U.S. trade policy leaning toward protectionism again?
By Daniel W. Gottlieb -- Purchasing, 10/7/1999
For the most part, international trade only appears on the purchasing radar screen when the U.S. slaps countervailing duties on foreign goods or a flood of imports upsets the stability of the market. The latter is good and bad news because it creates the tension of deciding between temporary bargains and risking paying countervailing duties if an antidumping suit is filed. But antidumping cases are only one factor in judging the reliability of foreign sourcing now, as nations move to more sophisticated devices for excluding goods, such as environmental, safety and health, and quality standards. That's what makes strengthening of the World Trade Organization (WTO) as a forum for negotiating and mediating trade disputes so important.But as the U.S. prepares to host for the first time to the WTO's Ministerial Conference late this year, early warning clouds are appearing that indicate rough seas ahead for advancing free trade. (See accompanying interview with former deputy U.S. trade negotiator Harold Malmgren.)
Agreement is still lacking on putting remaining barriers on the table at the new round of trade negotiations. Among them, according to the acting director of the WTO, are high levels of protection and support of agriculture in industrialized countries; continued high tariffs; and lack of meaningful liberalization in textiles and clothing.
There is renewed clamor for tightening U.S. enforcement of antidumping laws. This was in evidence in the White House's announcement last month of the "steel action plan," which the American Iron and Steel Institute says did not go far enough.
In addition to these signs, the WTO director notes the prospect of hostile demonstrations in Seattle from various advocates for human rights, labor, and the environment. Thus the governments negotiating will be exposed to much more media attention than in the past, when WTO talks were conducted in sites more removed from the vast armada of media that's present in this country. Resulting publicity could make selling new trade liberalization harder in the home countries of many foreign representatives.
Bipartisan support for free trade is weakening on Capitol Hill. By and large, Republicans and Democrats since the 1930s have agreed that economic policy differences should stop at the shores. In the absence of a bolder Administration trade policy and given the narrow margin of Republican control in Congress, bipartisanship has foundered. Prime example was the first-ever defeat of the "fast-track" authority for limiting congressional amendments to negotiated trade agreements. The Republican leadership in Congress feels the Administration is letting them carry the water for free trade and not delivering enough votes because of divisions within the Democratic party (see Malmgren interview).
Putting these factors together, the climate for expansion of free trade is not encouraging unless the U.S. and other industrial countries work intensively on mobilizing more popular support for it. That leadership does not seem likely from the U.S. With the earlier-than-usual start for the presidential race in 2000, leading candidates seem to be staying away from the issue.
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