Bananas, beef, steel: Trade protectionism lurks in U.S.
By Daniel W. Gottlieb -- Purchasing, 5/20/1999
U.S. support for free global trading has waned in recent months. Consider the following developments:* The U.S. issued preliminary findings of steel plate dumping.
* The U.S. House of Representatives passed a bill to reinstate quotas on steel imports.
* Prohibitive duties were slapped on a broad list of European Union (EU) imports (mostly agricultural) because of the EU's discrimination on bananas from Central America and a long-standing ban on hormone-treated beef from U.S. plains.
* There has been a strong rise in opposition to China's entry into the World Trade Organization and to a renewal of fast-track negotiating authority, which would allow the President to proceed with a broader Western Hemisphere trade agreement and to obtain expedited congressional review for it and other new trade agreements.
Less well known, however, is the growing strength of the new world trade regime that emerged less than two and a half years ago. Note, for instance, that both the banana and beef "wars" have all been adjudicated, if not resolved, within the new World Trade Organization (WTO). Fears that WTO would trample on U.S. interests and interfere with domestic trade laws have proven unfounded. The WTO has ruled in favor of the United States in 19 of the 21 U.S. complaints it has acted upon so far.
True, the WTO is slow and unwieldy. Another 23 U.S. complaints are still pending WTO action, and its 134 member nations have spent more than a year deciding who will be the next director general. Meanwhile, the U.S. continues to use its trade laws to pry open foreign markets and investigate unfair imports while operating within the WTO regime. The U.S. has imposed preliminary countervailing duties against Japan, Russia, and Brazil on steel, and Russia has agreed to roll back and cap its exports to the U.S.
In the pre-WTO world, any of these developments could have led to a spreading trade war or much louder clamors for protection. Over the past year, however, even in view of the surge in the U.S. trade deficit (mainly due to contractions from the Asian currency crises), trade conflicts have been muted. As U.S. Trade Representative Charlene Barshefsky puts it: "Despite the worst financial crisis in fifty years, the world has resisted the temptation to relapse into protectionism."
Administration opponents view the trade picture less rosily, however. They shine light on the domestic cost in jobs and U.S. company earnings from Asia and European exports. Pat Buchanan and Ross Perot may pick this theme up again in their expected bids for the White House. Also, expect the trade debate to heat up during the fight over renewal of fast-track negotiating power. Two years ago, fast track failed because the President could not round up enough votes in his own party.
This time, House Ways and Means Committee Chairman William Archer "wants to pass fast track," says Archer spokesman Trent Duffy. The problem, he says, is that the Administration has been slow in coming forward with a new proposal. Administration officials have indicated that they have misgivings about the 1997 bill the Administration crafted, Duffy says, but have not communicated what these problems are.
Congressional sources say there's apparent squabbling within the Administration and Democratic ranks over inclusion of labor and environmental protections in any new fast-track trade bill. These are the issues that contributed heavily to its defeat in 1997. They are also issues that will weigh heavily with two major constituencies that Vice President Gore has courted for his millennium presidential bid.
If fast track fails this time because of domestic politics, U.S leadership in expanding free trade to new areas like e-commerce and financial services to supplement trade in goods, services, and biotechnology will be weakened. Time is also running out. Reason: The U.S. is playing host for the first time to the annual WTO Ministerial conference in November. The question is, who will step up to the plate to keep trade expansion growing in the 21st century if a U.S. president goes to the meeting with hands tied?
Talkback
Related Content
Related Content
Sponsored Links
View All Blogs
Now Playing:
