Senate Votes to Renew Tariff Preferences, Extend Worker Aid

The Senate voted to renew trade preferences for developing nations after adding aid for workers who lose their jobs to overseas competition, opening the way for President Barack Obama to submit three free-trade deals.

Lawmakers voted 70-27 for the trade-preferences system today after adding a scaled-back version of Trade Adjustment Assistance negotiated by Senator Max Baucus, a Montana Democrat, and Representative Dave Camp, a Michigan Republican. Seventeen Republicans voted for the measue. The legislation moves to the House, where Speaker John Boehner said debate will begin only when Obama sends Congress the trade accords with South Korea, Colombia and Panama.

Obama has taken a different approach, saying he would send lawmakers the trade agreements reached under President George W. Bush once Congress commits to renew the worker aid.

“The process is beginning to show some momentum,” Bill Brock, a former Republican National Committee chairman and U.S. Trade Representative in the Reagan administration, said in an interview. “I’m modestly optimistic that this will put these issues behind us and allow us to move forward on some much larger objectives.”

Trade Adjustment Assistance augments health and unemployment benefits to workers who lose their jobs because of overseas competition. As part of stimulus legislation in 2009, it was expanded beyond manufacturing to include service workers such as call-center employees. Republicans say renewing the extended aid would be too costly when lawmakers are struggling to reduce the federal deficit.

$320 Million Cost

The proposal to renew aid for service workers, estimated by the Senate Finance Committee to cost $320 million annually, would continue most of the assistance through 2013 and provide retroactive benefits to those left out so far this year.

“We await the president’s submission of the three trade agreements sitting on his desk so the House can consider them in tandem” with preferences and worker aid, Boehner, an Ohio Republican, said in a statement.

The South Korea trade deal, the biggest for the U.S. since the North American Free Trade Agreement in 1994, would boost U.S. exports by as much as $10.9 billion in the first year it’s in full effect, according to the U.S. International Trade Commission. The accord with Colombia would increase exports by as much as $1.1 billion a year.

South Korea, Colombia

Companies such as Ace Ltd. (ACE), Citigroup Inc. (C) and Pfizer Inc. (PFE) have led the effort to get the South Korea deal passed, while Caterpillar Inc., General Electric Co. (GE), Whirlpool Corp. (WHR), have been among the biggest backers of the accord with Colombia.

The U.S. Chamber of Commerce in Washington welcomed the Senate vote, Myron Brilliant, senior vice president for international policy at the largest business lobbying group, said in a statement. “It clears the way for approval of the job-creating trade agreements, and not a moment too soon,” he said.

The Chamber estimates the trade agreements will prevent the loss of 380,000 jobs.

Democrats staved off a push by Senate Republican leader Mitch McConnell of Kentucky on Sept. 20 to add “fast-track” authority intended to require that Congress act on trade agreements within a limited time and without changes after the president submits them. The mandate expired after Democrats gained control of Congress under Bush in 2007.

Obama hasn’t requested renewal of the authority. A push for it may “trigger an all-out ideological struggle over U.S. trade policy,” a Council on Foreign Relations panel that included former Democratic Senate leader Tom Daschle and Andrew Card, the White House chief of staff under Bush, said in a Sept. 19 report.

The amendment to add worker aid to the trade preferences bill passed 69-28, with 16 Republicans joining the Democrats.

The bill is H.R. 2832.

To contact the reporter on this story: Eric Martin in Washington at emartin21@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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