Bush risks losing trade powers after talks collapse

US President George W. Bush risks losing his special trade negotiating powers after talks between four key players in the World Trade Organisation collapsed this week, analysts said.
Progress in the talks, which collapsed Thursday in Potsdam, Germany, would have helped Bush secure from the Democratic-led Congress the renewal of his so-called "fast-track" authority, which expires on June 30, analysts said. The talks between the so-called "G4" in the World Trade Organisation - the European Union, the United States, Brazil and India - broke down over farm subsidies and open markets.
"We really wanted a breakthrough (at Potsdam) to help gain some traction in terms of convincing Congress to deliver trade promotion authority," said US Trade Representative Susan Schwab on Friday. The Trade Promotion Authority (TPA) lets the White House submit trade agreements they negotiated for a simple yes-no vote in Congress. Legislators cannot attach amendments to the agreements.
"I think there is virtually no hope, at this point, of a renewal of the TPA," said Edward Alden, a trade expert with the Council on Foreign Relations, a Washington-based think tank.
"It was pretty clear that unless there was some kind of breakthrough the Congress was not going to renew TPA," he said. Democrats, who took control of Congress in January, are unlikely to easily extend the TPA to the Republican president - especially not with the 2008 presidential election looming, and a gaggle of legislators running for their party's nomination.
"There is just a real reluctance to push forward the trade agenda that has been led by the Bush administration when it seems to be such a sensitive issue among US voters," said Sarah Anderson of the Institute for Policy Studies, a think tank.
The war in Iraq also overshadows the debate. "The Iraq war has sucked out all of the energy, all the will from this administration," said Daniel Ikenson, with the libertarian Cato Institute. For the White House "trade cannot be a priority" in its negotiations with Congress, he said.
Technically the TPA can be re-authorised at any time, but this will "definitely not happen before its expiration next week," Ikeson opined. The bilateral free-trade agreements Washington reached with Colombia, Peru, Panama and South Korea could have benefited from a fast-track yes-no vote, but they now may be rejected by Congress, the experts said.
Democrats in Congress "are definitely going to be against the Colombia one," Anderson said. But for the other trade agreements "they were reserving judgement before they saw that final language," she said. "I see it as a huge mess and I think it's going to drag out at least until the end of July. That is typically when trade deals are brought up here, before the recess," she added.
Ikenson was equally downbeat. "I don't even know if any of those are going to happen. Most of my trade colleagues in the trade policy community think that at least Peru will get passed, but I doubt it," he said.
Schwab on Friday said she expected that the free trade agreement with South Korea will be signed before the end of the week. If approved by Congress, it would become the most important such accord since the 1994 North American Free Trade Agreement (NAFTA) between Mexico, Canada and the United States.