White House Ties FTA Approvals To Jobs Aid Package

by Leroy Baker, Tax-News.com, Washington

19 May 2011

Gene Sperling, Director of the National Economic Council, has disclosed that the United States' three pending free trade agreements (FTAs) with South Korea, Panama and Colombia will probably be delayed if expansion of the Trade Adjustment Assistance (TAA) programme cannot be agreed at the same time.

TAA provides a variety of re-employment services and benefits to workers who have lost their jobs or suffered a reduction of hours and wages as a result of increased imports or shifts in production outside the US. The TAA programme aims to help participants obtain new jobs, ensuring they retain employment and earn wages comparable to their prior employment.

At a recent hearing on the FTA with Colombia, the US Senate Finance Committee Chairman Max Baucus had already said: “As we move forward with these trade agreements, we also need to help American workers meet the challenge of global competition by enacting a robust, long-term extension of TAA in tandem with the free trade agreements.” However, the comments made by Sperling are the first time that the Administration has expressly linked the approval of the pending FTAs with TAA expansion.

Sperling has now pointed out that, even though technical discussions with congressional staff have begun on the draft implementing bills and draft statements of administrative action for the FTAs, the Administration could not present that implementing legislation to Congress without a prior agreement on TAA assistance for US employees who might lose their jobs because of the competition arising from the increased competition they would cause.

Despite the FTAs having Republican support in Congress, expansion of the TAA programme would encounter opposition as the party looks for additional spending cuts in order to reduce the federal government’s fiscal deficit. While no estimates have yet been given by the Administration concerning the level of expenditure which would be required, Sperling added that ways are being considered of providing funds so as not to affect that deficit.

However, the US Senate Republican Leader Mitch McConnell, immediately on hearing of the threatened delay to the FTAs, stated that: “The trade agreements with South Korea, Colombia and Panama have been held up by the Administration for years and I was encouraged at the recent movement in the White House to act. So it was more than surprising that the President’s staff would again threaten to delay their implementation, particularly when the President himself agrees with us that these agreements will create jobs here in America.”

“It is my hope,” McConnell added, “that the President will reconsider this decision and will not allow anything to get in the way of Congressional consideration of these trade agreements and the jobs they’ll create.”

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