To: Peter Dierks who wrote (18428 ) 4/1/2007 11:15:42 PM From: Peter Dierks Read Replies (1) | Respond to of 71588 Who runs trade policy for Democrats in Congress? Saturday, March 31, 2007 12:01 a.m. EDT How's that bipartisan thing going in Washington? Not very well, despite those January promises. But Congress and the White House still have a chance to work together on something important--namely trade. The outcome may hang on who runs trade policy in the House: Charlie Rangel, or the AFL-CIO. At stake is the direction of U.S. trade policy for at least the next two years, and maybe longer. Bilateral trade deals with Peru and Colombia are already negotiated and await Congressional approval, and pacts with South Korea and Panama are in the works. President Bush's trade promotion authority also expires at the end of June, and if it isn't extended any future trade deal will be dead on arrival on Capitol Hill. So will the Doha Round of global trade talks. As Ways and Means Chairman, Mr. Rangel is the Democratic point man on trade in a now more protectionist House. The Harlem Democrat is often portrayed as a stock liberal by Republicans, but that sells him short. He's by temperament a deal-maker, and on trade he has shown he can be a statesman. In the 1990s, he worked with Newt Gingrich to expand trade with Africa, standing up to Jesse Jackson Jr. on the left and textile makers on the right. He also supported most favored nation trade status with China, joining Bill Clinton and Mr. Gingrich in bucking the AFL-CIO. Now we're about to find out if a reverse kind of trade bipartisanship can work, this time between a Democratic Congress and GOP President. Mr. Rangel has been talking to the Administration, and both sides have been open to compromise. In rough outline, the GOP would make some labor and environmental concessions as well as throw more money at job training and jobless insurance, in return for Democrats passing the trade pacts. But then this week House Democrats issued their new policy statement on trade that reads like a protectionist wish list. Among its lowlights: rewriting the Peru deal to require, among other things, that the Andean nation "adopt and enforce laws on logging Mahogany"; immediate action against "China and Japan currency manipulation"; adding global warming commitments to future trade agreements; and creating a new U.S. "Trade Enforcer" to file more trade cases in the World Trade Organization. Democrats are even raising their demands for labor standards as part of trade deals. They used to insist that U.S. trading partners agree to adopt International Labor Organization (ILO) standards in principle. The U.S. had a "safe harbor" in the deals because American labor protections are both strict and well enforced. But now Democrats are saying they want any trade deal to require that the U.S. also meet specific ILO labor standards. That's a backdoor way of rewriting U.S. labor law without having to assemble a majority in Congress. It's also a way of guaranteeing that trade deals won't pass in Congress, because few Republicans will go along with rules that make it easier for unions to organize and trump domestic sovereignty. Trade deals in recent years have required a House coalition of most Republicans and a smaller group of pro-business Democrats. This all bears the fingerprints of Sander Levin, the Michigan Democrat who runs the trade subcommittee on Ways and Means and is well known as the Congressman from Big Labor. The AFL-CIO opposes any free-trade deals of the kind that Bill Clinton promoted, and this "new" Democratic policy has all the earmarks of a poison pill. Mr. Levin is thought to have the backing of Speaker Nancy Pelosi, and if that's true then Mr. Rangel may well be rolled in his own committee. All of this reflects a surge left among Democrats on trade since the Clinton Presidency, and for reasons that have little to do with the economic evidence. U.S. job and wage growth has been healthy, even as more of the economy is trade dependent. A February study for the Business Roundtable found that one in five U.S. jobs now depends on exports or imports, compared with one in 10 in 1992. It also found that trade has a net positive impact on U.S. manufacturing jobs--far from the "giant sucking sound" of myth. Scuttling the Latin American deals would be especially bizarre because most of their goods already enter the U.S. duty free under the Andean Trade Preferences Act. U.S. exporters face an average Peruvian duty of about 12%. So under the Levin trade standards, Democrats are telling Peru and Colombia that, if the White House won't let the U.N. dictate U.S. labor standards, those countries can keep their tariff walls high. Huh? By the way, Caterpillar Inc. says it exports more heavy equipment to Columbia and Peru combined than it does to either of the far larger economies of Japan and Germany. Those exports come from East Peoria, Illinois and are made with union jobs. The Panama, Peru and Colombia pacts will mean a lot to those workers, if not to the labor chiefs who claim to represent them in Washington. Freer trade will also open up those Latin economies to more competition, accelerating growth and weakening the appeal of Hugo Chávez-style "populism." Democrats won Congress last year in part by promising change from the partisanship of the Tom DeLay Republican era. They've spent their first few months making a point on Iraq, and not much else. Now that he runs the most powerful committee in Congress, Mr. Rangel in particular will be judged by whether he can deliver on what we take to be his sincere desire to govern. Trade will be his big test. opinionjournal.com