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Should The U.S. Bury Fast Track?

U.S. trade policy over the past 10 years has created plenty of cause for anxiety around the globe. The fight over NAFTA, the lost battle for fast track authority, and high-pro file anti-trade protests have called into question general support within the U.S. for free trade and the ability of the U.S. political class to retain its world leadership of this issue. Worse, the downturn in the U.S. economy may exacerbate anti-free trade sentiments. Worse still, no other country or region is in a position to take the lead on this global issue. Without the U.S., the cause of open trade would be fated to drift over the next few years.

The U.S. business community mean while seems to have but a single priority--getting Congress to finally grant the President the fast-track negotiating authority that expired back in 1994. Among CEOs at U.S. companies hopes are high that President Bush will have more luck than his predecessor on this matter. However, if former U.S. Trade Representative Charlene Barshefsky has her way, George W. Bush should not even try. Barshefsky argues that reinstating fast track should no longer be a priority for the U.S. business community and U.S. trade policy-makers.

While surprising, her logic is impeccable. By dropping their insistence on fast track, U.S. advocates of free trade will be better positioned to obtain real trade victories. The Barshefsky bombshell dropped in the question and answer session of her farewell presentation at the Economic Strategy Institute, a Washington think tank. Barshefsky did not go so far as to dismiss fast track, but she pointed out that the Clinton Administration managed surprisingly well without it.

Specifically, despite having lost the fights to reinstate fast track in 1997 and 1998, the Administration was able to get the bill giving China permanent normal trade relations (PNTR) through Congress. The reason: When members of Congress were presented with the specifics of a concrete agreement, even those politicians who are generally less comfortable with trade agreements voted in favor of passing PNTR. In other words, free trade in the abstract might not be very popular. But when the benefits of a specific free trade agreement become clear, it will find enough backing in Congress to pass into law.

It remains to be seen whether Bob Zoellick, the new U.S. Trade Representative, follows his predecessor's advice. But Barshefsky's concept would represent nothing short of a 180-degree change in the strategy of free trade advocates in the U.S. And yet, it's a realistic approach. Fast track may well be dead, but nobody should take that to mean that the U.S. is going to retreat into autarky. In fact, admitting the death of the fast-track mechanism may be quite liberating. Instead of the continuing exhausting fight over hard-to-explain concepts such as comparative advantage, the U.S. debate would return to the pragmatic issues that always speak loudest and where the U.S. record is strongest.

Free traders will be able to stand on firm ground then, as they have the better arguments on their side. For example, the fears of the anti-NAFTA forces were never realized. Instead, Mexico--by both economic and political standards--continues to improve, with positive results in areas from jobs to immigration in the U.S. That success will become an ever more powerful argument for free trade in the future, regardless of the outcome of the vapid debate over trade theory. Also, contentious issues such as environmental and labor protections can be much more effectively addressed when lawmakers have concrete trade deals to assess--rather than the hypothetical setting of a renewed fast track debate.

Of course, abandoning fast-track would allow the anti-trade forces to claim a victory, albeit one with virtually no practical value. It would merely demonstrate that the opponents of free trade are mostly interested in the politics of symbolism, not the accomplishment of practical change. And so Barshefsky's comments may point the way for the U.S. to take the lead in international trade liberalization once again--not because the textbooks say it is a good idea, but because the de bate will occur, as she says, in connection with an actual trade agreement whose economic benefits are concrete rather than abstract. This is a clear warning against allowing the U.S. trade debate to become too complex. The basic issues involved in the negotiations with China were complicated. But such bilateral issues may be the best way to educate the U.S. electorate--and Congress--about the benefits of free trade.

Stephan Richter is publisher of TheGlobalist.com
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Title Annotation:trade policy
Author:RICHTER, STEPHAN
Publication:Chief Executive (U.S.)
Article Type:Brief Article
Geographic Code:1USA
Date:Apr 1, 2001
Words:767
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