Washington Post (11.22.07).

How a Breakthrough in Trade Broke Down in Congress.

By Juliet Eilperin

Just weeks ago, House Speaker Nancy Pelosi (D-Calif.) hailed the 285 to 132 vote in favor of the Peru Free Trade Agreement, which she had helped shepherd through the chamber, as a moment steeped in Democratic tradition.

"Today, the House built upon President John F. Kennedy's legacy of free trade by passing an agreement that promotes both free and fair trade," she said. She added that the pact "represents a remarkable breakthrough, because Democrats were able to secure enforceable, basic labor rights and environmental standards in the core text of a free trade agreement."

On one level, Pelosi was right: 109 Democrats voted for the bill, along with 176 Republicans, and it marked one of the biggest trade breakthroughs in decades. But the fact that more significant trade agreements, like the one with Colombia, will probably not make it to the floor in this Congress highlights the harsher side of the politics of globalization.

Things seemed destined to be easier on Jan. 18, when newly anointed House Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.) welcomed two Republicans into his Capitol office: Rep. Jim McCrery (La.), the panel's ranking minority member, and U.S. Trade Representative Susan C. Schwab.

The three spoke about the prospects for a congressional deal on trade, something the administration desperately wanted. Passing trade pacts in the House has been difficult for decades, regardless of who was in power. In 1993, President Bill Clinton spent a big chunk of his political capital to push through the North American Free Trade Agreement by a vote of 234 to 200 in the House, and the political climate has worsened over time. During the 109th Congress, House GOP leaders managed to pass the Central American Free Trade Agreement 217 to 215. While 102 Democrats had backed NAFTA, just 15 voted for CAFTA.

"We don't have people walking out of Wal-Mart saying, 'Thank God for trade with China,' " Rangel said, adding that opponents of free trade on CNN and elsewhere have effectively linked recent U.S. job losses to trade pacts. "It's the Lou Dobbs thing: 'It's all due to trade.' "

The trade representative launched into a defense of the benefits associated with lower tariffs and greater economic engagement overseas. But McCrery broke in.

"There's no question the general level of support for trade in the country has gone down," said the congressman, known for his impeccable Southern manners and mastery of arcane tax and trade law. "It doesn't matter if it's gone down based on reality or perception. We need to allow our members, Republican and Democrat, to vote on something that will renew the faith of people who used to have faith in trade and now are having doubts."

That blunt message, delivered in an office that Republicans had just vacated weeks before, was a vivid sign of how much things had changed with the Democratic majority. If the Bush administration wanted approval for new accords with Peru, Panama and other nations, it had to change the way it operated.

On Feb. 6, Schwab met with AFL-CIO President John J. Sweeney in her office, the first one-on-one meeting the two had ever had. The labor leader, 73, did not seem like a natural White House ally at the time: His 10-million member organization had spent $40 million and mobilized more than 200,000 volunteers to defeat GOP congressional candidates in 2006, and the AFL-CIO had fought CAFTA and every other trade pact the Bush administration had ever devised.

The meeting was not a stunning success: To Sweeney, the session confirmed the fact that the administration was still reluctant to put language guaranteeing labor and environmental standards into its core trade agreements with other countries.

"We assumed the policy was not changing, and we were right," Sweeney said in an interview.

The fact that the White House had to negotiate in earnest with Democratic leaders on trade demonstrates how Washington's political center has shifted since last November, and how labor's fortunes has risen along with its foremost political ally. But the result of those trade talks -- the two agreements headed for a vote this fall have spurred tension and anxiety within Democratic ranks -- also demonstrates the limits of the Democrats' power and that of the unions that support them.

Rangel and Sweeney face intense pressure from the left because rank-and-file Democrats and union members see international trade as a force that has undermined the country's manufacturing base and has cost Americans their jobs. Sweeney notes that the United States has experienced "the loss of 3 million good, middle-class jobs since 2000," and that even workers who have not lost their jobs have seen some of their communities suffer economically in recent years.

So this spring the Democrats, in concert with union leaders such as Sweeney, crafted a long list of requirements for any trade deal with the administration. The list included requiring other nations to "adopt, maintain and enforce basic international labor standards in their domestic laws and practices" and to implement and enforce multilateral environmental agreements; ensuring that foreign investors do not enjoy greater investment protections than U.S. citizens; and providing guarantees of access to affordable prescription drugs.

Early on, Sweeney made it clear that he and other union leaders wanted any trade pact to include the International Labor Organization's 1998 Declaration on the Fundamental Principles and Rights at Work, which calls for freedom of association, the right to bargain collectively, a ban on forced labor and child labor, and no employment discrimination.

Rangel and other senior Democrats adopted labor's demand, and made it clear to the administration that no trade agreement would make it to the floor unless it included the ILO standards, which is a more stringent requirement than had ever been achieved during the Clinton administration.

For six years, labor -- along with the Democrats -- had been largely sidelined when it came to trade negotiations, but now one of its top leaders has gained access to the lawmakers making the deals. Rangel and Sweeney, according to the chairman, regularly have "friendly meetings about his concept of international trade policy."

"It just shows you what can be accomplished when the right people get elected to office," Sweeney said of the Democratic majority and his newfound position on Capitol Hill. "I've been thanking God every day for this."

After nearly four months of negotiations, the administration and congressional leaders reached an accord that met all of the Democrats' initial requirements. Just as Sweeney saw the new leadership as the answer to his prayers, those leaders saw the trade pact as a sort of miracle.

"We were able, thank God, to take yes for an answer," said Democratic Caucus Chairman Rahm Emanuel (Ill.), a member of the Ways and Means Committee.

Sweeney was meeting with foreign labor leaders in Berlin when the deal was struck on May 10, but both Rangel and Pelosi called to inform him of the news. At about midnight Berlin time, Sweeney spoke to the speaker on the phone. "This is a historic agreement," he told her.

But moments later, as Pelosi walked into the Speaker's Dining Room to hold a news conference with Schwab and Treasury Secretary Henry M. Paulson Jr., she found herself facing hostile Democrats. A handful of lawmakers opposed to the trade pact with Peru -- including several Democratic freshmen who had campaigned on the issue -- had squeezed themselves into the tiny room on the Capitol's first floor and stared stony-faced at the speaker.

"We're not against trade. We just want a trade system that works," said Rep. Betty Sutton (D-Ohio), a former labor lawyer who listened skeptically as the bipartisan group outlined its achievement.

Many of Sweeney's fellow union leaders delivered even harsher assessments of the new trade accord. Change to Win, the six-million member federation that now ranks as the AFL-CIO's main rival, issued a news release on May 25 saying that the agreement "does not represent the basis for the type of new U.S. trade policy that this nation desperately needs."

Even some leaders of the AFL-CIO's own affiliates rejected the agreement, saying they do not trust President Bush with the enforcement of its labor provisions.

After all the horse-trading, Sweeney will be on the sidelines for those trade votes. He said that while he appreciates the "dedication and resolve" of Rep. Sander M. Levin (D-Mich.) and Rangel, the new trade accords do not go quite far enough in addressing workers' concerns. "Over the last couple of decades, we have dug ourselves into a deep hole with flawed and misguided trade policies, and it will take a big and sustained effort to dig out," he added.

Rangel said he knew all along that his union allies might not endorse his deal with the White House. "The fact that you did it for labor didn't guarantee that they would be jumping up and down in the end," he said.

It is a dilemma that leaves Rep. Xavier Becerra (D-Calif.), a Ways and Means Committee member, wondering whether, in incorporating provisions on environmental and labor standards in the deal, his party has proven that it can deliver benefits to the working men and women who helped return it to power.

"Trade has to be sold as something that's good for us. This deal goes partway towards addressing that. Whether it goes all the way . . .," the congressman said, his voice trailing off.

Staff researcher Rena Kirsch contributed to this report.