Bush joins free-trade push for Americas

Summit proposes lowering of barriers for all of hemisphere

`Fuels engines of ... growth'

April 20, 2001|By Jay Hancock | Jay Hancock,SUN NATIONAL STAFF

WASHINGTON - President Bush, who campaigned on "free trade and free markets," will have his first big chance to strike at international business barriers this weekend as he and other nations' leaders meet to consider a free-trade zone to run from Chile to Canada.

The proposed Free Trade Area of the Americas, to be discussed by 34 nations at a summit in Quebec City, would be a hemispheric version of the North American Free Trade Agreement signed by Canada, Mexico and the United States in 1994.

Like most multinational accords, the proposed trade zone is the handiwork of many years. It was broached at the first Summit of the Americas in Miami in 1994. Its delegates have spent much of the time since then collecting information on tariffs and quotas. And it isn't expected to take effect until 2005 at the earliest, if ever.

But the summit, which begins today, is being watched for signs of renewed momentum for free trade after a failed attempt to restart World Trade Organization talks in 1999. It's also seen as an important coming-out for Bush in his first multilateral summit, addressing a priority that has commanded little of his attention as president.

"Open trade fuels the engines of economic growth that creates new jobs and new income," Bush said this week in a speech to the Organization of American States. "It applies the power of markets to the needs of the poor. It spurs the process of economic and legal reform."

Whether the Quebec summit succeeds or fails, it is likely to influence Bush's push this year for "fast-track" authority to negotiate trade deals without the possibility of congressional amendments. Fast-track power for the White House would, in turn, turbocharge prospects for U.S. trade deals not only in the Americas but globally.

"The result of the meeting in Quebec will depend very importantly on what George Bush says, what people hear about what he says," said Peter Hakim, president of Inter-American Dialogue, a Washington think tank. "If the president is ready to invest in it, I think that we will have a Free Trade Area of the Americas."

Foes and partisans of a hemispheric trade deal are arrayed in lines that have become familiar since a coalition of environmentalists, labor unions and other activists besieged much of Seattle in 1999 to protest World Trade Organization free-trade initiatives.

On one side are international businesses and many mainstream economists, who argue that lowering commercial barriers boosts living standards, energizes economies and supplies consumers with better, cheaper goods.

Most of them would prefer a global reduction in tariffs, quotas and other trade hurdles. But with new worldwide talks uncertain under the WTO, they are pushing for the next-best thing: half the globe.

Bush needs "to give a strong message to the world, to say we are interested in free trade with everybody, but we are going to start with our hemisphere," said Sarath Rajapatirana, an economist at the American Enterprise Institute.

Some analysts suggest that the slowing of the U.S. economy could spur big businesses to lobby harder for hemispheric free trade. With U.S. customers cutting spending, companies may be keener to export goods, the thinking goes.

"U.S. and European markets have matured - they are still huge markets and they are still important markets - but I think we really have to be looking around the world for growth," said Jason Leuck, director of international affairs for the Telecommunications Industry Association, in Virginia.

Opposing the Free Trade Area of the Americas are those who fear that lowering trade barriers would limit the ability of nations to protect workers and environments. Many say free-trade deals reward nations that have poor records on labor, the environment and human rights. Critics include businesses and workers - the steel industry is perhaps the best-known example in the United States - who would suffer under freer trade.

"Unless the negotiators change course, you're going to have heavy opposition from trade unions, environmental groups, farm groups - the same coalition that came together in Seattle," said John Cavanagh, director of the Institute for Policy Studies, a liberal think tank.

To get an idea of what's at stake, consider orange juice, produced largely in Florida and Brazil. In the mid-1980s, Brazil supplied almost half the U.S. juice market. But in 1987, Washington slapped tariffs on Brazilian juice, jacking up the price and driving down Brazil's share of the U.S. market to less than 15 percent.

Florida growers contend that the tariff allows them to pay better wages than those paid in Brazilian groves, obey strict environmental laws that do not exist in Brazil - and earn a profit.

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