The Wall Street Journal
By MICHAEL M. PHILLIPS, Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- GOP Rep. David Dreier of California, a free-trade true believer, remembers the moment well: In the galley of Air Force One, somewhere over South America, he urged President Clinton to say something nice about imports for a change.
Three years, several lost trade battles and a riot later, Mr. Clinton is finally embracing that strategy: Trying to convince Americans to support free trade in part because imports are good for them.
"We don't just do a favor to developing countries, or to our trading partners in developed countries, when we import products and services from them," Mr. Clinton told an audience of business executives and government leaders in Davos, Switzerland, last weekend. "We benefit from those products. ... I think all people in public life have been insufficiently willing to say that."
Fresh Ammunition
The president needs fresh ammunition to beat back activists and some politicians who believe trade agreements benefit big companies to the detriment of workers and the environment. The urgency is increased by the grueling fights that are looming to secure China's entry into the World Trade Organization, launch a new round of global-trade liberalization talks and enact a law providing special trade benefits for Africa.
Alarmed, the White House is issuing ever-more-dire warnings about the dangers presented by protectionism, while seeking better ways to communicate what most economists believe: that free trade benefits both those who buy and those who sell.
"That meant crossing into the previously forbidden rhetorical territory of defending imports as a source of innovation, competition and low inflation," said Gene Sperling, the president's national economic adviser. So these days, the president is using the I-word in public, in much the way Mr. Dreier and Treasury Secretary Lawrence Summers have been doing all along.
Hailing exports and the growth they produce has always been the sure way to sell a skeptical public on the benefits of international trade. Everyone can understand why it helps workers at Boeing Co. when Argentines or Thais buy a new jumbo jet. Imports are another matter. It is easy for South Carolina garment workers to dislike foreign competition, having watched jobs move to low-wage countries, which then ship shirts back to the U.S.
Argument for Imports
The benefits of imports, however, can be harder to see. Foreign products provide consumers with more choices and lower prices, which in turn have helped keep inflation and interest rates in check.
"In many ways, imports have been the safety valve on our pressure-cooker economy," Mr. Summers said in an interview. "So I think as the expansion has gone on without inflation and we've pushed to higher and higher levels of demand, the significance of openness as a virtue has become more apparent."
Making life tougher for free-trade advocates is the sudden activism of those who oppose some trade agreements on environmental, human-rights or other grounds. Such groups hit the streets in Seattle last November, helping derail the launch of the new round of WTO trade-liberalization negotiations.
"As globalization increasingly touches the lives of American families, trade agreements can no longer be treated as the sole province of business," AFL-CIO President John J. Sweeney wrote to U.S. lawmakers this week.
No Date for China Vote
For China to join the WTO, Congress must grant Beijing permanent normal bilateral trading status. Mr. Sweeney opposes that, and a group of 53 liberal lawmakers, the Congressional Progressive Caucus, said yesterday that they are against it, too, based on economic, religious, human-rights and labor-rights grounds. The White House is worried that as the election approaches, it will get harder to secure passage. No date has been set for the vote.
"We have felt for well over a year that China-WTO would be a heroic legislative battle but that if our agreement was strong enough and we had an all-out enough effort, we would prevail," said Mr. Sperling.
At a meeting with President Clinton this week, congressional leaders discussed how much work remains to be done to ensure the China-WTO deal's approval. Texas Rep. Martin Frost, chairman of the House Democratic Caucus, warned the president of "significant opposition within the caucus right now."
But House Majority Whip Tom DeLay (R., Texas) said Democrats would have to come up with 75 to 100 votes to secure a victory, since not all Republicans would support the deal.
"There's the sober reality of head counts, and the president is going to have to deliver votes," said John Czwartacki, spokesman for Senate Majority Leader Trent Lott (R., Miss.). "It's as simple as that, and it's going to require elbow grease."
Write to Michael M. Phillips at michael.phillips@wsj.com
Copyright c 2000 Dow Jones & Company, Inc. All Rights Reserved.:
