Election Clouds Outlook for World Trade Pact : Commerce: Congress’ vote this month on GATT accord could indicate how Clinton’s international economic agenda will fare in new political climate.

When Bill Clinton made trade policy a centerpiece of his economic program two years ago, he cited its broad bipartisan and economic appeal. Expanded trade, he declared, would protect American workers from unfair competition while opening foreign markets to the products of the nation’s fields and factories.

But the upheaval unleashed by Tuesday’s elections threatens to throw cold water on President Clinton’s efforts to win congressional approval of a new world trade agreement. While most Clinton aides say that they expect the trade legislation to pass when a lame-duck Congress takes it up later this month, one senior Administration official said he fears that it could be in “deep trouble.”

That outlook is a minority view, but other officials expressed concern that this week’s electoral shake-up could threaten the Administration’s goal of expanding the domestic economy by forging new ties to the global marketplace.

The vote on the trade plan, scheduled for late this month, could provide an early signal of how Clinton’s international economic agenda will fare in the new post-election political environment. Since many of the current members of Congress will be returning, the vote could also presage whether the new Republican majority and the Democratic minority will be able to find common ground on politically sensitive issues, particularly those involving foreign policy.

“Six months ago, no one was paying a lot of attention” to the trade plan, said Lyn Nofziger, a Republican with long years of Washington experience. “Now, a lot of people will be paying attention.”

Clinton on Thursday equated the vote with such historic congressional decisions as those on the League of Nations after World War I and the Marshall Plan after World War II, and said that a delay in implementing the trade plan “will jeopardize our leadership and our prosperity.”

“It is the key link to free trade, more open societies and economic growth all around this world,” he said in a speech at Georgetown University.

But recognizing the concerns about the impact of low-wage foreign competition on U.S. jobs, Clinton said: “For too many of our people, trade still appears to be a gale-force wind, just another threat ready to blow away the prospects of a stable job at a good wage, just another problem adding to the already unstable, uncertain condition of their lives.”

Peter Sutherland, director general of the General Agreement on Tariffs and Trade, warned, meanwhile, that the United States’ failure to ratify the trade pact by the end of the year would deal a “mortal blow” to the world trade system. The General Agreement on Tariffs and Trade is the organization that has overseen global trade throughout the post-World War II era.

Supporters of the trade agreement, which would redraw the rules of international commerce, worry that key Republican leaders will retreat from their promise to support legislation implementing the new pact. The Republicans pledged their support in October, just before a final vote was to take place, on condition that Congress postpone the vote until after the election. The agreement’s opponents are already working to put off the once-delayed vote until the new Congress takes office.

But the election result could well reach beyond the immediate trade vote.

In the longer run, the so-called hawks, who are fighting expansion of free trade, see the possibility of a powerful alliance raising serious obstacles. Conservative Republicans, suspicious of a growing international bureaucracy that would regulate global trade, might team up with the pro-labor wing of the Democratic Party, led by House Majority Leader Richard A. Gephardt of Missouri, that has long been skeptical of free trade, and other opponents of free trade led in the Senate by Ernest F. Hollings (D-S.C.).

Such a political union, if joined by enough members of the House and Senate, could thwart Clinton’s program in the next two years. The possibility of such an alliance worries those who see trade as the ticket to economic expansion. It would mark the crumbling of traditional Republican support for free trade and a shift toward greater concern that the international trade authority was threatening U.S. independence and costing it money.

“All of a sudden you have a huge voter tidal wave against big government, and government doing too much,” Nofziger said. “I wonder if some Republicans are not going to have to say to themselves: ‘Will it be hurtful to me to be out there pushing another huge, international government program?’ ”

There is an additional trade problem, likely to surface after the vote. Most recent trade agreements have been negotiated under “fast-track” authority from Congress. This procedure prohibits Congress from amending a pact after it is completed--a course that assures trading partners that a meticulously written agreement will not be torn apart by the House and Senate. But the current authority expires at the end of this year and the President is expected to ask for a renewal.

To get that, said former Rep. William Frenzel, a Republican from Minnesota with long experience in the political world of trade issues, Clinton will “have to go to Congress hat in hand, and that is a costly process for a President with a Congress that is not his pal.”

“He is the economic President,” Frenzel said. “The best way for him to make 1996 look good is to have a thriving economy. He could, I suppose, cut taxes by a nickel or two, and increase spending by a nickel or two. None of these would have anywhere near the effect of a simple trade agreement. There’s so much punch in a trade agreement, he can’t ignore it.”

Take, for instance, the financial impact that the global trade plan is expected to have on the economy.

It would boost the strength of the U.S. economy by billions of dollars--$100 billion to $200 billion, according to the Administration. Even less sanguine estimates--in the vicinity of $65 billion--predict an impressive boost to the economy. To a large degree this would result from cutting tariffs by an average of 40%, eliminating them in such important sectors of the economy as steel, pharmaceuticals, paper and medical equipment.

Services, which account for about 60% of the U.S. economy, would be brought under the rules of the international trading community and made more open, contributing to a likely expansion of international operations in accounting, engineering, advertising and health care.

The agreement would open agricultural trade, bring high-tech industries into the trading regime and--proponents argued--by expanding foreign sales of U.S. goods, it would create 500,000 jobs in this country.

But critics said that, in agreeing to changed rules for international trade, the United States would leave itself open to the demands of an international bureaucracy running the new World Trade Organization, which would replace the 47-year-old General Agreement on Tariffs and Trade. They also said that it would leave certain industries, among them textile and garment manufacturers, open to unprotected competition with companies paying much lower wages in poor nations.

The agreement’s supporters have begun to worry because Sen. Bob Dole (R-Kan.), the likely Senate majority leader in January, has begun raising questions about it.

Since Sunday, Dole has emphasized that he is getting more mail from Kansas raising doubts about the trade plan than he got a year ago over the controversial North American Free Trade Agreement that linked Canada, the United States and Mexico in a new tariff-free trade zone.

“It causes me some concern,” he said at a news conference Wednesday.

Administration officials and others took such comments as nearly certain indications that Dole is having second thoughts about supporting the plan and may act on his proposal, made in September, that a vote be delayed until the new Congress is installed.

He called on Clinton to “get out front and tell people across the country” what the trade plan would do and, in particular, just what the World Trade Organization would be.

A senior White House official, speaking on condition of anonymity, said that the Administration had no more than about 10 days to pin down votes for the trade plan.

He said that Treasury Secretary Lloyd Bentsen, White House Chief of Staff Leon E. Panetta, Panetta’s predecessor, Thomas (Mack) McLarty, and Robert E. Rubin, the President’s chief economic adviser, are pressing business executives to pressure their Republican allies in the House and Senate to support the plan.

But, the official said, the real fear is that the Republicans will try to put off a vote until next year, despite assurances by Rep. Newt Gingrich (R-Ga.), the likely Speaker of the House, that he will support the measure in the lame-duck session.

Neither Republicans nor Democrats who favor the plan would gain by a delay, said Kenneth M. Duberstein, a Republican adviser who was former President Ronald Reagan’s last White House chief of staff.

“It doesn’t help the Republicans to block it or to delay it and it doesn’t help Clinton to say ‘OK, let’s wait,’ ” he said.