business

A Needless Drama over Free Trade

The blame goes to the GOP's boneheaded strategy that nearly derailed Presidential fast track authority in the House

By Richard S. Dunham

Don't believe the chatter about the demise of globalization and the death of trade liberalization. Once again, on Dec. 6, free traders in Congress snatched victory from the jaws of defeat. The 215-214 House of Representatives vote approving Presidential "trade-promotion authority" came with the usual arm-twisting and last-minute dealmaking by the White House and Republican leaders.

This come-from-behind formula has become the usual way trade legislation passes in the "people's house." Witness the vote for the North American Free Trade Agreement in 1993. Sadly, though, this time the affirmation for free trade didn't have to be such a cliffhanger, and House Republican leaders should be ashamed of themselves and the tactics they used to win.

Still, the outcome does have good news: If trade-promotion authority (long called "fast track") clears the trade-friendly Senate next year as expected, it will allow the President to once again negotiate trade pacts without congressional meddling. Winners would include a number of American industries, from technology to financial services to farming.

GOOD FOR GROWTH.

  However, it would probably speed up the decline of other U.S. economic sectors such as steel and textiles, while increasing competition for agricultural products such as oranges, tomatoes, and onions. But on balance, the evidence shows that trade liberalization usually contributes to American economic growth.

Why, then, did House Republican leaders have to make such a nail-biter out of it? Here's what happened: Early on, the GOP leadership decided to bypass pro-trade Democrats and ram a GOP version of trade legislation through the House, while delaying passage of trade pacts negotiated by the Clinton Administration.

This tactic permanently alienated two key internationalist Democrats, Representative Robert Matsui of California, long the leader of free-trade Democrats in the House, and Representative Charles Rangel of New York, the top Democrat on the panel that writes trade legislation, the House Ways & Means Committee. Rangel, though a veteran liberal and an ally of organized labor, has frequently backed trade legislation. The GOP's bone-headed strategy was the brainchild of two Texans, House Majority Leader Dick Armey and GOP Whip Tom DeLay.

A REAL DISASTER.

  What were they thinking? Their plan was to force as many free-trade Democrats as possible to vote against business on legislation so vital to corporate lobbyists. Republicans would then argue that these mostly moderate Democrats were "antitrade" and "antibusiness" and, therefore, needed to be replaced by probusiness Republicans. It also would be a fund-raising tool in the business community. Sounds logical, huh?

In practice, the strategy was a disaster. While Ways & Means Chair Bill Thomas (R-Calif.) forced the hardline bill through his committee -- without the labor and environmental protections Rangel and Matsui sought. GOP leaders didn't have the votes to muster a majority on the more evenly divided House floor. The reason: A number of Republican lawmakers from textile, steel, and citrus districts just said no to trade-promotion authority that they believed would promote a decline in jobs among their constituents.

Other lawmakers sat on the fence while awaiting offers of legislative payoffs from the leadership and the White House. Facing a tenuous GOP majority and overwhelming Democratic opposition, passage seemed hopeless.

A PLEADING PREZ.

  Angry Democratic leaders such as Minority Leader Richard A. Gephardt, who is hostile to trade-liberalization legislation in the best of times, tried hard to bury fast track once and for all. Meanwhile, Democratic free-traders like Marion Berry of Arkansas had offers of key committee assignments dangled in front of them for voting against the legislation. A debate over policy degenerated into a game of political muscle.

If Thomas had sat down with Rangel and Matsui early in the process, President Bush would have won a comfortable victory with up to 60 Democratic votes. In the end, he attracted fewer than two dozen Democratic converts, even though the White House had to agree to labor and environmental safeguards as a price of buying votes anyway. Bush found himself pleading with lawmakers to save him from a wartime defeat. It was a truly ugly victory -- and a thoroughly unnecessary investment of Presidential political capital.

Even Thomas seemed to understand the situation as he pleaded for votes on the House floor on Dec. 6. "Attack me," he told his colleague. "I understand it. But do not derogate the contribution of those Democrats who were strong enough, and who believed enough in this, to work together in an intellectually honest way."

TAKING THE HEAT.

  Thomas is right about one thing. The vote's true heroes were the free-trade Democrats who avoided getting sidetracked by the partisan politics that was consuming their colleagues and kept their eyes on the prize: legislation that could help expand American exports. Leaders of this group include Representatives Cal Dooley of California and William Jefferson of Louisiana. They took a lot of heat from their Dem colleagues for doing what they thought best for the country. That doesn't happen often.

And Thomas deserves some credit for negotiating with the centrist Democrats when it became clear that the hardline plan had no chance of passage. It's just sad that it took so long for the House Republicans to get serious about doing something good for the economy, rather than playing political chicken. How many times do voters have to say it? People don't like partisan politics getting in the way of the nation's business.

Dunham is a White House correspondent for BusinessWeek's Washington bureau. Follow his views every Monday in Washington Watch, only on BW Online

Edited by Douglas Harbrecht

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