Naval history records few events more distressing than the fate of the Swedish warship Vasa. Launched on a bright August day in 1628, the most expensive and capable ship of its era -- 190 feet from the deck to the top of the mast, armed with 64 bronze cannon and 300 soldiers, fantastically ornamented with carved demons, mermaids, and lions -- left the dock, fired a salute to King Gustavus Adolphus, rolled over and sank less than a mile from shore.
Trade policy today presents an ominous if imperfect analogy. Like the Vasa in its first voyage, the Bush administration's ambitious trade agenda -- built on the substantive initiatives and bipartisan pro-trade coalition it inherited from the Clinton administration -- has barely left port, but in its first weeks afloat it is taking on water rapidly and appears at risk of sinking.
And the administration is devoted to renewing fast-track authority, albeit under the new name "trade promotion authority." Yet it is discussing stripping fast-track from the Vietnam agreement -- together with the Laos agreement, the only trade agreement that now enjoys fast-track protection.
Thus an administration pledged to free trade has adopted a policy that in practice amounts to low-level protectionism; its focus on the substantive trade agenda has vanished; and fast-track renewal seems further away than it was in January. The signals as the year's major trade events approach -- the Summit of the Americas in Quebec on April 20th , the Asia-Pacific Economic Cooperation (APEC) summit in Shanghai, and the fourth World Trade Organization (WTO) Ministerial Conference this fall -- are dangerous.
But historical analogies are always imperfect. Unlike the unfortunate Vasa, the administration's trade policy has not yet sunk. And it is taking on water not because of any fundamental flaw, but because of tactical mistakes. Thus, if it is willing to rethink its approach, the administration still has time to bail the water out and relaunch the ship.
To do so, the Bush administration need not change its strategic policy goals, but it must be willing to recognize and correct three major tactical mistakes.
1. Refocus on the Agenda
First, the administration must refocus public debate on substantive goals, rather than the procedural mechanism (renewed fast-track trade authority, now trade promotion authority) it hopes to use to implement them. This task should not be difficult, but it will require the administration -- in particular the President himself -- to devote more time and political capital to trade.
Based on U.S. Trade Representative Robert Zoellick's testimony to the Ways and Means Committee on March 7th, we can determine that the Bush administration's specific goals fall into four principal categories:
Bilateral Free Trade Agreements: Negotiation of new free trade agreements with Chile and Singapore.
This agenda is ambitious and in many ways admirable. It is also familiar: each element, without exception, builds upon or confirms an initiative begun under President Clinton. One could ask for more -- the Bush administration could focus on the information technology trade agenda (thus far ignored); could give greater priority to Russia's integration into the WTO; and should endorse normalization of trade relations with Laos as well as Vietnam. But on the whole, those who supported President Clinton on high-tech trade, China's WTO accession, and stronger trade ties with Africa and the Caribbean should be able to endorse this agenda without hesitation.
The administration, however, has failed to make the case for this agenda to the public. President Bush himself is principally responsible for this. Unlike President Clinton -- whose American University address in February 1993 laid the foundation for a highly successful first term, including passage of North American Free Trade Agreement, negotiation of the U.S.-Japan Framework Agreement, and conclusion and passage of the Uruguay Round that created the WTO -- President Bush has given no major trade policy address and instead has contented himself with occasional boilerplate about the abstract value of free trade. Thus, the content of his trade policy has faded from public view, and the tactical negotiations over fast-track have overshadowed his actual goals.
This approach is wholly inadequate. The public is unlikely ever to become enthusiastic about free trade in the abstract, let alone fast-track. Rather, the way not only to win renewal of fast-track but to lay the groundwork for a successful trade agenda is to present specific policy goals that can win broad support -- the FTAA as the first priority -- and then show why fast-track is necessary to achieve them. Only the President and his officials can do this; they need to do more and do it rapidly.
2. Regain the Center
Second, in trade as in many other fields, in attempting to govern from the right, the administration is losing the center. It must be willing to tell right-wing market fundamentalists to compromise if it hopes to rebuild the bipartisan pro-trade coalition responsible for the trade achievements -- China's WTO accession and permanent normal trade relations, strengthening of trade relations with Africa and the Caribbean, strong endorsement of U.S. participation in the WTO -- of the year 2000.
This is particularly clear in the case of the U.S.-Jordan free trade agreement. The agreement -- only the fourth free trade agreement the United States has ever concluded -- is precisely what its title implies: it abolishes all tariffs, liberalizes a number of service sectors, and is the first free trade agreement ever to address electronic commerce. Its effect, therefore, will be to dramatically liberalize U.S.-Jordan trade relations. Right-wing market fundamentalists, however, are opposing the agreement on the grounds that it contains labor and environmental provisions.
This opposition, combined with a substantively myopic and politically unrealistic belief that the Jordan agreement can be used as a bargaining chip to win Democratic support for fast-track, appears to be why the administration has refused to submit it to Congress or even to clearly endorse it. The Jordan agreement's labor and environmental provisions may not embody a model suited to all or most future trade agreements. More broadly, progressives must recognize that trade policy, in Jordan or elsewhere, can only play a minor supporting role in improving overseas labor and environmental conditions and should not be the major focus of debate on these issues. But the Jordan agreement's labor and environmental chapters are far from unreasonable and to use them as an excuse to avoid passing the agreement is bad politics, bad trade policy, and bad diplomacy.
These chapters neither set new standards for Jordan nor bar any future reform of national labor and environmental laws. Rather, they simply say neither partner should refuse to enforce national labor and environmental laws to gain trade or investment advantages. This is, incidentally, a formula most Republicans endorsed in the fast-track bill of 1997, and the administration understands very well that to reach consensus with Congress on fast-track, it must be willing to accommodate Democratic concerns over labor and environmental policies. This need not mean applying the Jordan formula to all future trade agreements, but it should certainly include asking the Republican right to endorse a fully negotiated, comprehensive, and rigorous existing free trade agreement.
The failure to submit the Jordan agreement to Congress therefore not only delays a trade liberalization agreement valuable in its own right, but makes a future agreement on fast-track more difficult. Thus, by pandering to right-wing fundamentalists, the administration is unraveling the centrist pro-trade coalition essential to the trade policy achievements of the year 2000. It should endorse the agreement as is, noting that future agreements may not and perhaps should not have this type of labor and environmental provision, and submit it to Congress without delay.
3. Negotiate with Congress from Strength, Not Weakness
Third, the administration has fundamentally misunderstood the nature of fast-track and in doing so forced itself to negotiate for fast-track renewal from a position of profound weakness.
Fast-track debates generally portray the procedure as a one-way delegation of congressional authority to administration negotiators, and the administration appears to have accepted this caricature. This view implies that Congresses must have incentives to approve fast-track, and in the search for such incentives, the administration has adopted the perverse tactic of withholding broadly supported market-opening trade agreements (Jordan, Vietnam) and hinting at import quotas for steel.
The truth, however, is that fast-track is a careful balance of concessions by both Congresses and administrations. As Congresses agree to consider trade agreements in a limited time and to vote on trade agreements without amendments, administrations agree to allow Congress to set negotiating objectives and to seek prior approval from Congress before negotiating any major trade agreement. These administration concessions are the principal means for Congress to play a major role in setting trade policy, and this points to a fact the administration has ignored in its campaign for fast-track.
Fast-track's absence in the past four years did complicate the Clinton administration's negotiations, in particular by delaying a U.S.-Chile free trade agreement. But it also weakened congressional influence over trade policy. The result is clear in the Jordan agreement, where -- with no congressional negotiating objectives or prior approval requirements -- President Clinton was able to include labor and environmental provisions despite Republican objections. Likewise, if fast-track is not renewed, present or future Republican administrations could take the same approach to marginalize Democratic congressional concerns. And this in turn points to a large congressional, and specifically Democratic, stake in renewing fast-track.
Both sides, in fact, have an interest in reaching a centrist consensus that accommodates their principal concerns. Without fast-track, the administration has a second-best option of pursuing its goals without congressionally established objectives. This would be more difficult and perhaps make some valuable policy goals harder to reach for the administration, but the cost to Congress might be even higher. The administration's failure to understand this is at the root of its unfortunate tactical maneuvers on the Jordan and Vietnam agreements to Congress; instead of helping members of Congress see their stake in renewing fast-track, it is searching for concessions it can present to them in return for support.
This is a fundamentally mistaken approach that is unlikely to yield a good result. But a firmer grasp of the realities of fast-track, founded on the lessons of the past four years, would allow the administration to change its approach. It could submit the agreements to Congress without fear of prejudicing later congressional support for fast-track. In so doing it could win early success and international confidence in its policy; build domestic support and momentum for larger achievements in the future; and then move ahead to bargain with Congress for an equitable compromise on fast-track that meets the basic needs of both sides.
Early into the Bush administration, hopes for a successful trade policy that would build on the Clinton legacy are sinking fast. But the ship is still above water, and a few modest shifts can refloat it, prevent it from suffering the embarrassing fate of the Vasa, and set it on course for its destination.
