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Newest trade war: Obama vs. Congress

By Jennifer Liberto, senior writer


WASHINGTON (CNNMoney) -- With President Obama in Latin America to talk trade this weekend, he faces a new stalemate at home on key treaties that he wants wrapped up this year.

When Republicans took control of the House after last year's election, free trade was the one of the few areas that experts predicted that President Obama and Congress would find common ground. But so far, ratification of three separate trade treaties with South Korea, Colombia and Panama has been slow going.

None of the treaties are as contentious as the North America Free Trade Agreement that was passed during the Clinton administration in the 1990s. And many congressional Republicans and Democrats want to ratify treaties with all three nations to help boost the U.S. economy, particularly since some say the treaties could add as many as 250,000 jobs.

"The U.S. needs these treaties to reassert its leadership in the world as a country that wants to promote free trade," said Mauro Guillén, a professor at the Wharton School of the University of Pennsylvania.

But treaty deals with Colombia and, to a lesser extent, Panama are threatening to trip up progress of a negotiated treaty with South Korea that awaits congressional ratification.

President Obama wants Congress to start work on the agreement reached in December with South Korea. But top lawmakers say no way - not until the president gives them treaties with Colombia and Panama. In fact, Senate Republicans upped the ante earlier this week, threatening to block the nomination of a successor to Commerce Secretary Gary Locke -- the president's choice for ambassador to China -- until they get all three treaties.

Even powerful Democrats, such as Senate Finance Committee Chairman Max Baucus, have said the South Korea treaty won't pass unless it's packaged along with treaties to Colombia and Panama.

But the Obama administration doesn't have a deal with Colombia or Panama yet. The administration says its big concern is that those nations haven't done enough to ensure they'll crack down on groups that ignore labor rights, and target and murder labor leaders.

In 2009, 101 union and labor activists were murdered worldwide, 48 of them in Colombia, according to a 2010 International Trade Union Confederation survey.

"The president has made it clear that we will not adopt agreements for agreements' sake," said Deputy U.S. Trade Representative Miriam Sapiro during a hearing on the Colombia treaty on Thursday. "There remain serious issues to be resolved," such as preventing violence against labor leaders, she added.

But some Republicans accuse the administration of dragging its feet on behalf of organized labor, which tends to support Democrats and oppose trade deals that cost union jobs here. Although the AFL-CIO has come out against the treaty with South Korea, the United Auto Workers has indicated its support.

"In trying to appease its union allies, the administration is willing to let these two agreements whither on the vine," said Sen. Orrin Hatch, a Utah Republican this week. "That would be profoundly disappointing. And it would ultimately amount to a blow to our entire economy."

The U.S. Chamber of Commerce, which also is lobbying for ratification of all three treaties, estimates that the United States could lose 380,000 jobs if the treaties aren't ratified while the European Union and Canada move ahead on their own agreements with the same nations.

Even it Congress eventually ratifies the treaty with South Korea, it won't please everyone. It doesn't remove South Korean tariffs on U.S. rice, according to the Congressional Research Service. Tariffs on beef are reduced, but gradually over over 15 years.

Treaties with Colombia and Panama will also reward some sectors more than others.

"There's always losers and winners," Guillén said. To top of page

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