Reuters / Adam Entous and Doug Palmer
WASHINGTON (Reuters) - The next U.S. president will face a daunting number of trade policy problems -- from ensuring that China meets its market-opening obligations to heading off a trade war with Europe.
But the biggest challenge for the winner of the Nov. 7 election, whether it's Republican George W. Bush or Democrat Al Gore, could be overcoming anti-trade sentiment at home.
Since 1993, President Clinton has ushered in the North American Free Trade Agreement (NAFTA), passed permanent normal trade relations for China and clinched nearly 300 other market-opening pacts, most recently with Vietnam and Jordan.
But he will leave behind some unfinished business, including a proposed Free Trade Area of the Americas, and festering disputes, like a multibillion-dollar spat with the European Union over tax breaks for American exporters.
The next president and Congress will also inherit the thorny issue of whether labor standards and environmental safeguards should be included in future trade deals. Vice President Gore and most Democrats want to include them; Texas Gov. Bush and most Republicans insist on keeping them out.
"Labor and the environment are the biggest issues hanging over trade policy," said Greg Mastel, a global trade analyst at the Washington-based New America Foundation. "Until we address these issues, we won't really have a domestic consensus on trade and you can't really negotiate any big new agreements."
Trade And The Campaign
Trade policy has taken a back seat to domestic issues in the U.S. presidential campaign. But when Americans cast their ballots next Tuesday, they may well set the course for free trade in the United States and around the globe.
The debate over labor and the environment took center stage at meetings of the World Trade Organization (WTO) in Seattle in late 1999, after Clinton suggested that the United States could sanction countries that violate labor standards.
His pronouncement stunned Clinton's own negotiating team and outraged developing nations, which saw the president as opening the door for discrimination against their goods simply because they are produced more cheaply. Within days, the Seattle trade talks collapsed, handing Clinton one of his biggest foreign policy defeats.
The labor and environment issue has since emerged as the defining difference between Gore and Bush on trade policy.
On the stump, Gore has promised to only sign trade deals that incorporate labor and environmental standards, winning him wide support from labor unions, a key constituency.
Bush wants to keep the issues separate. "Bush believes our trade agreements should be straightforward and as free from non-trade issues as possible," said spokesman Ray Sullivan.
Business Vs. Labor And Environment
Gore's pledge to include these protections in future trade pacts worries many in the business community, who fear that approach will make it tougher to launch a new round of global trade talks and pass "fast track" authority to negotiate a Free Trade Area of the Americas and other commercial agreements.
With fast track authority, the president would be able to negotiate trade deals that can not be amended by Congress; lawmakers would only vote to accept or reject the pacts.
"I think most of the trade community would say that the chances of getting successful trade agreements with other countries are probably higher under Gov. Bush's approach than under Vice President Gore's," said Frank Vargo, vice president of international economic affairs at the National Association of Manufacturers (NAM), which supports this separation.
But others say that is an outmoded view.
"The business community has gotten very accustomed to seeing its agenda as synonymous with the national agenda in trade policy," said Thea Lee, policy director for AFL-CIO, a federation of U.S. labor unions that represent more than 13 million workers. "Those days are over."
Michigan Rep. Sander Levin, the ranking Democrat on the House trade subcommittee, agreed.
"There is a shift going on," Levin said. "More and more there's a realization that you can not separate labor market and environmental issues from the trade debate. That isn't realistic. It won't work. It won't work in the U.S. (and) it won't work in the WTO."
The growing sway of labor and environmental groups suggests Bush could be forced to deal with their concerns to get fast track through the U.S. House of Representatives, where efforts to approve new negotiating authority failed in 1997 and 1998.
Labor and environmental groups cite opinion polls showing a majority of Americans opposed the Clinton administration's free trade pacts, fearing the loss of jobs to Mexico, China and other developing nations.
"The Bush agenda, I doubt, can even get through Congress and it certainly won't be supported by the American public," said Dan Seligman, trade policy specialist for the Sierra Club, a leading environmental group that has endorsed Gore.
Paula Stern, a former chairwoman of the U.S. International Trade Commission, said fast track approval would remain a difficult objective next year, even if Bush wins the election and the Republicans keep their thin majority in the House.
Barshefsky's View
Clinton's top trade negotiator, Charlene Barshefsky, agreed the biggest issue facing the next administration would be "coming to grips with public participation, which includes the labor and the environmental issue."
But overall, she doubted U.S. trade policy would change much, regardless of who wins the White House.
"I think you will see a continuation of the trade policies of the Clinton years, which built upon the trade accomplishments of the Bush years, which built upon the Reagan years, the Carter years, so on and so forth," Barshefsky said.
"That's because it is a bipartisan effort and because the direction the country needs to take on trade is so clear. This is not rocket science. We have to be able to expand foreign markets and have ready access to those markets.":
