NCPA - National Center for Policy Analysis

Foot-Dragging On Trade

August 13, 1997

President Clinton is beginning to encounter criticism for not following through on free trade agreements with countries in this hemisphere. Critics say that after his victories in getting approval of the North American Free Trade Agreement (NAFTA) and broadening the General Agreement on Tariffs and Trade (GATT), he is bowing to the protectionists in his party -- mostly labor union bosses and environmentalists.

Meanwhile, the U.S. is paying a price:

  • Tired of waiting for the U.S. to admit it into NAFTA, Chile has made bilateral trade agreements with Canada and Mexico -- giving those countries a trading edge over U.S. businesses.
  • For example, Chile recently awarded a $180 million telecommunications contract to a Canadian firm.
  • According to Charlene Barshefsky, Clinton's trade representative, other democracies in the region have negotiated more than 20 free-trade agreements that exclude the U.S.
  • As of last year, the U.S. owed more than 26 percent of its gross domestic product to imports and exports -- about triple the share in 1960 and a clear sign of trade's crucial role in the economy.

Analysts say that if the U.S. is to keep growing, it must open new markets among the 95 percent of the world's consumers who live outside its borders.

Source: Editorial, "Clinton On the Slow Trade Track," Investor's Business Daily, August 13, 1997.


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