Preserving the trade system.

THE FUTURE GROWTH OF THE U.S. ECONOMY HINGES ON SECURING FREE, UNRESTRICTED TRADE WITH OUR GLOBAL NEIGHBORS. BUT WITHOUT ACTIVE CEO SUPPORT, THAT ISN'T LIKELY.

The dark cloud in an otherwise clear, blue economic sky is the administration's inability to pass Fast Track. While President Clinton has indicated his intentions to reintroduce trade legislation this year, it is highly unlikely that will happen given the crowded legislative calendar and a shortened congressional schedule due to fall elections.

This puts America at a trade crossroad. The administration needs Fast Track authority as a weapon, which has been available to every President since 1974, to negotiate trade agreements while consulting with Congress and then get a straight up or down vote in both houses without amendments.

Business has to take a serious look in the mirror when it comes to industry's failure to tell the story of global trade's importance to our economy today and in the future. The soundness of the positive trade story has been co-opted by the Democratic left and the Republican right, both of which contend that environmental and labor concerns and religious freedom have been subordinated in America's quest to open new markets and expand existing ones.

Aggressive market expansion advocates on Capitol Hill complain that business only responds reactively and does not do the day-to-day spade work necessary to educate the American people and change the minds of unconvinced legistators. They further contend industry should explain the importance of trade to company associates and require employees to communicate with their representatives and make the trade case. This action is required to counteract unions that use contributions and letter-writing activities to get their views across.

In 1996, U.S. trade represented $2.3 trillion and accounted for nearly 30 percent of the country's GDP. Trade has also generated 1.5 million jobs in America since 1992. In order to maintain - let alone increase - America's collective standard of living over the long run, we need to plug into the global markets projected to grow faster than ours in the future. Business has an important role and needs to exert the trend of leadership that only it can. And CEOs need to be leading that charge.

At Pier 1 Imports, we import furniture, decorative home furnishings, and other household items from 44 countries around the world. Our merchandise primarily consists of product assortments not available in commercial quantities in the U.S. These are usually handmade and, in most cases, from less developed countries. Currently, the company operates more than 750 stores worldwide, with sales of more than $1 billion and net earnings of nearly $69 million in 1997. Pier 1's continued success as a growth retailer hinges on American consumers maintaining and enhancing their standard of living. This can only be achieved if we continue to aggressively penetrate global markets whose purchases will supplement the slower growth scenario of the U.S. through 2000.

International trade is already a huge share of the U.S. economy. In 1994, for example, two-way trade for goods and services plus earnings on investments grew at a record pace, reaching an all-time high of $1.8 trillion - more than 27 percent of our GDP. By 2000, this number will exceed 30 percent.

Exports are projected to be the fastest growth component in the GDP in the years ahead, growing two and a half times that of the overall economy. International growth has benefited from two positive long-term trends. First, the globalization of commerce has broadened the range of policies relevant to trade, and second, more and more developing countries are now operating under market economies, thus creating expanded sales opportunities for U.S. goods and services.

Historically speaking, the U.S. was at the center of the global economic universe from 1945 until the first oil shock in 1973, and had supplied the goods and services here and throughout the world with limited competition and very little price pressure. Over the past two decades, the U.S. has learned that renewed competitive vigor was necessary to attack the global market and that economic growth was exploding elsewhere in the world and was projected to compound at a much more rapid rate than in the U.S.

Now, American producers have restructured, repositioned, and refocused their businesses and have emerged as the most competitive force in the world. The engines of these changes primarily have been technological advancements, reduction in labor costs, and plant relocations either here or abroad. Environmental and regulatory pressures have also influenced companies to take these actions.

Furthermore, in spite of massive downsizing over the last 30 years, the U.S. has still added 53 million new jobs. This contrasts with the European Union, which, with a 30 percent larger population, added just 6 million jobs. Quite clearly, a major part of America's job growth has been geared to stronger export shipments.

Fortunately, Clinton came into office with a strong bias and a clear understanding of the need to open markets for American goods around the world. Through the efforts of U.S. Trade Representative Mickey Kantor and his predecessors, and with the support of millions of Americans, Congress passed NAFTA in January 1994, linking Canada, Mexico, and the U.S. in a regional trade agreement that lowered tariffs and opened markets. This agreement has been a great success, in spite of Mexico's devaluation of the peso in December 1994. The GAIT ratification, which followed in 1995 and solidified trade agreements with more than 150 countries, went a long way toward laying a foundation for further progress and agreements.

While the U.S. has been hesitant since the passage of GAIT, others are moving forward aggressively in the trade arena:

* The 15-nation European Union has opened free trade discussions with Mexico and the Southern Common Market.

* Mexico has signed free trade agreements with Bolivia, Chile, Colombia, Costa Rica, and Venezuela.

* The Southern Common Market - Argentina, Brazil, Paraguay, and Uruguay - has added Chile as an associate member and is courting Bolivia, Mexico, and Venezuela.

NAFTA was a good beginning, but we now need to move with all deliberate haste to add Chile to the Alliance. Canada has already moved independently and has established bi-lateral agreements with Chile that immediately remove three-quarters of all import and export tariffs, with all tariffs scheduled for elimination in five years.

The U.S. is losing profitable Chilean business to Canada as well as Germany, France, and Japan, who have moved steadily into our backyard. We must protect our legitimate hemispheric territory, build a broad regional trade alliance, and move aggressively to solidify our trade relationship in Central and South America.

China is a more complicated issue. Clinton has called for a new beginning in our bilateral relationship and, hopefully, the administration will be able to decouple trade from the social issues that have burdened China's ability to join the World Trade Organization. When I travel in Southeast Asia, Hong Kong, Malaysia, Thailand, and Indonesia, I hear people question the lack of consistency in the way our government judges other countries' behaviors and actions and the way it expects these countries to act as we do. But as countries move from underdeveloped nations to less developed and finally to mature societies, they more readily gravitate towards policies and behaviors that more closely mirror our values.

With growth rates throughout the world projected to grow two to six times faster than the U.S. rate, it is clear we need to play into this growth stream and achieve our fullest global potential. To that end, CEOs clearly have to assume a more proactive role.

The following are some specific actions you can take to move this mission along:

* Communicate with your company associates and point out the importance of free trade to their jobs, the company's progress, and its positive income growth.

* Encourage your industry trade associates to join with other associations and supports a national trade awareness campaign to counteract the negative spin from projectionists.

* Personally contact your congresspeople and senators in states where you have major corporate facilitators and explain how exports influence the economic viability of your company.

* Organize and implement a companywide letter-writing campaign to all other legislators.

Political leaders have the big task of convincing the American people that trade is good for jobs and for increasing our standard of living. If CEOs don't, at the very least, work toward educating their own employees about the benefits of free trade. they may find legislators silent as well.

Clark A. Johnson is chairman and chief executive of Fort Worth, TX-based Pier 1 Imports, a retailer of imported decorative home furnishings with annual sales of more than $1 billion.