Washington Post | March 4, 2002 | Editorial
ONE OF THE Bush administration's greatest achievements last year was progress on the trade agenda. Abroad, the president's energetic trade czar resolved a long-standing spat with Europe and helped launch a global round of trade talks. At home, the House passed a trade promotion authority bill that would give the administration the clout to negotiate more trade deals. Now, however, that momentum is in danger of fizzling.
The most immediate threat to trade liberalization is the steel lobby. President Bush has until Wednesday to decide on tariff protection following a determination by a special tribunal that imports are hurting the steel industry. Actually, imports have been falling since their peak following the Asian financial crisis, steel-company share prices have outperformed the world stock market index since October and steel prices are rising. But even if there were a strong case for protection, announcing new steel tariffs is liable to infuriate trading partners. The European Union might hit back by pressing its complaint against an American tax rule that the World Trade Organization has pronounced unfair. Developing countries might question the sincerity of the Bush administration's tariff-cutting rhetoric. Rather than pressing ahead with freer trade, the world's leaders might waste time trading insults.
Meanwhile, domestic trade politics are bogged down as well. After the House approved trade promotion authority last year, the Senate finance committee quickly followed suit, but now progress is being held up by an argument about trade-adjustment assistance. This program provides training and money to workers who lose their jobs as a result of trade, and Senate Democrats want to triple it. Republicans insist on a more limited expansion. Given that the Democratic plan would cost $1.2 billion a year -- a modest sum compared with the benefits that flow from trade -- it is absurd to make trade promotion authority hostage to this argument. The Republicans should regard an expanded trade-adjustment program as an attractive way to rebuild a centrist consensus for trade -- far more attractive than placating the steel lobby with tariffs.
A year ago the prospects for trade seemed similarly uncertain. Just as it did last year, the administration can recover the initiative on trade. But in weighing this week's steel decision, it should do the minimum damage possible to the broader trade agenda. Treasury Secretary Paul O'Neill recently testified that cutting global trade barriers by one-third would be "equivalent to a tax cut of $2,500 per year for the typical American family." The prize awaits; the challenge is to stay focused on winning it.
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