By Richard S. Dunham When it comes to fixing the slumping economy, talk is cheap. Action is everything.
First the talk: President Bush is planning an economic get-together of sorts, a pseudo summit, on Aug. 13 in Waco, Tex. It evokes memories of the December, 1991, gathering hosted by President-elect Bill Clinton in Little Rock. The Bush meeting will not have the wide range of corporate and labor leaders -- or the broad bipartisan cast -- of Clinton's wonk-a-thon. It's more likely to serve as a campaign-style event highlighting the President's concern about the plight of ailing American workers and investors -- and a cheerleading session for the remaining unfinished items on the President's economic platter (making the 2001 tax cuts permanent, completing work on an energy bill, passing a domestic terrorism insurance bailout, and holding the line on domestic spending).
LEFT BEHIND. Americans should be reassured that the not-yet-vacationing President cares about their plight. Talk may be cheap, but it's better than ignoring the problem entirely. Still, what's needed most of all is quick action by this Administration. Case in point: trade.
On Aug. 6, Bush signed into law legislation that renews Presidential "Trade Promotion Authority." Long known as "fast track," this power allows the President to negotiate trade deals without congressional micromanagement. Congress cannot modify the President's trade agreements, it can only ratify or reject them.
Without fast-track authority for the past eight years, the U.S. fell behind in the global trading network, as South America, Europe, and Asia moved ahead with bilateral and multilateral trade deals that lowered barriers to each other's products. According to Americans for Tax Reform's Grover G. Norquist, the U.S. is party to only three of the 131 international trade agreements currently in effect. The result: U.S. exports have suffered, and U.S. jobs continue to be exported abroad to nations that have taken advantage of the system.
TESTING TIMES. What to do? President Bush and his trade representative, Robert Zoellick, need to act quickly to get the U.S. back in the game. Zoellick's goal should be to conclude bilateral deals with Chile, Singapore, and Morocco by year's end of 2002. These pacts serve as "test-marketing" opportunities to determine whether a new round of trade deals will be the panacea that many economists, business execs, and farmers expect -- or the job-killer that organized labor and many liberal groups insist.
Deals with one nation each in South America, Asia, and Africa should be a precursor to further trade liberalization that Bush ought to pursue in 2003. That would include a potentially lucrative bilateral deal with Australia and an initiative to reach five nations in the Southern Africa Customs Union. Each of these pacts has its risks, but Bush is convinced that the reward for global free trade is great. "Lowering global trade barriers on all products and services by even one-third could boost the U.S. economy by $177 billion a year and raise living standards for the average family by $2,500 annually," the President said as he signed fast track back into law.
That's real money, although Naderites and the AFL-CIO would contest its rose-tinted economic assumptions. But it can only happen if Bush shifts from the selective protectionism that has governed his trade policy for the past year. His efforts to protect the domestic steel industry clearly were motivated, at least in part, by political considerations. But other nations, particularly members of the European Union, will be loath to play ball with Uncle Sam if the President talks a free-trade line while selectively acting like a protectionist.
CONTINUED DRAIN. Bush's ultimate goal is a hemispheric free-trade zone stretching from Canada to Chile. That's realistic, and the President should press Zoellick to proceed with those efforts, despite the current meltdowns in Argentina and other South American nations. Because of widespread economic woes -- and the political nationalism they have engendered -- it may take several years to complete the hemispheric vision shared by Bush and Clinton. Likewise, it will take time to complete the Doha round of World Trade Organization talks.
Supporters may occasionally exaggerate the benefits of free trade, but even the leaders of the protectionist bloc will have to admit that old-line manufacturing jobs continued to leave the U.S. in the eight years since 1994, when fast track was in the deep freeze. Good or bad, globalization marched on without waiting for Congress to act. American workers and businesses lost opportunities for new markets and new jobs.
"With each passing day, America has lost trading opportunities, and the jobs and earnings that go with them," Bush said on Aug. 6. "Starting now, America is back at the bargaining table in full force."
Strong talk indeed. Now let's see some action. Dunham is a White House correspondent for BusinessWeek's Washington bureau. Follow his views every Monday in Washington Watch, only on BusinessWeek Online