Bush Does More Slugging, Less Ducking, On Trade

When Carla A. Hills stopped by the office of Senator Bob Graham (D-Fla.) recently, the talk quickly turned to tomatoes. And oranges. And onions. By the time America's top trade negotiator bade Graham goodbye, she had promised to protect his state's citrus growers from a surge of juice concentrate from Mexico and farmers from the threat of cheap, pesticide-laden Mexican vegetables. "We will continue to fight ferociously" for U. S. trade interests, Hills promised a smiling Graham.

That's tough talk from an Administration whose trade stance has owed a lot more to Adam Smith than Evander Holyfield. But these days, the White House is doing more slugging and less ducking on trade. On Apr. 27, Hills announced retaliation against Japan for refusing to open its public-works construction market. She spoke even as negotiators from both countries were laboring just a half-mile away in 11th-hour talks. The same day, Hills vowed sanctions on China for its piracy of U. S. books, software, and videotapes. Meanwhile, the Administration promised to hang tough on trade disputes ranging from European protection of television programming to German aircraft subsidies to Japan's refusal to buy more American semiconductors.

Yet the new pugnacity may be more a shift in tactics than philosophy. The White House is begging Congress to renew the President's powers to negotiate trade agreements. A simple majority in either house could sink the measure, slapping Bush with his worst legislative defeat yet--and dooming his high-profile effort to craft a North American free-trade pact with Mexico and Canada.

LOBBYING BLITZ. A close vote is expected in late May, so Hills has canceled all foreign travel to spend weeks visiting more than 100 members of Congress. Labor Secretary Lynn Martin and Agriculture Secretary Edward Madigan, both former House members, have joined the lobbying blitz. And the Administration is showing new willingness to give ground on some key Democratic demands.

Example: Washington has long shied away from the full retaliatory powers of the 1988 Trade Act. But Hills is now planning retaliation against China, India, and Thailand for ripping off U. S. copyrights and trademarks. "We're holding all the cards this time, and the White House is going to have to play along," crows a top Democratic House aide.

America's trading partners are miffed. Japanese Chief Cabinet Secretary Misoji Sakamoto complains that it's "hard to understand" why the U. S. moved to retaliate when a construction deal was in sight. Still, the Japanese agreed to meet again on May 20 with U. S. negotiators in a last shot at averting sanctions. Beijing also expressed consternation that Washington acted even as Chinese bureaucrats were struggling with the alien notion of individual ownership of copyrights, patents, and trademarks. A spokesman for Beijing's Foreign Economic Relations & Trade Ministry complained that putting China on the list of pirates "will produce extremely negative effects on economic and trade cooperation."

'SHOCK WAVES.' In the past, such arguments might have swayed President Bush. But the lure of a free-trade deal with Mexico has changed the equation. The Administration sees a chance to build on an export boom to Mexico that, it argues, generated 264,000 U. S. jobs from 1986 to 1990 as cross-border shipments rose from $12.4 billion to $28.4 billion. The U. S. now gets 70~ of each dollar that Mexicans spend on imports. The government of President Carlos Salinas de Gortari also sees a deal as essential. If Congress votes down the negotiating authority, Salinas will be humiliated, and, says Luis Rubio, an analyst at a Mexico City think tank, "there will be shock waves in Mexico."

But a deal faces rough going in Congress, where organized labor and environmental groups have joined to hijack the talks. Bush responded on May 1 with key concessions to Democratic leaders and "my personal commitment to close bipartisan cooperation."

Among the gestures made to House Majority Leader Richard A. Gephardt (D-Mo.): The Administration is dropping longstanding objections to unemployment relief for workers whose jobs are lost to imports. To Gephardt and other leading Democrats, the Administration also promised aggressive steps to curb Mexican pollution. And officials say they'll seek rules to assure that Mexico won't become a staging area for an invasion of cheaply assembled Japanese autos.

Bush has signaled that he's willing to go even further in meeting the demands of trade hawks if that's what it takes to get a free-trade agreement with Mexico. Far less clear is whether the Administration is prepared to maintain its tougher stance in other trade disputes.

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