The Bush administration has been working behind the scenes with Congress to get the U.S. back to the negotiating table for expanding free trade. There are signs of some movement toward a compromise, although many Democrats and some Republicans remain concerned about engaging in freer trade with countries that have low labor and few anti-pollution standards.

The refusal of the past congress to give President Clinton fast-track trade negotiating authority has contributed to lack of movement on the two biggest trade items on the agenda: Free Trade Area of the Americas (FTAA), which the U.S. and other western hemisphere nations have pledged to negotiate by 2005, and a new round of World Trade Organization (WTO) talks, which have been stalled since the demonstration-plagued Seattle trade ministers' meeting late last year.

Major businesses and trade association lobbies consider both FTAA and WTO expansion crucial if the U.S. is not to be beaten to the table with bilateral or regional deals among its main trade competitors, the European Union and Asian nations. Such deals, which do not involve the United States, "inevitably steer business away from U.S.-based companies," according to John T. McCarter, president of the Council of the Americas (a large business trade coalition).

While the main benefit that businesses hope to get from new trade agreements is greater access to foreign markets for U.S. exports, the other side of the coin is a freer flow of imports to the U.S. and avoidance of trade sanctions such as prohibitive duties. An example of the value of trade dispute settlement mechanisms in free-trade pacts has been avoidance of major trade sanctions during the long dispute—just settled last month—between the U.S. and Europe over bananas. It was negotiated between the two trading partners, but under rules and restrictions governed by the WTO.

Other nations have been reluctant to move forward with the U.S. without knowing that the president has backing from Congress. Fast track gives legislators a chance to vote up or down on new trade agreements, but not to amend them. With fast track, the president has a stronger hand at the table. And without the U.S. in the lead, the FTAA and expansion of WTO into services and finance is unlikely.

While labor and environmental groups are still lobbying hard for sanctions language on environmental and working conditions, some Democrats in the center and conservative wings are reportedly ready to consider compromise language that addresses their concerns. "I think [a compromise] is going to happen," says Frank Vargo the National Association of Manufacturers' point man on trade. William Reintsch, president of the National Foreign Trade Council and a high trade official in the Clinton administration, says, "I think it's moving in the right direction." But they and other trade experts warn that fast-track authority for the president is far from a done deal and the president's trade negotiator, Robert Zoellick, says it may take all year to get the legislation through Congress.

If tax, education and budget priorities are successfully negotiated with Democrats, President Bush will have a narrow window until the summer recess for getting fast track through while the U.S. economy is still growing. Any economic downturn with higher unemployment would strengthen the anti-trade agreement lobbies. Also, after the summer, Democrats will be thinking of ways to make points against Bush for the midterm elections in 2002.