Only Free Trade Is in America’s Interests

Is Bill Clinton a free-trader? Only the President can answer that. But the doubts grow daily.

In part those doubts can work to America’s benefit. Four years of unapologetic free-trader George Bush did not produce a GATT trade accord. Clinton’s views, to the extent they are clear, are like the Bad Cop to Bush’s Good Cop. Clinton’s muscular stance might actually scare, and bend, some U.S. trading adversaries.

The problem is that his views seem not fully formed. Thus the White House, unintentionally or not, is sending mixed signals to trading partners, who worry that the United States is turning protectionist.

Certainly the Administration is preoccupied with its domestic economic agenda. But trade should be an integral part of that plan. Exports, after all, have been an engine of U.S. growth over the last few years. Although Clinton endorsed the North American Free Trade Agreement during the campaign, he did it late and arguably tepidly. Not much has changed since he took office. He has not acted to push for conclusion of the GATT multilateral trade talks by March, when congressional “fast track” authority expires. Meanwhile, industry and labor have been clamoring for protectionist tariffs on imports ranging from steel to cars.

The Administration could argue it is just positioning itself as a tough negotiator. But without a clearly articulated policy orientation, what’s the goal?

On Monday U.S. Trade Representative Mickey Kantor issued a toughly worded statement barring European firms from bidding on millions of dollars’ worth of U.S. government contracts. The action was taken in retaliation for “intolerable” new European procurement rules that unfairly exclude U.S. companies from bidding on telecommunication and other utility equipment contracts. The European Community called the move “unilateral bullying.”

Some of that is European posturing in the middle of the GATT negotiation; and the actual stakes on this issue are small. The potential market for U.S. products in the European utilities markets is about $1 billion, but the value of European goods that would be barred, beginning March 22, would be no more than $50 million.

The issue may be resolved when Kantor meets with EC trade commissioner Sir Leon Brittan in Washington Feb. 11. The latest flap with the EC is symptomatic of the push and pull between the United States and Europe over trade. Disagreements over agricultural reforms have been a major obstacle to concluding a seven-year effort to craft a new world trade agreement that would cover agricultural, services and intellectual properties for the first time. When Kantor meets with Brittan, it would be the ideal opportunity for the Clinton Administration to commit to a free-trade policy that leaves no one in doubt as to this nation’s ultimate goal.