WASHINGTON – The House voted Thursday to accept Chile (search) and Singapore (search) as free-trading partners for the United States, moving toward what the Bush administration foresees as a new era of open markets around the globe.
Within sight is a plan to eliminate trade barriers for all the Western Hemisphere.
If approved by the Senate, Chile would become the first South American country to forge a free trade agreement with the United States and the prosperous city-state of Singapore would be the first in East Asia.
The vote on Chile was 270-156 and Singapore 272-155, strong support in the House where lawmakers representing blue collar and industrial districts have often been leery of trade pacts that unions say could cost U.S. jobs.
"These are world-class free trade agreements, and one of the things we can say is, it's about time," said Rep. Bill Thomas, R-Calif., chairman of the House Ways and Means Committee.
The two trade bills were the first products of the "fast track" authority Congress gave the president last year, under which he can negotiate trade pacts that Congress must vote on but cannot change.
Organized labor was strongly against both, saying they would only add to the millions of jobs the unions say have been lost to overseas competitors over the past decade of NAFTA and steps to open trade with China.
"It's time for us to stand up and defend the few good paying jobs we have left in this country," said Rep. Pete Stark, D-Calif., an opponent of the two measures.
The Senate, generally more receptive to free trade, is likely to vote on the two agreements before it leaves for its August vacation at the end of next week.
Chile and Singapore would become the fifth and sixth nations with agreements to eventually eliminate tariffs and other barriers to the exchange of goods and services.
Mexico and Canada joined in the 1993 North American Free Trade Agreement, and there are also bilateral agreements with Israel and Jordan.
U.S. trade with Chile is relatively small, but the agreement could give momentum to negotiations to open up markets with the nations of Central America and, eventually, the entire Western Hemisphere.
"The real gold ring here is to have a Free Trade Agreement of the Americas," said Bill Morley, the U.S. Chamber of Commerce (search)'s vice president for legislative affairs. He said closer U.S.-Chile trade relations would soften the resistance of Brazil and others to a hemisphere-wide trade pact.
Singapore is America's 12th-largest trading partner, with two-way trade nearing $40 billion last year. Trade in goods is already 99 percent duty-free, so the agreement focuses on removing barriers to services and investment. The agreement provides strong deterrence against intellectual piracy and counterfeiting, which cost the American motion picture, music and publishing industries billions of dollars in losses every year.
Under the deal with Chile, more than 85 percent of bilateral trade in consumer and industrial products would become tariff-free immediately, with most remaining tariffs eliminated within four years. American farmers would gain duty-free treatment within four years for pork and beef products, soybeans, durum wheat, potatoes and processed foods such as french fries.
Supporters cited one study estimating that the Chile deal alone would boost America's gross domestic product by $4 billion a year.
Reflecting the significance of the two agreements, both the Chamber of Commerce, which lobbied for the measures, and the Teamsters, which opposed them, made clear that the votes of lawmakers would count in their ratings of who in Congress supports them on important issues.
Teamsters (search) President James P. Hoffa said lawmakers who back the agreements could lose his union's support. "You are either with the American worker or against the American worker. These agreements leave no room in the middle."
The Chile and Singapore agreements only require that those countries enforce their own labor standards, which labor officials said was a retreat from the pact with Jordan two years ago that held Jordan to stricter international worker protection standards.
Rep. Sander Levin of Michigan, one of the Democrat's top trade experts, said the labor standards of Chile and Singapore were high, but warned: "Do not negotiate an agreement with Central American nations on the assumption that the conditions are like those in Chile or Singapore when they are not."
Opponents of the measures also voiced concerns about provisions that allow professionals from those countries to obtain temporary work visas in the United States, which can be renewed annually.