Trade Boom

U.S. exports are growing fast; let's hope Congress doesn't slam on the brakes.

THE STRONG growth in the U.S. economy reported this week for the last quarter of 2006, and the year as a whole, had a lot to do with burgeoning American exports. In the first 11 months of 2006, they reached $1.1 trillion, a 13 percent increase over the same period in 2005. Though the U.S. trade deficit is still huge, recent figures show exports growing at three times the rate of imports; sales to China are up by a third. Moreover, U.S. exports to the handful of countries with which there are free-trade agreements are booming disproportionately: Though Mexico, Canada, Chile and other free-trade-pact partners make up only 7 percent of the non-U.S. global economy, they are buying 42 percent of the American goods and services sold abroad.

All this good news is one reason congressional Democrats should support President Bush's request to renew his trade promotion authority, which expires July 1. The authority allows the president to negotiate bilateral and multilateral trade agreements and submit them to a single, up-or-down vote by Congress; without it, the deals Mr. Bush has cut with Latin American, Middle Eastern and Asian countries would have been impossible. Important bilateral trade pacts with South Korea, Malaysia and Thailand, which could give another big boost to American exports, probably won't be finished by midyear, so the extra time will be needed.

Much more important, quiet talks between Bush administration and European Union officials in recent weeks have raised hopes that the global trade negotiation known as the Doha round can be raised from the grave where it was buried last summer. Doha offers the promise of enormous benefits to U.S. exporters and the world economy as a whole. The World Bank has estimated that it could lift 10 million people out of poverty in the poorest nations. But it will require big cuts by rich countries in subsidies for agricultural exports in exchange for reductions in tariffs on industrial goods and services by middle-income countries such as Brazil and India.

Mr. Bush took an important step toward reviving Doha last week by proposing a new farm bill that would reduce U.S. agricultural subsidies by $18 billion in the next five years. The average annual funding in the bill is $17 billion, the ceiling U.S. negotiators have talked about in bargaining with the European Union. In exchange, Europe would be expected to reduce its subsidies by 54 percent.

A lot of Democrats got elected in November by running against free trade; more than three dozen of them recently wrote to the new House Ways and Means Committee chairman, Charles B. Rangel (D-N.Y.), asking for a reversal of "the troubling results of the administration's trade agreements and trade policies." Fortunately, Mr. Rangel and Sen. Max Baucus (D-Mont.) of the Senate Finance Committee appear to recognize the harm that would be caused if Congress torpedoed the Doha round. They have signaled a willingness to talk with the administration about the renewal of trade promotion authority; Mr. Bush, for his part, recognized in a speech last week that trade "can also lead to hardships for our workers and their families" and offered to work with Congress to improve assistance programs for those affected. With flexibility on both sides, a deal should be possible.