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US-Panama free trade agreement's future in doubt

by Eric Jackson, mainly from other media

Martín Torrijos has Jimmy Carter and the Democratic lobbying firm of Parven, Pomper & Schuyler on the case, but it still appears doubtful whether the US-Panama free trade pact, now dubbed the "Trade Promotion Treaty" by the White House in recognition of how unpopular free trade agreements are with the Democrats who now control both houses of Congress, will pass muster before the House of Representatives.

Approval by the Panamanian National Assembly, essentially a rubber stamp for President Torrijos on such matters and generally unresponsive to constituent pressures, is assured by the PRD's absolute majority as well as the ideological support for anything bearing a "free trade" label of many opposition deputies. The proposal would also have a better chance in the US Senate, whose members on both sides of the aisle are generally wealthier than the representatives on the other end of the Capitol and who are more receptive to the arguments of major corporations that back free trade agreements. But even while the Republicans held the majority in the House, the free trade pact with the Central American countries and the Dominican Republic won by just two votes and the GOP got slaughtered in the lower chamber this past November.

Still, on March 30 the White House officially notified Congress of its intention to sign an agreement with Panama pursuant to the "Fast Track" legislation that's set to expire at the end of June. That set a 90-day clock ticking, during which the details of the deal must be presented to Congress and the House or Senate must vote it up or down, without changes.

Democrats had warned that they'd reject the treaty with Panama, as well as similar ones with Peru and Colombia, unless it required all countries to adhere to labor standards set by the International Labor Organization (ILO), a United Nations agency. However, Republicans were balking at that because in several instances US labor laws fall short of that measuring stick, and because from the US corporate perspective the main advantage of free trade agreements is to allow American companies to flee from labor unions, with some companies preferring places like Colombia or Guatemala, where they can hire death squads to take care of labor organizers.

But the Democrats want more than just labor protections. Three days before the Bush administration's announcement, they send the White House a list of demands that in addition to the higher labor standards, included environmental and port security issues, and guarantees that the deal with Panama would not raise the price of medicines or prohibit generic drugs, as the Bush administration has insisted to Guatemala that the CAFTA deal does.

If the Republican administration accepts any of the major changes demanded by the Democrats, wedges will have been driven into the coalition of GOP corporate backers. But if it doesn't, the Democrats have their reasons in place to reject the pact. Add the increasingly toxic atmosphere in Washington, with congressional Democrats investigating the Bush administration through several House and Senate committees over diverse real or perceived abuses and the generalized bitterness over what is ever more clearly a US defeat in Iraq, and the chances for a compromise solution are ever shrinking. And due to some "hard wired" procedural rules, once a deal is submitted under the Fast Track law, no compromise within the proposal itself would be in order. (However, the "vote for us on this one and we'll drop our objections to some unrelated thing that you really want" sort of compromise would still be possible.)

Because the Fast Track legislation expires at the end of June and is unlikely to be renewed during remainder of the Bush administration, and due to internal House and Senate rules about how legislation goes through committee and then to a possible plenary vote, the possiblity of the US-Panama free trade being "beaten by the clock" is now very real.

Meanwhile, the National Assembly, the Torrijos administration and the Panamanian legal system are acting in ways that the Democrats in Congress may, if they choose, point out as obnoxious and use as reasons to reject the proposed trade agreement. The new gag laws on the press, public declarations by President Torrijos, Attorney General Gómez and legislative leader and certain criminal defamation prosecutions, may, for example, be taken as proof that the dissemination of information vital to potential American investors has been criminalized here. The new Penal Code section that will allow Manuel Antonio Noriega to serve his murder sentences here under house arrest might also be cited by congressional opponents of the Bush trade policy. So, too, might the continuing and flagrant corruption in this country's courts be used as an example of why there can be no true "level playing field" for American businesses in Panama.

The retainer of a Democratic lobbying firm for less than what the Panamanian government is paying its Republican lobbyists might not be so impressive to the Democratic caucus in the House of Representative either.

So what's in the 90-day forecast? Mostly behind the scenes maneuvering in and around the halls and cloak rooms of the US Capitol, and probably some noisy but small demonstrations here, which would become larger but less effective if the United States ratifies the pact. The main behind the scenes players will be lobbyists for the US labor movement and American business organizations. In the end the public appearance is likely to be that of a political arm wrestle between Speaker of the House Nancy Pelosi and President George W. Bush.

HSBC defamation suit raises wider legal questions, business risks
White House notifies Congress of intent to sign US-Panama Free Trade Agreement
ACP backs down ever so slightly on Panama Canal tolls

Universidad Tecnologico bombshell in bus fire case

SUNTRACS flexes its muscles over construction site safety

Environmental permit denied for cement plant project
Business & Economy Briefs