Trade Issues | |
Now That Fast Track is on a Slow Boat |
Free traders are wringing their hands and bewailing the defeat of "fast
track" last week. Jim Glassman of the Washington Post called it victory
for the "flat-earth caucus." Congressman Bill Archer (R-TX) said
it was the most protectionist action he had seen in 27 years in Congress.
Meanwhile, supporters of protectionism in the labor unions and environmental
groups are congratulating themselves on winning a great victory. The truth,
however, that this was not a defeat for free trade and a harbinger of rising
protectionism. The worldwide trend toward freer trade will continue with
or without fast track. Fast track would have given President Clinton the power to negotiate
new trade deals, with Congress forced to vote on the final package in its
totality, up or down with no amendments. This is a power that every president
since Gerald Ford has had. But the authority expired in 1994 and Clinton
waited three years before asking Congress for renewal, despite numerous
warnings that he was increasing the risk of defeat. He waited because he
did not want to arouse the protectionist wing of the Democratic Party going
into the 1996 elections. Lack of fast track authority, however, does not prevent the United States
from pursuing new trade agreements. In fact, President Clinton has struck
more than 100 such agreements since 1994. Most of these have been limited
agreements with particular countries relating to specific industries. But
there have also been some multilateral agreements regarding telecommunications
and financial services. Where fast track authority is necessary is for
large, comprehensive multilateral deals, such as the Uruguay Round, which
was completed in 1994. However, the Clinton Administration has no plans for another large round
of multilateral trade negotiations. All that is on the table are some limited
regional agreements, such as adding Chile to the North American Free Trade
Agreement (NAFTA). Thus in truth there is no real reason for President
Clinton to have fast track authority at this time. Of course, it is always a bad sign when free trade is defeated, even
if only indirectly. But it is worth remembering that fast track itself
was a step back from free trade. Previously, presidents had been free to
negotiate tariff reductions on their own authority, without submitting the
agreements to Congress at all. In 1974, Congress objected to this procedure
and demanded more involvement in the trade process. The result was fast
track. In the last 25 years, exports have more than doubled as a share of gross
domestic product (GDP)
(see figure). That trend likely will continue with
or without fast track. Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis,
November 17, 1997. |
