Getting Free Trade Back On Track
December 21, 1999
Without a doubt, the recent fiasco in Seattle during the World Trade Organization conference damaged the cause of free trade, analysts conclude. The question now is how to revive that cause and restore free-trade momentum.
Trade experts say that won't be easy, given other recent setbacks.
- Anti-free-trade forces in the U.S. have defeated fast-track negotiating authority three times in the last five years.
- In an attempt to appease labor unions and environmentalists as the U.S. heads into another presidential election season, the Clinton administration is backing away from its strong support of free trade.
- In Europe, expansion of the European Union has bogged down as member countries increasingly resist letting weaker countries into the club -- for fear that would hurt the economic status of the entire union.
- Developing countries view the proposed addition of labor and environmental issues to the WTO agenda as nothing more than an attempt by the U.S. to adopt a new form of protectionism.
But champions of free trade point out that the WTO may not be the only game in town. "Free trade is important for world growth, but it isn't clear that the WTO is," comments David Malpass, chief international economist at Bear, Sterns & Co. He'd like to see each nation realize that trade is a benefit, and unilaterally remove its trade barriers.
Singapore earlier this month announced it will start talks with Japan on cutting trade barriers between those two nations. Singapore also wants to start talks with South Korea, New Zealand and Mexico. Japan is also working on a pact with Mexico.
Mexico has also reached trade deals with the EU and several of its Latin American neighbors.
In South America, the Mercosur trading bloc agreed last week to look at coordinating monetary policy and further cutting trade restrictions. And the EU is looking at more open trade with Latin America.
Experts ask if the U.S. will continue to fiddle until it is left out of the loop.
Source: Charles Oliver, "Free Trade After WTO's Fiasco: It's Not the Only Game in Town," Investor's Business Daily, December 21, 1999.
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