The Washington Times
It’s impossible to read the transcript of U.S. Trade Representative Robert Zoellick’s March 5 press briefing on the 30 percent tariff the Bush administration decided to slap on imported steel without coming away with the impression of a man who would rather be somewhere else.
This administration has done much to reinvigorate the free-trade agenda, Mr. Zoellick insisted, and so therefore, ahem, we’ll be protecting our domestic steel manufacturers. We believe in the efficacy of the World Trade Organization, and that’s why we’re taking advantage of a foolish loophole free-trade advocates have long been opposed to in order to protect them. Pressed by reporters on recent statements he had made about the cost of protectionism being borne by consumers, falling heaviest on those who earn the least, Mr. Zoellick said it’s hard to predict costs, and anyway steel prices are at a 20-year low. Asked about the possibility of retaliation by our trading partners, Mr. Zoellick pointed out that they’ve long been heavily into the steel subsidy business themselves. Asked whether the decision affects his credibility as a promoter of free trade, Mr. Zoellick noted that the four countries with free-trade agreements with the United States – Canada, Mexico, Israel and Jordan – would not be subjected to the tariffs, an inducement for others to enter into such agreements. And anyway, the steel tariff is temporary – three years, no longer.
Ouch, that must have been painful. In truth, the administration has no more committed an advocate of trade liberalization than Mr. Zoellick. It’s now abundantly clear that his advocacy is indispensable. The trade agenda is stalled, and it’s going to take the concerted application of pressure by those who are truly committed in order to get it moving again.
The drift is not new. Two of President Clinton’s finest hours were the passage of the North American Free Trade Agreement in 1993 and the creation of the World Trade Organization in 1995, the culmination of the Uruguay round of trade talks begun in 1986. But trade liberalization is the quintessential issue on which progress is possible only with the expenditure of political capital. The benefits of liberalizing trade are huge but dispersed. The argument is one between economists, acting out of principle, and powerful vested interests, both economic and political, arguing for protection. The battle is winnable for a president committed to free trade, as 50 years of postwar liberalization demonstrate. But winning requires a high level of presidential engagement, as well as capable behind-the-scenes players.
By the time of the 1999 Seattle meeting of the WTO, Mr. Clinton had run out of gas. He was feeling heavy pressure from within his own party to come out in favor of incorporating environmental and labor standards into future agreements, a tremendous obstacle to the success of a new trade round. Meanwhile, congressional Republicans (who provided most of the support for NAFTA and WTO) seemed perfectly content to let the trade agenda languish, denying Mr. Clinton fast-track negotiating authority (according to which a trade agreement is subject to an up-or-down vote by Congress but not amendment). Seattle was a disaster. Still, Mr. Clinton avoided many (though not all) opportunities to turn protectionist for political reasons, including on steel, an industry whose troubles are hardly novel.
When Mr. Bush took office, hopes for a reinvigoration of trade liberalization were running high. And indeed, in November, in Doha, Qatar, a new round of trade negotiations finally got under way. Meanwhile, Mr. Bush and other leaders committed themselves to a hemisphere-wide free trade agreement by 2005. And the House passed fast-track authority for Mr. Bush.
But the Senate has not yet acted, even though the Finance Committee approved the measure 18-3. Some have speculated that fast-track may be a casualty of the partisan battles between Mr. Bush and Senate Majority Leader Tom Daschle. And now we have steel quotas, the worst decision in contravention of long-stated principle that Mr. Bush has made in office. The drift continues, it seems.
Oh, well. The deed is done. As the old adage about politics says, you begin where you are. The question is this: Has Mr. Bush just cut the legs out from under trade liberalization? Can we expect additional protectionist measures in response to domestic political pressures? Should we, in short, write Mr. Bush off on trade? Or, having made this bad call, is he willing now to try to dispel that worry by moving forward on trade liberalization in other areas, using some of his immense political capital to work to increase global prosperity?
One test of that will be pushing for fast-track in the Senate. Another will be whether Mr. Zoellick is still trade representative a year from now, or whether he has moved on so as to avoid further humiliations of the kind he endured on behalf of Mr. Bush last week.