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Clinton a Changed Figure at This Trade Summit

By Peter Baker
Washington Post Staff Writers
Sunday, November 23, 1997; Page A24

As the leaders of the Pacific Rim nations gather in Vancouver, British Columbia, this weekend for a critical trade summit, the economic powers until recently called the Asian tigers have been humbled by recent turmoil.

But President Clinton too left Washington yesterday a different figure than he was in 1993, when he convened the first Asia-Pacific Economic Cooperation (APEC) forum of heads of state in Seattle. This time the president will arrive having been denied key trade powers by Congress; four years ago, he had just pushed through the North American Free Trade Agreement.

"Clinton came in riding the waves of a huge trade victory," said C. Fred Bergsten, director of the Institute for International Economics, a Washington-based think tank, and an APEC adviser. "He had faced down the opposition. He was a hero. . . . Here, by contrast, he comes in two weeks after a stinging defeat, and that will not be lost on any of the people there. The timing could not be worse."

Rather than pushing for lower trade barriers from a political high ground, Clinton instead finds himself having to convince leaders of the 17 other APEC members that the United States is not retreating into isolationism. That task has been made more difficult by Clinton's parallel failures this month to win congressional approval of plans to repay U.S. debts owed the United Nations and provide emergency funds to the International Monetary Fund at a time when the agency is rescuing Asian economies.

Although ostensibly focused on trade issues, the summit also presents Clinton challenges on other fronts, most important how to prop up Asian financial markets to avoid more severe ripple effects back home. South Korea, the fifth-largest buyer of U.S. goods, last week became the latest Asian nation to seek international help, and analysts believe it could require more than the $50 billion Mexico needed in its 1995 rescue package.

The president also will meet again with Chinese President Jiang Zemin days after China released dissident Wei Jingsheng, and Clinton plans to use the gathering to push forward on such divisive matters as the upcoming conference on global warming, the ongoing peacekeeping mission in Haiti and even a long-running salmon dispute with Canada.

During a stop in Denver en route to Vancouver yesterday, Clinton said he was committed to helping stabilize the Asian economies, if for no other reason than self-interest. "That's important for America," he said, "because our economic strength is increasingly tied to theirs."

The president made no reference to his missing "fast track" power and vowed to forge ahead with his drive for free trade. "We need to keep working to open these markets," he said. "It's the best path for prosperity, for growth, for good jobs, for better lives for people in America and people in all these other nations."

APEC was founded in 1989 to enable financial officials to consult but was elevated four years ago when Clinton invited fellow leaders to begin annual meetings. The Pacific Rim accounts for $982.6 billion in U.S. trade annually, roughly two-thirds of the total. In 1995, the APEC powers agreed to turn the region into a free trade zone between 2010 and 2020 and last year provided the crucial momentum to seal a global deal eliminating tariffs on computers, semiconductors and telecommunications.

Clinton wanted fast-track negotiating authority to build on that progress. With fast-track power, which has been granted presidents since 1974 but generally expired in 1994, he can reach trade agreements that can be approved or rejected but not rewritten by Congress, a process considered a prerequisite before foreign leaders will sit down at the bargaining table.

In the short term, the tangible effect will be limited. Clinton has some residual fast-track authority that allows him to pursue pacts in 15 specific sectors such as chemical and forest products.

Moreover, he does not need additional power to finalize a pending worldwide pact lowering barriers in the financial services industry, which negotiators are trying to wrap up by Dec. 12.

Yet as APEC leaders decide which sectors to concentrate on over the next year, the United States will be handcuffed. White House aides said their top priorities are medical equipment, for which they have some authority but need more for certain products, and environmental technology, for which they have no authority.

After months of warning of dire circumstances if denied fast track, the administration has pivoted in recent days to minimize the consequences. APEC trading partners, Clinton aides said, know he has not surrendered and plans to lobby until he gets it next year.

"Not having fast track decidedly puts a crimp in and, in some cases, forecloses entirely certain kinds of negotiation," said Daniel K. Tarullo, the president's chief international economics adviser. But the fast-track defeat "was a delay. This was not a pulling of an approach or some sort of admission that we're not going to get it."

Independent analysts, though, warned against underestimating the larger symbolic importance.

"It won't matter that much in terms of the agenda of the meeting," said Julius Katz, president of Hills & Co., an international consulting firm, and a former U.S. trade official. "In truth, the only immediate impact is psychological. But over time, it will be costly because it will be difficult to get other countries to engage because they'll say, `Why should we stick our necks out with our body politic when we have no reason to believe you'll be there at the end of the day?' "

Outside of the formal sessions, Clinton plans to meet with several leaders to hash out other dicey issues. He will confer today with Prime Minister Jean Chretien of Canada and play golf later with Chretien and Prime Minister Goh Chok Tong of Singapore. On Monday, he will eat breakfast with a half-dozen Southeast Asian leaders, followed by sessions with Indonesian President Suharto, Japanese Prime Minister Ryutaro Hashimoto and Jiang.

Clinton wants to work out details on extending the international military presence in Haiti, which is to expire this week, and to explore strategies for overcoming deadlock on curbing greenhouse gases before next week's global warming conference in Japan.

Human rights also will punctuate those encounters. The United States has been rebuffed this year in efforts to isolate Burma from Asian neighbors, and many eyes remain focused on the unrest in Cambodia. Aides said Clinton will press Suharto on Indonesia's iron-fisted rule in East Timor.

The Jiang meeting will draw the most attention, coming just a month after his state visit to Washington and a week after the release of Wei. The Clinton administration has claimed Wei's freedom as a byproduct of its policy of engagement, but the president faces domestic pressure to push Jiang for more.

China hopes to set a date for Clinton to visit Beijing next year, but White House aides doubted that will happen. Withholding a date gives the United States some leverage with Jiang. "If Clinton is going to be the first president to walk in Tiananmen Square since 1989," said Mike Jendrzejczyk of Human Rights Watch/Asia, "the president is going to have to get more significant concessions from China on human rights."

Staff writer Paul Blustein contributed to this report.

© Copyright 1997 The Washington Post

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