Bush pursues renewed power for trade talks

February 27, 1991|By Stephen E. Nordlinger | Stephen E. Nordlinger,Washington Bureau of The Sun

WASHINGTON -- President Bush told congressional leaders yesterday that he will ask them this week to renew his special powers to negotiate an international agreement lowering trade barriers.

The president's request, which also will embrace the power to negotiate a free-trade agreement with Mexico, will set the stage for a bitter battle on Capitol Hill. Organized labor and the textile industry are opposed to extending the negotiating authority, which ends Friday.

White House spokesman Marlin Fitzwater said the president "expressed his intention" to seek renewed authority for two years and "heard the concerns of the leadership."

Congressional aides said later that the vote in the House and Senate will be close and that the outcome will depend on the amount of lobbying by Mr. Bush.

The president discussed the issue as talks aimed at reshaping world trade resumed in Geneva yesterday. The negotiations collapsed in Belgium in December, when Europe refused U.S. demands to lower farm subsidies.

At yesterday's brief meeting of the negotiating committee in Geneva, a proposal to resume talks on all issues, ranging from trade in financial services to global protection of copyrights and patents, was approved. But officials said it could take months to resolve the issues, if they can be settled at all.

The talks gained renewed momentum last week when the 12-nation European Community indicated it was willing to accede to demands of the United States and major farm exporters that it reduce agricultural subsidies.

The negotiations at stake, known as the Uruguay Round for the country where the talks began in 1986, are being conducted under the auspices of the General Agreement on Tariffs and Trade, the 108-nation group that oversees trade.

Opponents of a global trade accord and a trade agreement with Mexico say such pacts would reduce jobs and lead to lower wages in the United States by unleashing a flood of inexpensive imports.

But proponents, led by the president, contend that free trade lies at the heart of global economic growth.

Federal Reserve Chairman Alan Greenspan said at a Senate hearing last week that the survival of the trade negotiations is "a major issue."

"If free trade fails, we will all pay a significant price," he said.

The renewed authority sought by the Bush administration would be in the form of an extension of the "fast-track" procedure, so called because it blocks congressional amendments. The procedure will expire in June unless the administration seeks a two-year extension allowed by a 1979 trade law. The power to ask Congress for an extension ends Friday.

If there were no fast-track procedure, Congress could amend the final agreement, which would then have to be resubmitted to GATT for approval. Administration officials fear that allowing amendments sponsored by a host of special interests seeking exemptions would cause the trade agreement to unravel.

The administration had been counting on winding up the Uruguay Round agreement before the fast-trade authority expired. But now opponents will be trying to stop the trade talks by torpedoing the fast-track authority.

In a floor speech yesterday, Sen. Max Baucus, D.-Mont., chairman of the Senate trade subcommittee, called for a two-year extension of fast-track authority.

But he emphasized that the United States must "continue to aggressively conclude bilateral trade agreements" with its trading partners if the international talks collapse.

An aide to Mr. Baucus said that about 40 senators support an extension, about 40 oppose one and 20 are undecided. House aides on trade issues said the vote there would be similarly close.

A majority of either the House or Senate could block the fast-track procedure by means of a disapproval resolution.

If Congress rejects the fast-track procedure, the international talks would end quickly, since other countries would not be confident about congressional ratification of any agreement, an administration trade official said.

U.S. Trade Representative Carla A. Hills said last week that Congress would be making a "grave mistake" if it rejected the fast-track procedure.

"If we can't negotiate to create more opportunities for our entrepreneurs in foreign markets, then we may as well just close down the store," she said.

There is opposition to the Uruguay Round and the Mexico agreement among labor and textile groups.

Testifying last week before the House trade subcommittee, Thomas R. Donahue, secretary-treasurer of the AFL-CIO, denounced the Mexico accord as "an economic and social disaster for U.S. workers" and said use of the fast-track procedure "dilutes the lawmaking authority of Congress."

Donald R. Hughes, president of the American Textile Manufacturing Institute, said resumption of the Uruguay Round "is nothing but bad news for textiles and many other major segments" of manufacturing.

But a broad-based coalition of businesses and farm groups has been formed, including multinational corporations, to promote the free-trade agreements.

Arthur Dunkel, GATT director-general, said in Geneva yesterday that he has regrouped the original 15 areas of the Uruguay Round into seven larger groups in order to streamline the renewed negotiations. The number of working committees also will be reduced, he said.

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