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Kerry Talks Tough on Trade

Candidate Would Review Pacts, Reinstate 'Super 301'

By Paul Blustein
Washington Post Staff Writer
Tuesday, April 27, 2004; Page A07

Sen. John F. Kerry may favor cooperating with other countries on most international issues, but on the subject of trade, the Democratic presidential candidate yesterday accused the Bush administration of failing to be confrontational enough.

Kerry asserted that the administration has "stood by" as foreign nations have broken trade rules, and he vowed that as president he would take a tough stand against practices such as the "manipulation" of currencies by China and Japan. A centerpiece of his trade policy, he said, would be the reinstatement of a legal mechanism giving the White House special authority to go after individual countries that maintain particularly high barriers to U.S. goods. That mechanism, known as "Super 301," expired in 2002.

Sen. John Kerry, at a West Virginia coal mine yesterday, said Bush has "stood by" as U.S. jobs go overseas. (Steven Senne -- AP)

"We will not turn a blind eye to clear trade violations when American jobs are on the line," Kerry said in remarks prepared for delivery in Wheeling, W.Va.

The speech, which outlined a six-point "plan to reassert our rights in the global trading system," underlined the Massachusetts Democrat's delicate and often difficult balancing act on the trade issue. A supporter of NAFTA and other free-trade accords during his years in the Senate, Kerry has rejected protectionist proposals to limit imports. But amid mounting public anxiety about the loss of jobs to foreign competition, he has sought to position himself as far more zealous than President Bush in fighting rules and practices that allegedly give foreigners an unfair advantage in the marketplace.

The trouble is, Bush also proclaims himself to be a free-trader who enforces U.S. trade laws vigorously -- the stance the president took, for example, when he slapped tariffs on imported steel in 2002. So Kerry's position, in essence, is that he would be more effective and aggressive. That sometimes forces him to offer vague promises, such as his pledge to order "an immediate 120-day review of all existing trade agreements to ensure that our trade partners are living up to their obligations," a vow he repeated yesterday as the second item in his six-point plan.

Citing Kerry's votes for free-trade agreements, a Bush campaign spokesman, Steve Schmidt, dismissed the Democrat's attack as "another example of John Kerry saying one thing and doing another, another example of John Kerry's political rhetoric on the campaign trail being disconnected from his long voting record."

The Kerry campaign released a report citing a number of instances in which the Bush administration refrained from imposing sanctions or taking other strong action against trading partners. For example, the report said, under Bush the United States has filed only 10 cases against other countries with the World Trade Organization, an average of about three a year, compared with an average of 11 cases a year brought by the Clinton administration since 1995, when the WTO was founded.

The report also blasted the Bush team for letting China and Japan keep their currencies "undervalued," which, according to the report, puts U.S. exporters "at a serious price disadvantage." China has maintained a fixed rate for its currency, the yuan, since 1994, and Japan and other Asian countries, partly to keep from losing competitive ground to the Chinese, have bought massive amounts of dollars in recent months so that their currencies do not rise too much.

Bush's trade representative, Robert B. Zoellick, has resisted exhortations to bring a WTO complaint against China on the currency issue, suggesting that because Beijing's current exports and imports are roughly in balance, the United States might well lose the case. Asked whether a Kerry administration would bring such a case, Rep. Sander M. Levin (D-Mich.), who spoke to reporters in a conference call arranged by the Kerry campaign, said, "Senator Kerry is saying, as I understand it, that he'll take a hard look."

Aside from a pledge to double the enforcement budget of the trade representative's office, Kerry's most specific proposal was to reinstate the Super 301 process. That process, initially established as part of the 1988 trade act, required the trade representative's office to publish an annual review of foreign countries' trade barriers and name the worst offenders, with the threat that Washington would impose sanctions against those countries' goods if the problems were not resolved within a certain time frame.

The irony, said Claude Barfield of the American Enterprise Institute, is that "to the rest of the world, Super 301 is like going into Iraq. Kerry is beating up on Bush for being a unilateralist, and here he brings out the ultimate unilateral trade weapon."

Although the process was used to exert pressure in some high-profile trade disputes, it became much less of an important trade weapon after the creation of the WTO in 1995. That is because the Geneva-based trade body established rules concerning many of the trade practices that Washington was upset about, and it also established a process for resolving disputes that allowed the winning country to impose sanctions on another country found to be violating the rules. Indeed, many trade experts believe WTO rules would severely limit Washington's ability to use Super 301 today.

On the Kerry campaign conference call, however, President Clinton's trade representative, Mickey Kantor, contended that Super 301 "was very helpful during our tenure to help move things forward," and Levin faulted the Bush administration for letting it expire.

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