Bush, Kerry Are Worlds Apart on Trade Issues

By the time President Clinton left the White House, he had signed 200 trade agreements and earned a reputation as a persuasive advocate for tearing down barriers and opening markets across the globe.

But days before a tension-filled 1999 meeting of the World Trade Organization in Seattle, Clinton declared that trade pacts should include tough provisions to protect workers and the environment. Officials from developing countries were furious, convinced the U.S. was simply trying to keep their products out of its markets. The meeting collapsed in acrimony.

When it comes to concern for how trade affects laborers and the environment, John Kerry could turn out to be Bill Clinton on steroids.

The Democratic presidential nominee maintains that the U.S. has not done nearly enough to ensure that expanded trade hasn’t come at the expense of workers’ rights or clean air and water. And he suggests that when companies from other nations commit abuses in these areas -- forcing laborers to work in oppressive conditions or allowing factories to spew pollutants -- it is both unconscionable and unfair, giving them a leg up against U.S. firms that must comply with strict regulations.

“You can’t have trade be a rush to the bottom,” Kerry declared early in his campaign.

Bush administration officials, warning that Kerry’s stance could kill future trade deals, have branded the Democrats “economic isolationists.”

If Kerry is elected, the U.S. is likely to pursue a “more protectionist approach,” leading to “less openness of markets, fewer new trade agreements and more use of trade as a stick rather than a carrot,” warned Michael Franc, director of government relations at the conservative Heritage Foundation in Washington.

Though it hasn’t received much attention, trade is turning out to be an arena in which Kerry and Bush have staked out sharply divergent views -- with potentially enormous consequences.

Whoever wins the White House in November will have a full battery of trade issues to contend with. At the top of the list is the Central American Free Trade Agreement, known as CAFTA, which awaits approval by Congress. Also on the front burner is a deal to create the Free Trade Area of the Americas, or FTAA, a free-trade zone that would extend from Alaska to the tip of South America.

Going forward with the FTAA, said Progressive Policy Institute analyst Edward Gresser, promises to spark the “same sort of division and emotional debate” that the politically divisive North American Free Trade Agreement generated 10 years ago. The institute, a Democratic think tank in Washington, is advising the Kerry campaign.

And still there’s more. Global trade talks aimed at further reducing barriers for agricultural goods, industrial products and services are slated to be completed next year. Under pressure from developing countries, the U.S. and other World Trade Organization members agreed this month to cut or eliminate billions of dollars in farm subsidies as a condition for reviving the stalled talks.

At the end of this year, meanwhile, global textile and apparel quotas are set to expire, possibly displacing millions of workers worldwide. Manufacturers in the U.S. and poor countries have formed an unusual alliance seeking to delay the quota phaseout, asserting that it will allow China’s low-cost factories to dominate world markets while causing potentially explosive instability in countries such as Egypt and Turkey.

The U.S. trade deficit also continues to mount. On Friday, the government reported that the deficit widened much more than expected in June, hitting a record $55.8 billion on record imports and the biggest drop in exports in nearly three years.

With so much at stake, it’s not surprising that the Bush and Kerry camps have been quick to tout their candidates’ trade credentials.

“I really don’t see how our trade agenda could be viewed as anything but a success,” said Richard Mills, a spokesman for the U.S. trade representative’s office. “Bottom line, we’ve expanded U.S. export opportunities and leveled the playing field.”

When President Bush took office, Mills points out, the U.S. had negotiated free-trade agreements with just four countries. Since then, U.S. officials have completed free-trade pacts with 12 countries, including Singapore, Chile and Australia.

At the same time, Bush backers accuse Kerry of flip-flopping on trade to placate unions and environmentalists, two key constituencies for a Democrat in an election year.

They note that the Massachusetts senator voted for NAFTA in 1994 -- and yet now contends that a provision in the agreement aimed at protecting the assets of foreign investors has made it too easy for firms to challenge U.S. environmental rules.

Kerry aides reject the notion that the senator has vacillated, saying that he has simply seen more and more evidence of the downside of globalization.

“We know a lot more today than we did a decade ago about what works and what doesn’t,” said Jason Furman, a Kerry economic advisor and former Clinton administration official.

It’s not just NAFTA that concerns Kerry. He also has said he wouldn’t sign off on CAFTA or FTAA unless they are renegotiated to include tougher environmental and labor provisions. Both agreements are strongly supported by Bush.

China has emerged as a point of contention too.

Kerry has accused Bush of not being stern enough with Beijing, even though the administration filed the first World Trade Organization complaint against China (in a semiconductor dispute this year) and levied punitive duties on three categories of Chinese-made apparel and textiles.

The Democrat has said he would consider filing additional complaints with the WTO -- which are supported by organized labor and American manufacturers -- that accuse China of boosting exports by keeping its currency artificially weak and failing to enforce labor laws. The Bush administration opposes these moves.

The Bush administration has filed 12 WTO challenges since it has come into office. That contrasts with an average of 11 per year during the Clinton administration.

Still, Bush has hardly been a purist when it comes to advocating free trade.

The administration imposed steep tariffs on imported steel and signed a farm bill whose multibillion-dollar subsidies and other supports triggered indignation among poor nations. Bush also has been criticized for limiting Iraqi reconstruction pacts to countries that supported the U.S.-led war there.

Yet for all their inconsistencies, many believe that the incumbent’s and the challenger’s respective positions on trade are rather stark in the end.

“Sen. Kerry appears to go down the path of looking for fair trade as opposed to free trade, and President Bush appears to favor free trade with less concern for fair trade,” said Jim Horvath, president and chief executive of American Crystal Sugar Co. The large Minnesota-based sugar beet cooperative opposes CAFTA because its members believe that the agreement will force them to compete against heavily subsidized producers.

Horvath voted for Bush in 2000. This time, he’s undecided.

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(BEGIN TEXT OF INFOBOX)

Declining enthusiasm

In the last five years, Americans have become less positive on the benefits of trade.

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How positive or negative do you think the growth of trade is for the U.S.?

Positive

2004: 36%

1999: 40%

Neutral

2004: 38%

1999: 35%

Negative

2004: 23%

1999: 21%

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Do you think the government should actively promote trade?

Yes

2004: 23%

1999: 32%

Allow to continue

2004: 31%

1999: 26%

Slow or stop

2004: 43%

1999: 39%

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How do you feel about the pace at which trade is increasing?

Too fast

2004: 41%

1999: 30%

Right pace

2004: 31%

1999: 39%

Too slow

2004: 18%

1999: 23%

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Source: Survey on Americans on Globalization, Trade and Farm Subsidies, Program on International Policy Attitudes at University of Maryland and Knowledge Networks