U.S. Free Trade Agreements Are Stalled Over Worker Benefits

Deals with Colombia, Panama, and South Korea are tied to Trade Adjustment Assistance

In the past few months, President Obama has talked about setting up free-trade agreements with Colombia, Panama, and South Korea. It seems like the White House would like to see these deals happen--it's believed they'd be good for America's economic and foreign-policy health--and there are a lot of congressional Republicans who agree. But this week, the White House made it clear that the free-trade deals aren't going to happen unless the GOP gives some ground on worker benefits.

The issue here is the Trade Adjustment Assistance program, a Department of Labor resource that helps American workers who've lost their jobs due to foreign competition. The TAA provides retraining and financial assistance for workers who need to search for a new job or move to a new city. The program, which has existed for decades, underwent an expansion in 2009 as part of the stimulus package.

That expansion has expired, but the White House, and congressional Democrats, would like to see it get an extension. On Monday, Obama's aides indicated they'd be fine with holding up the free-trade deals until Republicans agree to keep the TAA operating at its 2009-2010 level of spending.

This isn't the first time the Colombia, Panama, and South Korea trade agreements have been used as bargaining points in a Capitol Hill standoff. In March, Republicans threatened to block Obama's nominee for commerce secretary until they got trade treaties for all three countries.

Now, the White House seems confident it can strike a deal with congressional Republicans to expand TAA benefits and move the trade deals along. Gene Sperling of the National Economic Council said that "[we] believe we can work on congressional leadership to get that accomplished." But Orrin Hatch, the top Republican on the Senate Finance Committee, is using more combative language, calling the White House's ultimatum "hugely disappointing." As quoted in The New York Times, Hatch has said that "it makes no sense to shut the door on increasing U.S. exports by over $10 billion in order to fund a costly program."