[Congressional Record Volume 146, Number 144 (Friday, November 3, 2000)]
[Extensions of Remarks]
[Page E2076]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            FINANCIAL TIMES

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                           HON. DOUG BEREUTER

                              of nebraska

                    in the house of representatives

                        Friday, November 3, 2000

  Mr. BEREUTER. Mr. Speaker, this Member would like to bring the 
following insightful opinion piece from the November 1, 2000, edition 
of the Financial Times to the attention of his colleagues. Written by 
Mr. Jagdish Bhagwati, the Andre Meyer senior fellow in international 
economics at the Council on Foreign Relations in New York, this 
commentary accurately describes the weak record of the current 
Administration over the past eight years in achieving needed 
comprehensive trade liberalization. It then forcefully identifies the 
disturbing consequences for further liberalization, which is beneficial 
to the United States and the international trading system, should Mr. 
Gore win the presidency. I submit the following article into the 
Record.

                 Discrimination Disguised as Free Trade

     A Democratic Victory in the Presidential Election Would Bring 
  Disturbing Consequences for Liberalization, Argues Jagdish Bhagwati

       Many card-carrying Democrats among America's trade experts 
     are unable to make up their minds as the day approaches when 
     they must cast their vote for George W. Bush or Al Gore.
       When they think of social issues, the Supreme Court 
     vacancies to be filled and spending on liberal programmes, 
     they turn to Mr. Gore. But when they think of the Clinton-
     Gore administration's record on trade policy and of what Mr. 
     Gore promises to do, they sit up and shudder.
       The unpleasant reality is that the outcome of the election 
     has huge implications--disturbing under Mr. Gore and 
     comforting under Mr. Bush--for trade liberalisation and the 
     trading system.
       Start with the current administration's record. True, the 
     White House saw through both the Uruguay round of trade talks 
     and the North American Free Trade Agreement. But while the 
     administration fought hard and well--as indeed a Republican 
     administration would have done--both were Republican 
     initiatives that the present administration inherited when 
     they were already at an advanced stage. Furthermore, the real 
     heroes who delivered the majority votes were Republicans.
       The Democratic administration's only home-grown success has 
     been with Permanent Normal Trade Relations for China. But the 
     deal was entirely one-sided, with China giving the U.S. 
     everything on market access and the U.S. giving China nothing 
     but entry into the World Trade Organization.
       The Democratic team passed off these deals as a great 
     victory for the US and for free trade. But no amount of spin 
     can hide the ineptitude that led to the first ever failure in 
     1997 by a US administration to get fast-track authority 
     renewed by Congress: Bill Clinton managed to bring only a 
     fifth of House Democrats on board to vote for renewal.
       Nor can one forget or forgive the debacle in Seattle last 
     year when a deadly mix of mismanagement and calculated 
     cynicism--pandering to the labour unions with an eye to the 
     elections--dashed hopes of launching a new round of 
     multilateral trade negotiations and brought the WTO into 
     unmerited disrepute.
       Underlying these failures, and prospective problems under a 
     Gore presidency, are two legacies of this administration: 
     surrender to the notion that free trade requires ``fair 
     trade''; and a capitulation to labour unions that fair trade 
     requires market access to be conditional on a social clause 
     at the WTO on fulfilment of labour standards, now tactically 
     defined as ``workers' rights''.
       The rise of fair trade owes much to the first Clinton-Gore 
     administration's fixation with Japan. Bent on branding Japan 
     as an ``unfair trader'' and going for high-profile but 
     fruitless confrontations such as the car dispute, the 
     administration made ``unfair trade'' a favoured tactic in the 
     political domain.
       The labour lobbies have been smart enough to adapt their 
     demands accordingly. For decades they have worried about 
     foreign competition and outflow of investment, especially in 
     labour-intensive goods such as apparel and shoes. Now, they 
     have a great new argument: unless labour standards elsewhere 
     are similar to those in the US, trade is unfair and must be 
     stopped. This way, you get on to higher moral ground. You 
     also do so in the battle over markets. If poor countries 
     accept the demands, their costs should rise and the 
     competition will be reduced. By contrast, if they do not 
     their exports will be cut off. This is a cynical game where 
     governments that badly need support from the labour unions 
     even as they turn to the ``third way'' see domestic political 
     gain in caving in to these demands. The Clinton-Gore team--
     unlikely Tony Blair's British government--is no stranger to 
     this tactic. Last week's announcement of a free trade 
     agreement with Jordan--with labour and environmental 
     standards stipulated in the text--left John Sweeney of the 
     AFL-CIO trade union jubilant and fired up for the election. 
     Charlene Barshefsky, the US trade representative, has called 
     it a ``template'' for all trade treaties by the US.
       Only a significant power would have the hubris or the 
     chutzpah to present a trade agreement with a monarchy 
     essentially dependent on the US, with a minuscule trade 
     volume, as a model for the rest of the world to emulate.
       But that Al Gore thinks so is certain. Indeed, his policy 
     statements and the Democratic platform are unambiguous: no 
     trade liberalisation without such preconditions. If so, we 
     can forget the WTO where nothing but a big north-south divide 
     will follow, as it did in Seattle largely as a result of this 
     issue.
       And so, under Mr. Gore, Washington will contemplate more 
     templates with inconsequential performers, multilateral trade 
     liberalisation will languish, and the WTO will atrophy as the 
     world is plagued by yet more inherently preferential free 
     trade agreements masquerading as genuine non-discriminatory 
     free trade. Is this what we deserve?

     

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