Politics & Government

Federal aid for displaced workers linked to trade agreements

WASHINGTON — The fate of three big trade deals now turns on a politically divisive program that's aided displaced workers in the likes of California's Lodi, Folsom and Fresno.

In the political equivalent of a shotgun marriage, negotiators are trying to wed long-stalled free trade deals with Panama, South Korea and Colombia to a renewed worker assistance program that's been extensively used in California.

"Right now, Congress can advance a set of trade agreements that would allow American businesses to sell more of their goods and services ... while helping those adversely affected by trade," President Barack Obama said at a news conference Wednesday.

By and large, California businesses back the three proposed trade deals. Likewise, Republicans who control the House of Representatives customarily support free trade. The big question is whether free-trade champions will also accept the worker assistance that many Democrats demand.

An early test comes Thursday, when the Senate Finance Committee will consider the South Korean trade package along with an associated worker assistance program. The next test will come when the House decides whether to keep trade and aid together.

Negotiators signed the Panama and South Korea trade deals in 2007 and the Colombia deal in 2006, but Congress has not yet approved them, and free-trade proponents are getting anxious.

"International-related commerce is a major ingredient in the economic prosperity of the state and our nation," California Chamber of Commerce vice president Denise Davis said Wednesday. "Successful passage of these job-creating agreements would be a big win for California, its companies, workers, farmers and ranchers."

California's farmers, for instance, would see three-quarters of Colombia's agricultural trade tariffs disappear under the pact. South Korea's 15 percent wine tariff would evaporate. The state's $229 million in annual exports to Panama would increase.

The proposed South Korean free trade deal is, by far, the largest of the three. California already exports $8 billion worth of goods annually to South Korea.

This week, seeking to satisfy pro-business and pro-labor lawmakers alike, White House and congressional negotiators struck a deal that would combine the free trade pacts with a renewed Trade Adjustment Assistance program. The script for what happens next is not entirely clear.

The Labor Department-run program provided aid last year to a quarter of a million U.S. workers who had lost their jobs or had been financially harmed by foreign trade. The aid includes classroom training and cash payments.

Congress expanded the assistance program to $975 million in 2010, an amount skeptics call unaffordable. The renewed assistance program almost certainly will be smaller.

"The White House and many Democrats are delaying the pro-growth trade agreements until we get more government spending," Republican Sen. Orrin Hatch of Utah complained earlier this month. "And for what? What evidence is there that giving some workers who have lost their jobs more benefits than others ... is a responsible way to spend taxpayer dollars?"

In California, workers at 227 companies were awarded assistance last year. Only Ohio had more companies certified for the federal assistance, Labor Department records show. Potentially, as many as 20,000 California workers were deemed eligible for aid.

Workers at the Lodi-based Valley Towing Products, for instance, petitioned for help after learning the company was shifting work to Mexico. Sixty-four employees lost their jobs at the facility; last January, the Labor Department granted the aid.

"A significant number or proportion of workers at the subject firm (are) threatened with total separation," Labor Department officer Del Min Amy Chen explained.

Likewise, the Folsom-based R-Squared Circuits as well as Fresno-based workers for iLevel by Weyerhaeuser successfully petitioned for aid. Most California companies whose workers benefit from the trade program, though, are located outside of the Central Valley.