The Next President Faces Tough Trade Issues
Special to The News
27 February 2000
Caption: Associated Press Rioting at last fall's WTO talks in Seattle
had little to do with the conference's collapse. Rather, there were
critical differences in policy goals among the participating nations.
Contrary to the media sound bites that hype the character issue, the
presidential primary season has not been void of substance. Voters can
hear differences on health care, taxes, campaign finance reform and
race relations among the candidates.
These issues warrant concern, and thoughtful exchanges during political
campaigns are always a welcome surprise. However, voters in New York
should take the opportunity tomore deeply probe the candidates' views
on another issue that will influence the lives of nearly all Americans
-- U.S. trade policy.
At first glance, the remaining contenders (with the exception of the
iconoclastic Alan Keyes) in both major political parties agree on the
basics of trade. Opening markets abroad is good for U.S. exporters,
keeping markets open at home benefits American consumers, and free
trade provides an overall boost for the economy. However, the
candidates' views on the all-important details of U.S. trade policy
remain a mystery.
Voters, and also the media, must demand more of the candidates. The
failure of last December's World Trade Organization meeting in Seattle
ensures that the next president will have to make important decisions
regarding arcane, but important, trade laws that affect American
businesses and consumers.
Trade accounts for nearly 25 percent of the nation's GDP, and
trade-dependent firms are a valuable source of high-wage jobs in our
economy. The next president's views on issues such asagricultural
subsidies, anti-dumping laws and environmental protections in the
international trading system will have a significant impact on the U.S.
The collapse of the WTO conference was not the result of the dramatic
clashes between demonstrators and riot police. Rather, negotiators
failed to launch a new round of world trade negotiations because of
critical differences in policy goals among the United States, the
European Union, Japan and developing countries.
Differences in agriculture and unfair trade laws illustrate the
challenge of resolving international trade disputes. Japan is unlikely
to significantly reduce barriers protecting its agricultural sector
unless the U.S. agrees to renegotiate WTO rules on anti- dumping and
government subsidies. These laws enable U.S. industries to seek
remedies in the form of higher tariffs if foreign firms sell products
in the U.S. at prices below what they charge in their own country, or
if they benefit from government subsidies.
The next president risks being forced to choose between American
farmers, whose exports have been depressed by the Asian crisis and the
strong dollar, and American manufacturers of goods that were faced with
a debilitating surge of imports for the same reasons.
This choice, however, is a false one. The problems facing both U.S.
agricultural interests and manufacturers are the same -- namely, market
distortions in other countries. Foreign governments are keeping market
forces at bay with subsidies, quotas, tariffs,
discriminatoryprocurement practices and sham antitrust enforcement.
Rather than choosing between domestic industries, the U.S. should
articulate an unflinching free trade stance. We must condemn foreign
government subsidies that depress U.S. exports in Europe and other
markets, as well as the Byzantine system of regulation, price supports
and quotas that limit access to Japan. Simultaneously, Washington
should remain steadfast in its support of U.S. laws that punish unfair
trade practices and allow American firms to compete on a level playing
Western New Yorkers have witnessed the impact of market distortions
abroad. Makers of machine tools suffered at the hands of subsidized and
protected Japanese manufacturers during the 1970s and 1980s. During the
late 1990s, the U.S. steel industry suffered the brunt of global market
distortions. Producers in the European Union receive $1 billion
annuallyin subsidies and use safeguards to limit imports of Russian
Japan has an airtight production cartel that has depressed imports for
decades. Thus, when the Asian financial crisis slowed global demand for
steel, excess capacity was channeled into the U.S. market at dumped
prices, forcing wrenching adjustments on the U.S. steel industry during
the midst of an unprecedented economic expansion in the United States.
American producers of steel and other manufactured goods deserve better.
Conventional wisdom holds that the resolution of these conflicts will
be put off until after the presidential election. Thus, the next
occupant of the White House will be called on to restart global trade
talks. It seems prudent to ask prospective candidates for the nation's
highest office for more detailed positions on trade policy.
Furthermore, voters should make certain that the next president has the
mettle to support America's economic interests and protect our laws
against unfair trade.
ANDREW Z. SZAMOSSZEGi is a fellow at the Economic Strategy Institute in Washington, D.C.