By Paul Magnusson
Is the price for the President's vision of free trade too high? When he took office, George W. Bush unwrapped the most ambitious trade agenda ever: bilateral deals with Chile and Singapore, a parley with the 35 democracies of the Western Hemisphere, and a global free-trade pact with the 144 nations of the World Trade Organization. But first, he set out to persuade Congress to grant him "fast-track authority," the right to an up-or-down vote on each deal, without amendments.
Rather than buy votes in Congress with pork, however, the Administration turned to protectionism to realize both its political and policy aims. Bush curried favor with steel-state lawmakers--and voters--by imposing tariffs on imported steel. He secured support among Western senators by slapping tariffs on Canadian lumber. And he caved in to farm-state legislators on massive subsidies for agriculture.
Congress, never shy when it comes to helping hometown industries, joined the rush to the trade barricades. "What's happening on Capitol Hill is not pretty," says Barbara Hackman Franklin, Commerce Secretary to former President George H.W. Bush and now a business consultant.
Congress isn't just looking for the bridges and highways it once bargained for when President Clinton sought passage of NAFTA in 1994. The tab for fast track includes restrictions on Vietnamese catfish, Caribbean and African clothing, and shoes from Bolivia and Peru--precisely the countries that might benefit most from open markets.
The Democratic Senate has been adding its own goodies to the fast-track bill. They include ironclad instructions to Administration negotiators to preserve-- during any future trade talks--the 80-year-old U.S. anti-dumping laws. Revising America's tough and often-used fair-trade laws is a top priority for most WTO nations--and the best way to get them to the negotiating table, say Administration insiders. But even though the Bushies call this provision a dealbreaker, they have backed off on veto threats.
"Eventually, you do have to worry that the juice isn't worth the squeeze," concedes one senior trade official worried about the add-ons. The Administration hopes to strip out the most onerous parts of the Senate bill during a conference with the House, which passed a business-backed measure last December. "If the bill gets too loaded up, we'll just kill it," warns Chamber of Commerce President Thomas J. Donohue. That would be just fine with labor, which opposes fast track.
U.S. Trade Representative Robert B. Zoellick and Treasury Secretary Paul H. O'Neill have been reassuring business execs that the Administration hasn't lost its focus. And so far, corporations are still behind the bill. Still, John J. Castellani, president of the Business Roundtable, worries that protecting industries "may be sending the wrong signal to the economy" about the prospects for trade expansion. Meanwhile, other business groups fret that horse-trading on the two disparate bills will push any final vote past the October recess during a shortened election-year schedule.
Bush trade policy hasn't been all protectionist, of course. The Prez deserves high marks for living up to the NAFTA agreement to allow Mexican trucks on U.S. highways, for example. And the White House still hopes that the messy process on Capitol Hill will yield trade deals worthy of a GOP Administration. But as a former baseball exec, Bush knows the dangers of swinging for the fence: A strike-out is much more likely than a home run.
Magnusson covers international trade from Washington.