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U.S. to Set Trade Guidelines on Environment, Labor

President Bush and House leaders came to an agreement on environmental and worker protection guidelines to attach to trade deals with other countries. A trade policy expert talks about the agreement's significance.

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    The compromise between the White House and Congress over free trade agreements came after months of stalled negotiations.

    Under the new deal, when the U.S. enters into trade agreements with other countries, those countries must agree to: ban child labor and forced labor; guarantee rights to organized labor; and enforce existing national and international environmental law.

    The pact also calls for expanded access to generic drugs for developing countries for public health emergencies. The new regulations would be applied to pending trade deals with Panama and Peru, which are involved in bilateral pacts with the U.S., as well as with South Korea and Colombia, where negotiations could prove more complicated.

    Joining us to explain what is in this new agreement and its significance is Sherman Katz. He's a senior associate in the trade, equity and development project at the Carnegie Endowment for International Peace.

    Sherman Katz, good to have you with us.

    SHERMAN KATZ, Carnegie Endowment for International Peace: Pleasure to be here.


    Just to help us all understand, put into layperson's terms what exactly has been agreed to here by the Democrats and the administration.


    On labor, the Democrats have been pushing hard for some time that new trade agreements, free-trade agreements, should include the right for labor to bargain collectively, to organize, and a prohibition of forced labor and child labor.

    Republicans have resisted this on the ground that this is going to interfere with trade. And so Congressman Rangel, Chairman Rangel of House Ways and Means, and Secretary Paulson, Treasury, and U.S. Trade Representative Susan Schwab yesterday agreed that there is a set of principles that they can both accept to incorporate in U.S. trade agreements on that subject.


    Now, those are the main features. There was also language in this agreement around pharmaceuticals, generic drugs.


    Correct. The problem always for policymakers on patents versus generic drugs is, how much should we reward people who've invented drugs? And how much interest do we need to give to poor people who need to have access to drugs?

    And the Democrats have insisted that trade agreements should expand the opportunity for people in poor countries to have access to generic drugs earlier.