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White House Threatening To Hold Up Trade Deals

published: May 21st 2011
source: Associated Press

The White House is threatening to hold up final passage of three coveted free trade agreements unless lawmakers expand retraining assistance for American workers who lose their jobs because of foreign competition.

The move comes as administration officials begin talks on Capitol Hill to finalize the agreements the White House reached to expand trade with South Korea, Panama and Colombia. President Barack Obama has said the deals are an integral part of his economic agenda, and the pacts have broad Republican support.

While administration officials have long said they supported expanding the Trade Adjustment Assistance Program, or TAA, Monday's announcement was the first time aides said they would be willing to delay the deals without it.

"We will not submit the FTAs without an agreement on an enhanced TAA," said Gene Sperling, director of the National Economic Council. "But we also believe we can work on congressional leadership to get that accomplished."

The assistance program was expanded two years ago as part of Obama's stimulus package to include aid for more displaced workers, but the expansion expired in February. Labor unions and some key Democratic lawmakers have demanded the expansion as a condition for supporting the trade deals.

While Republicans have typically been supportive of the TAA program, several GOP lawmakers have expressed concerns that the level of spending under the 2009 expansion is no longer sustainable given the Capitol Hill negotiations on debt and deficit.

Administration officials said Monday they did not have an estimate for how much it would cost to renew the assistance program. Sperling said the administration is working with Congress on ways to fund the program so it doesn't add to the deficit.

Utah Sen. Orrin Hatch, the top Republican on the Senate Finance Committee, said the administration's decision to link the trade deals with the assistance program was "hugely disappointing."

"With our economy struggling and our nation broke, it's time to stop the excuses and give our exporters fair access to international markets," Hatch said in a statement.

The White House and Republicans had appeared to have a breakthrough on trade earlier this month when the administration started informal talks with congressional staff on the three trade deals. The talks are the first step toward the final ratification process.

The administration wanted lawmakers to pass the South Korea deal, the largest of the three, first while it negotiated outstanding issues with Colombia and Panama. But Republicans demanded the White House send all three agreements together, threatening to block the confirmation of a new commerce secretary and any trade-related nominees if that didn't happen.