‘Fast-Track’ Trade Measure OKd by Senate

WASHINGTON —  The Senate agreed Thursday to expand President Bush’s authority to negotiate new trade agreements but reserved the right to strike provisions that could endanger U.S. jobs.

The Senate voted 66 to 30 to approve its modified version of trade promotion authority, which empowers the president to negotiate trade pacts that Congress can accept or reject, but not amend. The House approved its version of “fast-track” authority in December by one vote.

In addition to carving out an important exception to the president’s negotiating authority, the Senate insisted on packaging fast-track with a big expansion of federal benefits for workers who lose their jobs because of imports.

The changes may be too much for the House to accept, setting the stage for weeks of haggling over compromise legislation. Sponsors said they hope to have a final bill ready for Bush’s signature by August.

Even so, advancing any kind of bill was seen as a big accomplishment for trade advocates, who have been fighting a powerful tide of protectionist sentiment with congressional elections only months away.

“This is a great victory,” said Sen. Phil Gramm (R-Texas). “George W. Bush will use this authority on a very large scale for free trade in the Americas and free trade all around the world.”

U.S. Trade Representative Robert B. Zoellick said trade promotion authority “will provide the administration with the tools to pry open markets and negotiate the best deals for our workers, farmers and consumers.”

But critics said the United States has been entering into trade deals with governments that allow businesses to exploit cheap labor and degrade the environment. “It’s just ‘free trade, free trade, free trade,’” said Sen. Byron L. Dorgan (D-N.D.). “Nobody cares about the word ‘fair.’ Nobody will utter it in the U.S. Senate.”

For 20 years every president from Gerald R. Ford to Bill Clinton enjoyed some form of trade promotion authority. But fast-track lapsed in 1994 after the bruising battle over the North American Free Trade Agreement, and the Republican-led Congress rebuffed Clinton’s request to renew it.

Bush wants fast-track authority to help him extend trade preferences to key allies, such as Morocco, an Arab nation that has supported the U.S. anti-terrorism campaign. A larger objective is approval of a Free Trade Area of the Americas, which would expand NAFTA to include every nation in the hemisphere except Cuba.

The biggest prize would be completion of a new global trade agreement on terms favorable to the United States. A new round of negotiations was launched in November in Doha, Qatar, but the administration has said that it cannot advance U.S. interests effectively without fast-track authority.

“You can’t have 535 people in Congress negotiating with other nations,” said Sen. Charles E. Grassley (R-Iowa). “If we’re going to succeed at the negotiating table, our partners need to know that the person they’re talking to has the authority to negotiate.”

But the outlook for passage of the trade bill has been clouded by an amendment allowing the Senate to potentially amend or remove provisions of future trade pacts that would weaken existing laws designed to protect U.S. industries from unfair trade practices. Such laws allow the government to impose protective tariffs if foreign firms “dump” their goods in U.S. markets at less than the cost of production or if a surge of imports jeopardizes U.S. manufacturers. Bush invoked the latter protection when he imposed stiff tariffs on imported steel earlier this year.

Administration officials have said the amendment, sponsored by Sens. Mark Dayton (D-Minn.) and Larry E. Craig (R-Idaho), would cripple America’s ability to promote trade liberalization around the world because other governments would be unwilling to strike deals that could be picked apart by the Senate.

They have hinted that Bush might veto the legislation if it reaches his desk with the amendment intact.

Grassley predicted that the provision would be removed in conference. “You can’t have Dayton-Craig in there and still have fast-track,” he said.

The struggle to renew fast-track reflects the gradual unraveling of the bipartisan business-labor coalition that helped previous administrations pass trade measures. The politics of trade have become increasingly polarized in recent years and could influence the outcome of tight races in some congressional districts this fall.

Underlying the debate is growing public unease with the forces of globalization and their effect on employment in the United States. The reduction of quotas and tariffs on imported goods has eliminated hundreds of thousands of jobs in steel, textiles, furniture and other industries facing competition from foreign producers who pay lower wages and face fewer workplace and environmental restrictions.

“There never has been any such thing as free trade, and never will be,” said Sen. Ernest F. Hollings (D-S.C.), whose state has been hard hit by textile layoffs. “It’s like world peace.... It won’t happen in my lifetime.”

The administration and its allies, including many mainstream economists, argue that trade liberalization produces huge benefits for the nation as a whole. Lower-cost imports enable Americans to buy more for their money, causing living standards to rise. The administration estimates that previous trade pacts are saving the typical family $2,000 a year. Expanded trade also creates jobs in industries that export goods and services, offsetting employment losses in other sectors of the economy.

The bill tries to help the casualties of globalization by significantly expanding Trade Adjustment Assistance, a federal program providing temporary income and vocational training to people who lose their jobs because of imports.

The Senate measure would extend the cash payments, which average about $220 a week, by six months so they would not run out before the end of a two-year training program.

It would provide a new tax credit to help trade-displaced workers retain their health insurance and would create a wage insurance program to provide temporary assistance to older workers who take lower-paying jobs instead of enrolling in training programs.

The bill also extends adjustment-assistance eligibility to farmers, ranchers, fishermen and workers employed by suppliers, subcontractors or other “secondary” businesses.

The adjustment-assistance provisions would triple the program’s costs to an estimated $1.2 billion a year and are likely to be opposed by House Republicans. But supporters say they will provide Bush with several critical votes from House Democrats who opposed fast-track in December.

The Senate measure also would renew the Andean Trade Preference Act, an expired law that waived tariffs on products from Bolivia, Colombia, Ecuador and Peru.

The Bush administration says preferential treatment is needed to help wean those countries from cocaine production, but it is opposed by U.S. textile interests who say it jeopardizes American jobs.

In addition, the bill would extend the Generalized System of Preferences, which provides duty-free status to certain products from 140 developing countries.