U.S. pact raises Europe's hope for trade talks

BRUSSELS: The first major bipartisan economic agreement to emerge in Washington since Democrats took control of Congress in January could help reinvigorate faltering global trade talks, even though major trans-Atlantic differences remain, European Union trade officials said Friday.

"We welcome this deal because it shows that there is an emerging bipartisan consensus in the United States in favor of free and open trade," said Stephen Adams, spokesman for Peter Mandelson, the EU's chief trade negotiator.

The Bush administration late Thursday reached a major accord with congressional Democrats to attach environmental and worker protections in several pending trade accords, clearing the way for early passage of some pacts and improving prospects for others. Clinched after weeks of negotiations, the deal would guarantee workers in trading partner countries the right to organize unions, ban child labor and require trading partners to enforce environmental laws already on their books and comply with several international environmental agreements.

While the agreement is a victory for Democrats, it also represents a shrewd compromise by the White House. The agreement has immediate ramifications on U.S. trade deals with four countries - South Korea, Colombia, Panama and Peru - that are close to being completed. But officials in Washington predicted that the agreement's impact would go beyond those countries and could be a template for future trade deals, including a possible worldwide trade accord.

EU officials, however, cautioned that the pact would have little substantive effect on the global trade talks under way for the past six years, since progress in those negotiations depends on whether Europe and the United States can agree on cuts in farm subsidies and tariffs. The global talks, they noted, do not include agreements on the environment or workers rights.

The potential for reviving the talks will be tested this coming week when a delegation of senior U.S. trade officials, including Mike Johanns, the Agriculture Secretary, and Susan Schwab, the U.S. trade representative, meet in Paris with counterparts from the EU, Brazil, India, Australia and Japan. No breakthrough is expected, but both EU and American officials said they hoped that at least some progress could be made.

Schwab said that the agreement Thursday would send a message that the United States was willing to give new impetus to a global trade deal. EU trade officials remained skeptical, given the protectionist instincts of some Democrats, who came to power in January by courting the powerful U.S. farm lobby and railing against trade liberalization.

Nancy Pelosi, the House Speaker, acknowledged Thursday that the agreement would not necessarily pave "the way for trade agreements where we have other obstacles."

Still, European officials said that the deal could improve the "atmospherics" of global trade talks by helping to bridge the gap in Congress between pro-free trade Republicans and more protectionist Democrats.

In the end, "Congress will move when they have a clear sense of the outlines of a Doha deal," Adams said, referring to the city where the global talks began.

EU officials are nevertheless hopeful that the agreement reached Thursday would at least help persuade congressional Democrats to extend the Bush administration's mandate to "fast-track" approval of trade deals when it expires in June. The negotiating authority allows the president to submit a trade deal to Congress for a simple yes-or-no vote, with no amendments allowed.

Officials in Brussels also say they are encouraged by recent signs that some prominent Democrats, like Senator Tom Harkin of Iowa, who is chairman of the Senate Agriculture Committee, are more willing to compromise on subsidies for farmers. In recent months, Harkin has been pressing for spending on things like conservation and renewable energy, which are more WTO-friendly.

Another factor that could potentially give a lift to global trade talks is the recent election of Nicolas Sarkozy, an economic liberal, as the president of France.

His predecessor, Jacques Chirac, usually catered to French farming interests and questioned the negotiating mandate of Mandelson as the EU's chief trade negotiator. EU trade officials welcomed the election of an instinctive economic modernizer, but cautioned that Sarkozy was likely to follow Chirac's obstructionist lead on trade talks.

Steven R. Weisman reported from Washington.

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