TWN Info Service on WTO and Trade Issues (Apr08/03)
22 April 2008
Third World Network

Trade: Congress-Bush spat kills any hopes of "fast track" for WTO deal
Published in SUNS #6454 dated 14 April 2008

Geneva, 11 Apr (Martin Khor) -- Whatever slight chances that a WTO modalities deal in May would be able to tempt the US Congress to give President Bush a special fast track authority for an overall Doha deal were killed in the huge spat over the past two days between the US Congress and Bush over a US-Colombia free trade agreement.

The Democrat-led House of Representatives voted on Thursday to change the fast-track rules so that it would not have to take a vote at the specified period on the proposed US-Colombia FTA bill that the Bush administration sent to Congress on 7 April.

The FTA and the bill is covered by the previous Trade Promotion Authority, as Bush submitted plans on the draft FTA to Congress before the TPA expired at the start of July 2007.

Under the TPA, both Houses of Congress are obliged to take a vote on a trade deal 90 legislative days (60 days by the House of Representatives and 30 days after that by Senate) after it is submitted by the President, and the vote has to be a simple yes or no (without amendments).

On 7 April, the US Trade Representative Susan Schwab said that Bush had signed a letter submitting to Congress the FTA and called on Congress to approve the deal. She said that April 8 is the last day the bill can be submitted as it is 90 legislative days before 26 September, the date Congress estimates it will adjourn, according to an article in Inside US Trade.

However, the House Democrats, led by Nancy Pelosi, decided to remove the TPA timeline from consideration of the FTA. On 10 April, this was successfully voted on at the House of Representatives, thus canceling the 90 legislative day deadline for Congress to vote on the FTA.

This means that the Congress need not vote on the FTA within the 90 day period, or at all. The wide expectation is that the US-Colombian FTA will not be voted on during the term of office of Bush.

The House Democrats explained that they made this unprecedented move because the Bush administration had not followed the tradition of first referring the bill to the relevant committees in Congress for consultation, before sending it formally.

Bush and his top officials have angrily reacted to the House decision, and interestingly enough they have admitted that the Congress measure to change the TPA rules, and the treatment of the US-Colombian FTA, would erode the confidence of the United States' trade partners to negotiate trade deals with it.

This latest development has significance for the current WTO Doha negotiations. The main proponents of getting an overall Doha deal done by December, and thus a deal on modalities in agriculture and NAMA by May, have argued that these dates are imposed by the need to get Bush to sign on to an overall Doha agreement before he leaves office.

A modalities deal in May, if it is attractive enough to the US, may still get Congress to pass a new special TPA just in relation to the Doha negotiations. Or so one version of the argument goes.

But the latest developments surrounding the US-Colombian FTA puts paid to any such hopes.

Firstly, as Schwab revealed, the Congress is expected to adjourn on 26 September. The deadline for submitting a bill to it to approve a new TPA must have passed.

Secondly, if Bush is unable to get Congress to even consider a bill on an FTA which has already been on the table between the Administration and Congress for more than a year, and which moreover is covered by fast-track authority under the previous TPA, there is no hope that the same Congress is going to bend backwards to please Bush by considering a WTO Doha deal which is going to be rushed to it, a deal which is also much more complex that an FTA with a single country.

Thirdly, politicians and diplomats of countries that are negotiating trade deals with the US, especially the WTO Doha deal, must be feeling very uncertain about the negotiating status of the present Bush Administration officials, and the legal status of any agreement that is struck between them and the present US administration.

This was itself recognized by Bush, his officials and leading Republican Congress members. "The House has severed a bond of trust between the executive branch and the Congress, and with our trading partners," said Bush after the Congress vote.

"By breaking this bond, Democrats have undercut not just this Administration but future Administrations as well. This will weaken our nation's ability to negotiate fair trade agreements..."

Schwab said the House move could be "devastating" to US trade policy. "It could really be devastating not just to the Colombian FTA but to broader US trade policy going forward and to our ability to negotiate and implement agreements." She added that it is difficult to know what the impact might be on the Doha Round. (WTO Reporter 10 April).

House Republican Leader, John Boehner, said the move by the Democrats would wreak havoc on future trade negotiations. "What nation would conclude a treaty with the United States knowing that Congress can change the rules of the game after it is negotiated?"

Ways and Means Committee ranking Republican member Jim McCrery said the action would "damage US credibility abroad and lead US trading partners to rightfully question the commitments of the US in trade negotiations", according to an article in WTO Reporter (10 April).

At the WTO, some diplomats are quietly digesting the news from Washington. The Ambassador of a leading developing country said that if there were doubts whether the US administration would get a "fast track" status for a Doha agreement, the quarrel between Bush and the Congress has settled this question once and for all.

"Now it is no longer a question of rushing a modalities deal in order to help the US to get fast track to approve the final deal," he told SUNS. "There is no more hope for fast track. There is not even a Congress for the President to send a Doha bill to approve.

"Thus we seem to be hoping for a deal to be done in December so that Bush can pass it on to the next President. But we don't even understand the legal status of such an agreement signed by one President and the process by which it can be handed over to the next President. Or what the next President is going to view this deal or how he will handle it with his Congress..."

Another Ambassador remarked that it had been clear to her for some weeks now that there would not be any TPA obtained for any Doha agreement that may be concluded this year.

"We are continuing to negotiate, even though we are not sure at all what this means in terms of the US making commitments, because no one wants to ask the difficult question of whether we should be negotiating at all now.

"No one wants to be blamed for stopping the negotiations, so the question is not asked. But if the negotiations go badly, and there is a blame game, then this issue of there being no fast track and so on could emerge quickly." +