TRADE: New US Trade Representative Faces Obstacles

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Analysis - Abid Aslam

WASHINGTON, Feb 7 2001 (IPS) - Robert B. Zoellick won confirmation as US Trade Representative Tuesday and now faces the task of securing controversial ‘fast track’ negotiating authority for his boss, President George W. Bush.

Zoellick faces considerable opposition, not least from lawmakers whose constituent farmers, workers and small businesses are threatened by increasing imports from abroad and the prospect that employers will relocate to lower-cost labour markets.

In Senate hearings prior to his confirmation, Zoellick said it would be “extraordinarily helpful” for Congress to grant Bush enhanced authority to negotiate comprehensive trade and investment accords by April. That is when Western hemisphere leaders are scheduled to meet in Quebec, Canada to advance plans for a Free Trade Area of the Americas (FTAA), an expansion of the 1994 North American Free Trade Agreement (NAFTA).

“In the absence of this authority, other countries have been moving forward with trade agreements while America has stalled,” Zoellick said. “We cannot afford to stand still – or be mired in partisan division – while other nations seize the mantle of leadership on trade from the United States.”

Congressional Democrats said quick agreement on fast track was unlikely. “I think we’re months away,” said Sander Levin, a member of the US House of Representatives from Michigan.

Every US president since Gerald Ford has had fast track. But Congress refused to renew it for President Bill Clinton in 1994, 1995 and 1997. The enhanced administrative powers would deny lawmakers the ability to amend trade deals inked by the administration and instead bind them to either approve or reject the accords as presented to them.

Zoellick, apparently seeking to avoid a bruising fight, did not press a firm timetable on legislators at his Jan. 30 confirmation hearings. Instead, he stressed the need to build consensus and offered an emblematic gambit, replacing the term ‘fast track’, which has a connotation of privilege, with the relatively innocuous “trade-promotion authority”.

The manoeuvre echoes a similar move by proponents of “permanent normal trading relations” with China, who prevailed last year in some part by using that term in place of the customary “most favoured nation status”.

It remains to be seen whether he can win over environmentalists and labour unions hardened by their defeat over trading relations with China. They oppose fast track on the grounds that it blocks legislators’ ability to ensure that trade deals contain protections for workers and the environment. Free-traders, however, consider such concerns an unnecessary restriction on the flow of goods, services and capital.

Although they are called trade agreements, in recent years most such accords have contained provisions for private investment. For their part, legislators are almost evenly divided by party and with respect to their views on trade issues.

Zoellick has said little about how he hopes to move the camps towards consensus, other than to declare his intention to work closely with legislators and to consult the labour and environmental lobbies. He has the reputation of a classic free-trader, however, and has spent the past year or so lambasting the Clinton administration for bowing to these groups’ influence and lacking a strategic vision on trade and international economic policy.

“A lot of people feel that Clinton’s support for free trade was only rhetorical,” he said last year. “There was a lot of momentum after NAFTA to extend it … to create a Free Trade Area of the Americas, but it didn’t go anywhere.”

To some extent, Zoellick’s frustration may be personal; he was the US State department’s lead negotiator on NAFTA during the administration of Bush’s father.

His remarks also reflect the priority that the current Bush administration has conferred on trade and economic diplomacy. National Security Adviser Condoleezza Rice has said that the president sees trade as a central means of protecting US security by building international alliances. Gen. Colin Powell, the Secretary of State, has spoken of global trade and the “international economic system” as key elements of US power, alongside military force.

Zoellick himself maintains that trade benefits should be used to reward countries pursuing market reforms and deregulation and to support peace initiatives in the Middle East.

Under the first President Bush, Zoellick served as deputy White House chief of staff and under-secretary of state for economic affairs, working for Secretary of State James Baker, the Bush loyalist and confidant who anchored George W. Bush’s team in the Florida election tug-of-war. During the Reagan administration, Zoellick held a number of jobs at the Treasury department, including that of executive secretary to Baker, who headed the finance ministry.

Bush has prioritised FTAA and trade and military initiatives in Asia but Europe features prominently on Zoellick’s list of challenges.

Trade relations between the United States and Europe are strained by a litany of stubborn disputes, for example over bananas and hormone-treated beef, to which a new one, over European government financing for Airbus Industrie, is being added.

A surge in transnational corporate mergers and acquisitions is adding to tensions over competition and antitrust policy. European Union (EU) officials recently blocked a 129 billion dollar deal involving US telecommunication giants MCI WorldCom and Sprint, arguing that the merger would harm the Internet connectivity market in Europe.

The Euro also is proving a spoiler in transatlantic relations. The European currency has strengthened against the US dollar, renewing the hopes of European and a number of Third World countries that it can serve as a counterbalance to US influence and as a hedge against a US recession.

In addition, European firms have felt emboldened to circumvent US- led economic sanctions, most notably those against Iraq.

Further clouding the outlook are disagreements over military issues. Controversy over US forces’ use of depleted uranium munitions in the Balkans seems destined to roil relations with NATO allies for some time to come even as Washington bristles at European plans for a non-NATO rapid reaction force and Brussels opposes US plans for a missile defence shield.

In navigating these issues, Zoellick will draw on extensive contacts on the continent, many forged when he was a leading proponent of German unification. He has known European Trade Commissioner Pascal Lamy for more than a decade and he was one of a select few Bush advisers to meet a senior EU delegation to Washington in December. Zoellick has said one of the ultimate goals for the United States should be to establish transatlantic free trade.

His call for fast track echoes pleas by his predecessor, Charlene Barshefsky. Although the Clinton administration concluded 300 trade agreements in its eight years, officials complained they were impeded by weak support for their trade agenda. This, they added, was also partly to blame for the debacle at the World Trade Organisation’s 1999 ministerial meeting in Seattle.

The Seattle talks collapsed under the combined weight of an agenda riddled with contradictions, Third World delegates’ refusal to go along with agreements forged without their participation, and massive street protests.

Barshefsky appeared to do an about-turn toward the end of her tenure, however. In a recent published interview, she argued that fast track might not be worth the political trouble, nor strictly necessary, for the next administration. As evidence, she pointed to the conclusion, last year, of broad trade agreements with China and Vietnam.