes for American workers who must endure a period of unemployment as corporations move overseas in search of cheaper labour. Accomplishing such an ambitious agenda would certainly be a victory for the Democrats and do much to exonerate them of their protectionist reputation. If it is to succeed, however, the pragmatists of the group have their work cut out for them. Either way, the battle will be hard fought. Bush will soon be dealing with a Congress that is in no hurry to grant him favours.
