Clinton Seeks More Power Over Trade Deals

In a move that is certain to spark controversy, President Clinton is preparing to ask Congress for sweeping “fast-track” authority to negotiate a broad array of new trade agreements, despite congressional ire over his handling of trade with Mexico and China.

Senior administration officials say they have quietly begun sounding out key lawmakers of both parties with a view toward sending Congress a formal proposal as early as this month.

Fast-track authority requires Congress to vote quickly on international trade agreements reached by the administration without the opportunity to amend them. Top administration trade strategists say U.S. trading partners will not even enter into trade negotiations with the United States if Congress can amend whatever agreements are reached.

Administration strategists have a lengthy agenda of hoped-for negotiations aimed at securing U.S. footholds in newly expanding markets in Asia and Latin America, broadening recent pacts on high-tech products and increasing opportunities for U.S. agricultural exports.

Trade analysts say many U.S. competitors, including Japan, Canada and the European Union, have already begun to tap many of these markets after negotiating trade accords that gave their own companies special preferences and left U.S. exporters on the sidelines.

For example, trade officials say BellSouth Corp., a major U.S. telecommunications firm, recently had to sell Canadian-made equipment to Chile in order to avoid high tariffs on U.S.-made goods. Canada had just completed a tariff-cutting accord with Chile.

The administration has lost at least one carefully crafted trade accord--and postponed its plans to begin negotiating others--because key elements of the most recent grant of fast-track authority have expired.

Without fast-track authority in place, the House last year effectively killed an international shipbuilding agreement that would have forced South Korea and the European Union to phase out subsidies to their producers that left American competitors at a disadvantage. House members loaded the pact with so many amendments that the other countries that signed it eventually backed out.

Now U.S. negotiators are eager to begin talks leading to a revamping of worldwide rules governing trade in agriculture, services and intellectual property--copyrights, patents and trademarks--all of which could provide bonanzas in overseas sales to American producers.

Clinton also wants to extend the North American Free Trade Agreement, which facilitates trade with Canada and Mexico, to Chile. And with an eye toward increasing trade with the rest of the Western Hemisphere, he would like to negotiate a “Free Trade Agreement of the Americas.”

Administration officials concede, however, that fast-track authority faces tough sledding in Congress. Lawmakers are traditionally reluctant to cede authority to the executive branch, and the political climate in Washington has become unusually hostile as a result of the controversy over foreign donations to U.S. political campaigns.

The trade picture also has been soured by lawmakers’ wariness over China’s new bid to join the World Trade Organization, as well as assertions by labor and other groups that NAFTA, which was passed under a previous grant of fast-track authority, has cost American jobs.

To add to the difficulty, Clinton is facing unusually stiff opposition this year from House Minority Leader Richard A. Gephardt (D-Mo.), a fierce opponent of such accords who many believe is gearing up to challenge Vice President Al Gore for the Democratic presidential nomination in 2000.

Ironically, the deepening suspicion in Congress about authorizing the administration to press ahead on new trade agreements comes at a time when many key U.S. industries are more competitive than ever--and clearly have the advantage over their foreign counterparts.

Although the U.S. trade deficit has been widening recently, analysts say the increase largely reflects the fact that the American economy is growing more rapidly than those of its trading partners, while the highly valued U.S. dollar makes imports especially attractive here.

Moreover, despite the expanding trade deficit, job growth at home has been unusually strong.

The prospect that the bid for fast-track legislation could set off a major battle in Congress has prompted administration strategists to move slowly and cautiously in crafting the proposal.

Although the administration wants the broadest authority it can get--possibly extending for as long as four years, with an option to renew it for another four--strategists concede that they may have to settle for less.

China, whose trade surplus with the United States now rivals Japan’s, is part of the reason. Many lawmakers are upset about reports that China may have illegally contributed to American political campaigns last year in an effort to influence U.S. policy.

Mexico is also part of the equation. Some members of Congress argue that American jobs have migrated across the border as a result of NAFTA, which the Clinton administration negotiated, and they do not want to give the administration still more authority in the trade arena.

Further confounding the outlook are congressional liberals’ demands for clauses in the fast-track legislation to prevent trade with countries with weak labor protections and environmental standards. Some want the fast-track legislation to require that labor and environmental practices get equal status with the trade provisions of any new accords.

Some Republicans have said they will not support fast-track legislation if the administration accedes to these demands. But Gephardt and House Minority Whip David E. Bonior (D-Mich.) have warned they will vigorously oppose the bill if it does not.

The administration has yet to decide the timing of its new proposal. Some White House strategists say they fear that the lawmakers’ preoccupation with budget issues may force a delay of fast-track legislation until mid-summer, even if the administration submits its proposal this month.

At the same time, the administration does not want to wait until next year, when its fast-track proposal would probably get caught up in the congressional election campaign.

Even if the proposal comes to a head this year, the vote in each house is likely to be close. An administration trade official lamented: “This is going to be a very tough year.”