Clinton Openers on Trade

February 05, 1993

Early tough talk on trade from the Clinton administration will have to be judged by its end results. If it leads to the protectionist policies favored by organized labor, the environmentalist lobby and certain sectors of industry and agriculture, it will mark a failure in U.S. world leadership. If it jolts the European Community, especially France, into getting serious a hurry about stalled negotiations under the General Agreement on Tariffs and Trade, the global economy could get the stimulus it so desperately needs.

President Clinton's trade representative, Mickey Kantor, is determined to use existing U.S. trade legislation and the leverage of the big U.S. market to pry open foreign markets. In doing so, he is essentially adhering to Bush administration policies while applying them with a rhetorical flourish.

This is a plausible approach, provided it does not lead to a protectionist dead-end of higher consumer prices, less competition and reduced world commerce. But to be effective, Mr. Clinton will have to move quickly to get a GATT agreement within weeks while presidential negotiation authority is at its optimum. Otherwise, he faces the task of getting Congress to renew "fast-track" authority requiring up-or-down votes, without amendments, to prevent the collapse of GATT negotiations.

For Mr. Clinton, this is one fight on Capitol Hill he should avoid. He would have to spend political capital to placate or overcome protectionist elements in his Democratic Party. He might have to accept restrictions that are contrary to free trade concepts. And the battle could complicate efforts to push through ratification of the North American Free Trade Agreement by the end of the year -- a deadline dictated by political realities in Canada and Mexico.

By slapping restrictions on steel imports and warning the EC he might halt federal government purchases of its telecommunications and power generating equipment, Mr. Kantor is making good on the following pledge during his confirmation hearings: "We will not be guided by the assumption that other nations share our commitment to free and open markets when the real world evidence makes it clear that some do not."

In the follow-up this week, Mr. Kantor labeled it "intolerable" that the EC had invoked a directive giving EC-made utilities equipment a 3 percent advantage over foreign products in the face of repeated U.S. objections. He warned that the U.S. would consider withdrawing from GATT's government-procurement code if the EC persisted -- a step that could cost the EC hundreds of millions of dollars in sales to federal agencies and set back GATT's fragile prospects.

Sir Leon Brittan, the EC trade commissioner, objected to such "unilateral bullying," but his real response will be known only after he has conferred with Mr. Kantor on Feb. 11. It had better be accommodating. The alternative could be trade wars in the midst of destabilizing trends worldwide.

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