By Paul Blustein Washington Post Staff Writer Tuesday, October 23, 2001; Page E01
Put on the back burner, postponed, held in abeyance: That is what has happened since the Sept. 11 terrorist attacks to many of the Bush administration's most cherished agenda items, such as Social Security privatization and "faith-based initiatives."
But not so for trade, thanks to Robert B. Zoellick, the U.S. trade representative, who is zealously pushing his goals on the grounds that the war against terrorism makes pursuing open markets more urgent than ever.
A former State Department official, Zoellick takes pride in discerning linkages between economics and foreign policy. The developing countries supporting the U.S.-led coalition against terrorism, he contends, need to receive an "unmistakable signal" that the United States is committed to leading the world toward greater openness in trade -- which means swift congressional approval of trade-promotion authority, the legislation the administration has long sought to strengthen its ability to negotiate trade agreements.
Democrats in the House of Representatives, where a bruising fight is looming over trade, accuse Zoellick of wrapping his agenda in the flag, but he has shrugged off their indignation. "Sometimes, tragedy also presents opportunities for those who are alert," he told a news conference in Moscow a few days ago -- a comment that, although it was referring to his hope for greater Russian cooperation with the West, reflected his broader view about how to respond to the terrorist attacks.
At a time when the global economy is reeling and financial markets are fragile, Zoellick asserts that success is particularly crucial at next month's meeting of the 142 member countries of the World Trade Organization, which is aimed at reaching agreement on launching a new round of global negotiations to expand international commerce.
"I believe there will be a positive response in financial markets to a launch of a round," Zoellick said. "Or another way of putting it is, we'll avoid a negative response" from financial markets, as would occur if the meeting ends in squabbling like the last one, which was held in Seattle amid raucous protests by anti-globalization activists.
While mainstream trade economists share Zoellick's concern about the importance of launching a new WTO round, and generally agree that the administration needs enhanced negotiating authority from Congress eventually, some question his argument that the Sept. 11 attacks make congressional action more imperative. "I think that's a stretch," said John Jackson, a trade expert at Georgetown University.
The risks in Zoellick's strategy became clear Oct. 9, when the House Ways and Means Committee approved a bill granting the administration trade-promotion authority, which is also known as "fast track." The bill provides that trade agreements negotiated by the administration would be subject to an up-or-down vote by Congress, with no amendments, thereby ensuring that deals won't be picked apart on Capitol Hill.
Only two of the panel's Democrats voted in favor of the bill, which passed 26 to 13. The rest were opposed on the grounds that the measure didn't go far enough toward satisfying a key Democratic demand -- ensuring that future trade agreements will include provisions requiring countries to protect worker rights and the environment.
The dearth of Democratic support could come back to haunt the administration in the future when it seeks congressional approval for the trade deals it strikes. A vote on the bill in the full House will generate very few "ayes" from the Democrats, according to Democratic leaders, though it may win on a narrow, largely party-line vote. Zoellick said he isn't worried, declaring: "I've never believed that close votes aren't good votes, as long as you pass things."
But even some of his boosters view the prospect of a narrow victory as unsettling. "Who knows what Congress is going to look like when Zoellick brings back whatever agreements he can win internationally?" said Jeffrey Schott, a trade specialist at the Institute for International Economics who strongly supports Zoellick's free-trade principles. "He may have a winning strategy for this bill in the House, but whether it's a winning strategy for implementing the administration's trade strategy -- that's another question."
At the same time, many developing countries have voiced strong discontent with draft proposals for the launch of a new WTO round, and in a potential embarrassment for Zoellick, they include some of the very nations whose support Washington is seeking in its drive against terrorism, including Pakistan, India, Egypt and Indonesia.
Developing countries have long complained that they benefit less from WTO rules than do the world's wealthy, in part because their main products, such as agricultural goods and clothing, are subject to higher tariffs and tighter trade restrictions than the manufactured goods sold by the United States, the European Union and Japan. During meetings earlier this month at the WTO's Geneva headquarters, representatives from India, Tanzania and other nations used terms such as "profound disappointment and dismay" and "basically empty of content" to describe the willingness of rich nations to put some of their barriers on the negotiating agenda. Those complaints were muted at a more recent meeting of trade ministers in Singapore, but sour notes still echoed.
All this divisiveness is a source of delight to critics of free trade. Lori Wallach, director of Public Citizen's Global Trade Watch, predicted that Zoellick's hopes for a new round will be dashed and said the "bogus, silly linkage" that he made between terrorism and trade "has solidified Democratic opposition to the fast-track bill in a way that all the best work of the Seattle coalition over the past decade could not achieve."
The bill backed by Zoellick is a compromise hashed out between Ways and Means Chairman Bill Thomas (R-Calif.) and three pro-trade Democrats -- Calvin M. Dooley of California, William J. Jefferson of Louisiana and John S. Tanner of Tennessee. To win Democratic support, the bill states a "principal negotiating objective" for U.S. negotiators shall be assurances that the countries involved in trade deals effectively enforce their own labor and environmental laws.
That provision is based on the U.S.-Jordan free-trade pact, a popular accord recently passed by Congress. It is aimed at addressing one of the Democrats' main concerns about trade deals -- that the more free companies are to move their goods and capital across international borders, the more prone governments will be to weaken worker rights and relax controls on pollution in an effort to attract investment.
But opponents of the bill include moderate Democrats who have voted for trade pacts in the past, among them Rep. Charles B. Rangel of New York, Sander M. Levin of Michigan and Robert T. Matsui of California.
The bill in effect means that "every nation will enforce its own laws no matter how bad they are," Levin said derisively. He and other Democrats favor an alternative that requires countries to observe core labor rights recognized by the International Labor Organization, including the right of workers to associate and bargain collectively.
Zoellick appears likely to get a more favorable hearing from Senate Democrats. Some are sympathetic to his argument that trying to put strong language on labor rights and the environment in trade deals will be viewed by developing countries as an attempt to block their goods rather than increase their market access.
The bill pending in the House "is a huge step forward; it includes a lot of stuff that Democrats have sought for a long time," said one top Democratic staffer on the Senate Finance Committee, who added: "Zoellick and Thomas haven't gotten the credit they deserve for what they've done substantively on this bill," partly because of all the Democratic anger over Zoellick's arguments linking terrorism and trade.
In the end, Zoellick will probably get what he wants at the WTO, too, said Dani Rodrik, a Harvard trade economist, because despite all the complaints by developing countries, they are afraid of being disadvantaged should the United States lose interest in global talks and start cutting special deals with Europe, Latin America and other close trading partners.
"I think Zoellick's statement was opportunistic and I think it's perceived as such in the rest of the world," Rodrik said. "But developing countries are terrified of being isolated, and when push comes to shove, they will feel tremendous pressure to go along."