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White House insists on aid deal before trade pacts

By Jeff Mason

WASHINGTON (Reuters) - The White House will not submit legislation to Congress to implement three pending free trade pacts without a deal to extend aid to U.S. workers affected by overseas competition, officials said on Monday.

The Obama administration would like to see long-sought free trade agreements with South Korea, Colombia and Panama approved this year, but officials said those would not move forward without an expanded Trade Adjustment Assistance Program to retrain and support displaced workers in the United States.

"The administration will not submit implementing legislation on the three pending FTAs until we have an agreement with Congress on the renewal of a robust, expanded TAA program," White House senior economic adviser Gene Sperling told reporters in a conference call.

"We are hopeful and optimistic that we can work out such a bipartisan agreement, but again we feel it's important that that agreement be locked in before we submit the implementing legislation."

President Barack Obama has made expanding trade and exports an important part of his efforts to boost the U.S. economy. Keeping economic recovery and job growth moving is critical to Obama's hopes of holding on to the White House in 2012.

Union voters will also be critical to his re-election effort, however, and the administration is eager to show it is as concerned about Americans displaced by foreign competitors as it is about expanding exports to new markets.

The hard line did not sit well with Republicans.

"It makes no sense to shut the door on increasing U.S. exports by over $10 billion in order to fund a costly program," said Senator Orrin Hatch, the top Republican on the Senate Finance Committee.

"It is my hope that the president will reconsider this decision and will not allow anything to get in the way of congressional consideration of these trade agreements and the jobs they'll create," Senate Republican Leader Mitch McConnell said in a statement.


U.S. Trade Representative Ron Kirk told the House of Representatives Agriculture Committee earlier this month the deals could be passed "by August if not sooner" if the worker assistance program were renewed.

"This does not have to take a long period of time," Kirk said on the conference call.

Brendan Buck, a spokesman for Republican House Speaker John Boehner, said the body could pass the trade agreements by early July, but he did not address the administration's demands on aid.

"If the president acts quickly, the House would be prepared to pass all three before July 4th," Buck said.

Sperling said he did not expect the administration would have to walk away from the trade agreements over the issue.

"We just don't expect it to come to that," he said.

"Most policymakers, Democrat or Republican, understand that ... someone who loses a job because their firm has shifted production to a place like China or India or other countries needs the retraining and re-employment assistance just like other workers impacted by trade do."

(Additional reporting by Patricia Zengerle and Doug Palmer; Editing by Eric Beech)