Trade Trade-offs

April 03, 1991

The Bush administration's rather zestful bashing of 37 nations accused of unfair trading practices -- with Japan, China and Taiwan predictably heading the list -- may be but a prelude to retaliatory action. If so, it could indicate that the administration is interested in an important legislative trade-off (pun intended).

It would work this way: In exchange for its agreement to continue tough mandatory sanctions against miscreants who throw up barriers to U.S. imports and dump their exports at artificially low prices, the administration would retain its authority to negotiate trade agreements subject only to an up-or-down vote in Congress, without changes.

This strikes us as a good deal. Although we have been wary of the "Super 301" provisions of the trade law that require mandatory penalties and leave little room for presidential

discretion, there is no doubt they have given the administration added leverage in trying to open foreign markets. The hand-wringing now emanating from Tokyo, Beijing and Taipei almost makes the case for Super 301. If the contentious law also gives the administration leverage to get the authority necessary to negotiate a new General Agreement of Tariffs and Trade (GATT) plus a North American Free Trade Agreement embracing Mexico as well as Canada, the exchange would be well worth it.

Should Congress deny President Bush so-called "fast-track" authority to negotiate trade deals that won't be altered later by legislative fiat, the five-year effort to obtain a new GATT agreement and the more recent bid for a trade pact with Mexico would be dead. That would be a far greater blow to a liberal world trading system than the U.S. habit, embedded in Super 301, of trying to impose its own definitions on global trading rules.

In focusing trade barrier complaints against China as well as Japan, the administration has acknowledged the commercial tensions growing between the United States and Pacific Rim countries. Heretofore, the Bush administration has gone easy on China, much to the outrage of lawmakers incensed about the crackdown on democratic freedoms by authorities in Beijing. Despite a payoff in the form of China's agreement not to veto United Nations resolutions invoked during the Persian Gulf crisis, the pressure continues from Capitol Hill to withdraw normal trading relations from China. This would be a dumb move, in our opinion, and if a public scolding or the imposition of some trade penalties heads it off, so much the better.

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