Trade talk outlook 'very pessimistic,' says former top U.S. negotiator
By Staff -- Purchasing, 10/7/1999 2:00:00 AM
Prospects for significant new trade agreements look "very pessimistic" as the U.S. prepares to host a "kickoff" meeting for a new round of world trade talks at the end of this year. Controversial subjects such as antidumping enforcement and attempts to restrict foreign steel production won't be on the agenda.
That's the assessment of the upcoming World Trade Organization (WTO) Ministerial Conference in Seattle starting Nov. 30, according to Harold Malmgren, a former U.S. deputy trade representative. Malmgren, who participated in the previous two (Tokyo and Uruguay) rounds of the General Agreement on Tariffs And Trade (gatt) administered by the WTO, blames a number of factors for what he terms a "minimalist" Clinton Administration approach to the new round scheduled to begin early in 2000. Among these factors, says Malmgren, are divisions within the Democratic Party, soured relations between the White House and Congress over President Clinton's claiming credit for the North American Free Trade Agreement and not pulling his own party into line behind "Fast Track" trade legislation, and election year 2000 politics.
In an interview with Purchasing, Malmgren, who has a world trade consultancy practice, says the U.S. is in conflict with the Europeans and many Asian countries over the strategy for shaping the next round. "The U.S. approach is to minimize the scope and shorten the duration of the talks and avoid getting into circumstances where the U.S. has to make (politically) painful concessions. It's a no body bags approach."
The U.S., he says, wants to deal with less politically sensitive issues such as introducing more transparent rules in customs handling and import regulations in order to fight bribery and delays. At the same time, he believes, the U.S. wants to postpone dealing with tougher issues such as labor and environmental standards, e-commerce restrictions, high-tech services, and agricultural subsidies. By contrast, he adds that the Europeans and most Asians feel that if the agenda is limited to relatively easy issues, more difficult ones will never be resolved.
"Virtually all the countries, with the exception of the European Union, want to look at antidumping measures, and some want to talk about what they term anticompetitive behavior in dumping," Malmgren says. The Europeans also are critical of the way the U.S. brings in non-governmental organizations in formulating proposed world trade rules. "They think it's madness, and part of the greater inability of governments today to do anything because they seem to be offering concessions to everyone."
In the absence of a bolder policy for negotiating new agreements, the Administration appears to be conducting trade policy on a case-by-case or sector-by-sector basis, Malmgren says. "You don't work solely on the basis of complaints from interests. Then you're led by companies that are in trouble. The winners don't come near Washington."
One difficulty the Democrats have is that on trade policy, some of the Administration's major constituencies--labor unions and human rights and environmental groups--are opposed to new trade deals without "severely circumscribing them," Malmgren says.
Commenting on the Administration's failure to reintroduce Fast Track legislation this Congress, Malmgren says: "With the 2000 election ahead, a lot of moderates and free traders in the party are saying 'Do we really need this (fast track) until after the election.'" Fast track legislation would limit congressional altering of trade agreements negotiated by the president. It was narrowly defeated at the end of 1998, with many Democrats defecting from the president.
Republicans, Malmgren says, resent the president's handling of the North American Free Trade Agreement (nafta). When it passed Congress, "it was done primarily by the Republicans and only a handful of Democrats, but then the president took the credit himself."
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