The Latest Trade War: Democrat Vs. Democrat

Lately, it seems as if all the intraparty bloodletting has been among Republicans. But Democrats are about to get back to their usual bickering as they brace for a contentious battle over trade--with strong overtones for Campaign 2000. On one side: Vice-President Al Gore, point man for the Administration's push to expand the North American Free Trade Agreement. On the other: House Minority Leader Richard A. Gephardt (D-Mo.), implacable NAFTA foe.

At issue is congressional renewal of the Administration's expired authority to negotiate "fast-track" trade accords that prevent lawmakers' tinkering. The brawl will set the stage for a showdown between the two longtime rivals for the Presidency. "It may not be the first primary of 2000, but it's the first contest," says one Democratic operative.

It's also a fight that exposes the fault lines of the Democratic Party. Gephardt is the champion of liberals who believe market-opening pacts are exporting U.S. jobs to low-wage nations. Gore hopes to be heir to Bill Clinton's New Democrat canon that expanded trade spurs growth and high-wage jobs. "This is a defining issue for the party," says Representative Robert T. Matsui (D-Calif.).

Since fast-track authority lapsed in 1994, the Administration has only been able to complete negotiations that started before then. As a practical matter, it cannot launch talks on new deals such as Chile's inclusion in NAFTA because Congress might cripple them with amendments. Congress can only approve or reject fast-track deals.

RESOLVE QUESTIONED. The loss of fast-track authority has raised doubts about the U.S. commitment to expanding free trade throughout the Americas. Alarm bells are also going off in Mexico City, which President Clinton will visit in April, about Gephardt's use of the fast-track debate to try to stiffen NAFTA's worker and environmental protections. "Our credibility is strained to the breaking point," warns David J. Rothkopf, managing director of Kissinger Associates. Tired of waiting, nations in the region such as Brazil and Argentina have already formed smaller trade blocs.

Trade is a divisive issue for the GOP, too, because of its growing wing of economic nationalists. But for now, many Republicans, including House Speaker Newt Gingrich, hint that they're prepared to meet Clinton halfway: The GOP would extend a fast-track mandate that is silent on labor and environmental issues if Clinton limits side deals on those subjects.

The Clintonites are inclined to bite, but Gephardt and the AFL-CIO insist that NAFTA-expansion accords include commitments on those issues. "This is not negotiable. Trade, labor, and the environment are inextricably intertwined," says Gephardt. If he rallies enough of the 205 House Democrats to his side, GOP ardor for fast-track authority may cool. They want political cover. "This won't pass if only 50 to 60 Democrats come to the altar," warns one GOP Hill staffer. It may be tough to muster many more. Two issues--payoffs by drug lords to a Mexican general and the $39 billion U.S. trade deficit with NAFTA partners Canada and Mexico--are sure to rile House protectionists. And fast-track renewal faces tougher going in the Senate, which chafes at curbs on its powers.

The Clintonites will have to start dealing soon. Action can't be pushed into 1998 because lawmakers won't touch such a controversial issue in a midterm election year. "If we don't do this by August, it isn't going to get done," says Representative Jim Kolbe (R-Ariz.), a leading free-trader. That means Gore and Gephardt will be squaring off in coming months as Democrats struggle over the future of trade--and the leadership of their party.

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