U.S.-TRADE: Clinton’s Fight for Fast-Track Will Be Uphill

By Jim Lobe Reprint | | Print |

Jim Lobe

WASHINGTON, Apr 11 1997 (IPS) - U.S. President Bill Clinton faces a tough, uphill struggle to gain “fast-track” authority from Congress to negotiate new trade agreements this year.

And much of this struggle will have to be waged against key leaders of Clinton’s own Democratic Party.

“It will be become a key test of Clinton’s second term,” says Rep. Lee Hamilton, top Democrat in the House of Representatives’ International Relations Committee. “If the president comes out swinging, and swinging very hard…he will get it, but it will be very tough.

At stake initially is the expansion of the three-year-old North American Free Trade Agreement (NAFTA) to include Chile. But Clinton is being urged by trade boosters to seek the broadest possible authority to conclude agreements with other Latin American countries, including those of the fast-growing Mercosur common market, the Caribbean and elsewhere.

The battle lines are already being drawn. Most Democrats in the House, led by Minority Leader Dick Gephardt, say they will go along with Clinton only if he toughens NAFTA and includes stricter and legally enforceable environmental and worker rights provisions in any new trade treaties.

True to their more free-market approach, on the other hand, most Republicans are insisting that labour and environmental standards be kept out of the negotiations. “You cannot allow those who insist on incorporating those issues into trade authority to halt our progress toward reaching good trade agreements,” Republican House Speaker Newt Gingrich warned Clinton in a letter released Thursday.

Clinton, who devoted half of a major foreign-policy speech to U.S. newspaper editors here Friday to the importance of reaching new trade agreements, declined to tip his hand either way.

Insisting that he will seek agreements that will be “good for our working people (and) the environment,” Clinton said only that he had instructed U.S. Trade Representative Charlene Barshefsky “to work with members of Congress of both parties, with labour and business and environmental groups to try to reach consensus on these issues.”

“We haven’t heard anything new up here,” a staffer in Gephardt’s office told IPS after Clinton’s address.

“Fast-track authority” permits presidents to negotiate trade accords with other countries without having to worry about lawmakers introducing amendments to the agreements when they are submitted for approval. Under expedited processes, such accords must be voted up or down by each house of Congress.

In Friday’s speech, Clinton noted that every president since 1974 has been given fast-track authority and, citing recent gains by European nations in gaining markets in Latin America, exhorted both parties to support his bid. “It is unacceptable for us to sit on the sidelines while other nations forge bonds of trade,” he declared.

But, in making his case, Clinton faces very serious obstacles, not the least of which is growing popular disillusionment with NAFTA.

“There are a number of members of Congress who voted for NAFTA and haven’t seen what they were promised by the administration,” John Sweeney, the head of the AFL-CIO, the country’s largest labour federation, told a group of reporters here last week.

NAFTA critics cite skyrocketing trade deficits suffered by the United States vis-a-vis its two NAFTA partners. Last year, Mexico’s bilateral trade surplus reached almost 18 billion dollars, while Canada’s exceeded 12 billion dollars. Using Commerce Department estimates that one billion dollars in exports means 20,000 jobs, the NAFTA foes figure 600,000 U.S. jobs were lost in 1996.

Many of those jobs, according to Robert Scott, an analyst at the pro-labour Economic Policy Institute, were higher-paying positions in the automobile and other manufacturing industries. NAFTA, he says, is helping to widen the increasingly worrying gap between rich and poor in the United States.

In addition, anti-NAFTA sentiment has been fuelled by recent and very negative news coverage about Mexican corruption and drug- trafficking, as well as the incident last week in which 153 U.S. schoolchildren came down with a mild form of hepatitis after eating strawberries from Mexico.

While authorities have not yet determined whether the outbreak was caused by contamination in Mexico or at the U.S. processor’s plant, the story dealt a “harsh blow for NAFTA expansion and the Clinton administration’s task of enlarging free trade in Latin America,” the pro-NAFTA Journal of Commerce wrote this week.

But Clinton and his business backers insist U.S. workers and consumers have much more to gain than to lose from new trade agreements. “We do not need to be afraid of global trade,” he argued Friday, warning that “there is no reason to think that others will wait while we sit idle.”

Noting that U.S. official figures suggest the economy is running at very close to full employment, they mock the claims of NAFTA-related job losses as wildly exaggerated. The Labour Department, which provides special training and benefits to workers who have lost jobs due to NAFTA, has so far certified just over 100,000 workers as eligible over the past several years.

“The lost job argument is not worth listening to,” says Sidney Weintraub, a former trade official, who notes that trade with Mexico is “negligible” when compared with the 7-trillion- dollar size of the U.S. economy and its job-generating potential.

“The critics want to go back to the 1950’s, and that’s not possible,” adds William Workman, the U.S. Chamber of Commerce International Vice President.

He argues new trade accords are essential to keep the U.S. economy humming. “Between 1985 and 1994,” U.S. exports rose 112 percent, while U.S. gross domestic product (GDP rose by only 25 percent. In that same period, exports generated one-third of America’s economic growth and about five million new jobs,” according to Workman.

This was echoed by Clinton in his remarks Friday. Export- related jobs pay between 13 and 16 percent more than other U.S. jobs, he said. And U.S. exports are losing to European rivals. “Last year, for the first time ever, Latin American nations had more trade with Europe than the United States,” he complained.

In the end, however, the fight over fast-track may be decided by pure politics, especially those of the Democratic Party and race to succeed Clinton in the year 2000.

Gephardt is clearly positioning himself as Vice President Al Gore’s chief rival for the party’s presidential nomination. Long a NAFTA critic and very close to organised labour, Gephardt “smells the public mood,” wrote pro-NAFTA New York Times columnist Thomas Friedman last week. “He is positioning himself to take advantage of it and to saddle Mr. Gore with the free-trade argument.”

Gore, a staunch free-trader but a very cautious politician, opposes caving into Gingrich’s demands to delete environmental and worker standards in any new fast-track request, according to the Wall Street Journal.

The Chamber of Commerce’s Workman believes this is just what Clinton must do to prevail on fast track. Between the vast majority of Republicans and the dwindling number of free-trade Democrats, “the votes are there,” he says. The AFL-CIO’s Sweeney, however, is not so sure. “It’s still too early to tell,” says the soft-spoken labour leader.