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Obama faces new push from Dems on WTO

By Ian Swanson - 10/21/09 05:00 AM ET

President Barack Obama is under increasing pressure from House Democrats to chart a new course for international trade talks.

Trade unions and public interest groups backed by about half the Democratic Caucus want Obama to renegotiate the agreements that form the World Trade Organization (WTO) and radically shift the agenda from talks launched by the George W. Bush administration.

They want labor rules to be strengthened and new rules in the trade of services to be dropped, particularly in the aftermath of the financial crisis.

The pressure comes as the administration prepares for a Nov. 30-Dec. 2 trade ministerial in Geneva with all 153 members of the WTO that is seen as a key to unlocking the deadlocked negotiations.

The meeting will take place 10 years to the day after protesters captured the world’s attention and brought the debate over globalization to the mainstream by disrupting a similar WTO meeting in Seattle.

A decade later, the number of trade skeptics in Congress has only grown amid worries of rising protectionism in the wake of the worst global recession in decades.

Legislation introduced by Rep. Mike Michaud (D-Maine) calling for a review and renegotiation of all existing trade deals has gained 124 signatures in Congress, including those of several committee chairmen.

It has the support of progressive leaders in the Democratic Caucus such as Rep. Jan Schakowsky (Ill.) and Lynn Woolsey (Calif.), rising leaders like Rep. Debbie Wasserman Schultz (Fla.) and conservatives such as Rep. Heath Shuler (N.C.).

Michaud’s legislation faces a steep climb in Congress, which is unlikely to force the administration to renegotiate every trade deal on the books.

But it could give the administration a nudge to shift gears in the talks. Obama’s economic and political team, which has been busy with the economic crisis and healthcare reform, so far has not indicated whether it wants to change the policies pursued by the Bush administration.

Lori Wallach, the director of Public Citizen’s Global Trade Watch, which supports Michaud’s bill, believes the support behind the legislation served as a wake-up call for the administration. She thinks the administration recognizes that it can’t deliver more of the same on trade given public skepticism, but describes the White House’s policy on the WTO talks as an “open book.”

United Steelworkers President Leo Gerard scored a major victory when his union’s petition for tariffs on tire imports from China was accepted by Obama. He’s “impressed” with Obama’s enforcement of trade laws, but a bit leery of the WTO talks.

“I’m still apprehensive because … there’s not enough attention being paid at the moment,” he said this week.

The U.S. and other countries face calls from business groups in the run-up to the Geneva meeting to jumpstart the stalled WTO negotiations, which were launched in Doha, Qatar, months after the Sept. 11 attacks in a bid of solidarity between rich and poor countries. They’ve been stuck ever since.

Though international trade has begun to rise again after the depths of the recession, economists still worry protectionist measures could multiply, stemming growth. Obama has been criticized for “Buy American” provisions in the economic stimulus package, and more recently for the decision to impose tariffs on Chinese tires.

Obama’s dilemma is that the steel tariffs were supported by most of his party, which is itching to move in a different direction on trade.


Don’t call it a stimulus

Congress and the White House are considering at least $76 billion in provisions to create jobs or help people suffering from the recession. Just don’t call it a second stimulus.

Officials have taken pains not to use the term, partly because moving a second stimulus suggests the first $787 billion package wasn’t successful.

White House Chief of Staff Rahm Emanuel avoided the word stimulus last week in an interview on PBS with Judy Woodruff.

“It’s hard to find somebody who wants to call whatever this is that you’re likely to do, may do, a stimulus,” Woodruff said. “But, in effect, it would be kind of a stealth stimulus, wouldn’t it?”

In answering Woodruff, Emanuel didn’t use the word stimulus a single time. He repeatedly said the president is pressing his economic team for “ideas” on how to create jobs.

Most of the spending under consideration looks like a stimulus, partly because most of the ideas in play were in the earlier stimulus bill.

To help those out of work, Congress may extend unemployment benefits (cost: $2.4 billion) and health subsidies provided through the COBRA program ($25 billion).

A Senate bill to extend the tax credit for first-time homebuyers may be expanded so that most others in the market would qualify ($16 billion).

Business groups want several tax breaks extended, adding tens of billions in provisions intended to spark growth. These include measures allowing companies to carry back losses on their tax returns to get refunds on taxes paid. A similar provision costing about $20 billion was dropped from the earlier stimulus.

Another provision from the first stimulus called “bonus depreciation” allows companies to deduct a portion of their new capital expenditures from their tax bills.

There’s talk about extending that provision as well.

A few other items weren’t included in the $787 billion stimulus but are being talked about now.

They include President Barack Obama’s proposal last week to send $250 checks to senior citizens who will not see a cost-of-living increase in this year’s Social Security checks ($13 billion).

Then there are the proposals to give tax incentives to businesses that create jobs. It’s unclear how much that would cost, though Clint Stretch of Deloitte Tax reckons it would be expensive. “It’s very difficult to estimate,” he said.

Add the provisions up, and you get at least $76 billion in expenses. That’s a little less than half the cost of the $168 billion stimulus package signed by President George W. Bush in February 2008.


Source:
http://thehill.com/homenews/administration/64005-obama-faces-new-pressure-on-wto-from-own-party
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