The Washington Times
The worst news for organized labor this Labor Day week is that the postwar agenda of trade liberalization now seems to be getting back on track. Congress solidly approved new bilateral agreements this summer with Singapore and Chile. Later this month, the World Trade Organization [WTO] convenes a meeting of trade ministers in Mexico, at which point it should become clearer whether momentum is gathering for a broad multilateral reduction in tariffs worldwide. Meanwhile, the Bush administration has to consider whether or not to undo its worst economic decision to date – the 2002 imposition of steep tariffs on imported steel, which the WTO ruled out of bounds this summer.
The 1990s saw two major steps forward on trade liberalization: the passage of the North American Free Trade Agreement and the creation of the WTO. But then, partly as a result of a more general breakdown between the Clinton administration and the newly GOP-controlled Congress, and partly because Mr. Clinton, himself a proponent of free trade, was caught in a bind because of his party’s majority opposition, progress stalled in the late 1990s.
Congress refused to grant Mr. Clinton “fast-track” negotiating authority, according to which Congress votes up or down without amendment on a proposed agreement. And Mr. Clinton became enamored of the idea gaining currency among Democrats that trade liberalization agreements ought to include labor and environmental standards. Without laying the groundwork internationally, at a WTO meeting in Seattle in 1999 marked by sometimes-violent anti-globalization demonstrations, he told a newspaper that labor standards ought to be agreed on and included in future trade agreements. The ensuing furor led to the collapse of the talks, for which he was roundly blamed.
The Bush administration got off to a promising start on trade by naming the capable Robert Zoellick as U.S. trade representative. Then, in March 2002, came the awful steel tariff decision, widely interpreted as an attempt to curry political favor in swing states in the Northeast. Some claimed that the decision was part of a pattern preceding major new rounds of trade negotiation and liberalization, a signal meant to reassure domestic constituencies that their needs would not be forgotten. If so, the move was too clever by half. The way to make the case for free trade is to make the case for free trade, not to embrace protectionist diversions.
Fortunately, the steel decision didn’t lead to others like it. And the administration did press forward to win renewal of fast-track authority, which ultimately made possible the Chile and Singapore agreements. Each represents significant gains. Tiny Singapore is a huge trading partner, at $40 billion a year, ranking twelfth overall. Chile is much smaller, a little over $6 billion. But the agreement, which has been under discussion for more than a decade, is a huge step toward an expanded North and South American free-trade area.
Congress, meanwhile, approved both agreements by substantial margins – better than 2-1 in the Senate, not quite so high a ratio in the House. As is typical on trade measures, the votes were bipartisan but not balanced. Senate Democrats split evenly, whereas Republicans supported it overwhelmingly.
More quietly on the trade front, Mr. Zoellick and his European Union counterpart, Pascal Lamy, worked effectively to ensure that the recent diplomatic unpleasantness between the United States and Europe over Iraq didn’t lead to fits of protectionist pique. In fact, would-be boycotters got an education in just how intricately linked the U.S. and European economies are.
Some pro-trade Democrats have worried that the pursuit of bilateral trade agreements comes at the expense of a push toward a breakthrough in the current round of WTO negotiations – another instance of the administration’s supposed opposition to multilateral approaches. If the administration really were showing signs of abandoning the WTO, that would indeed be cause for alarm. But the pursuit of the bilaterals in itself does not harm the WTO round, and the results, treaty by treaty, are beneficial. In fact, one could make a case that Mr. Zoellick, first with the fast-track vote and then with the votes on Chile and Singapore, has quietly reestablished that congressional support for trade liberalization remains strong.
Growing weaker by the day, however, is Clinton-style support for trade liberalization among Democrats aspiring to the presidential nomination. It’s a mark of the extent to which the party’s core constituencies dominate the process this year that even pro-trade aspirants seem reluctant to make their case. John Kerry seems to be spending a fair bit of time these days trying to explain away his previous support for trade agreements. He and Sen. Joseph Lieberman skipped the votes on Singapore and Chile [though Mr. Lieberman has said he would have voted yes]. Dick Gephardt, John Edwards and Howard Dean are reliably against any agreement labor unions oppose.
It looks like the pro-trade position can become the unambiguous property of George W. Bush in 2004 – if he wants it. The test is the decision on whether the steel tariffs stay or go.