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The Fast-Track Fight

Friday, September 12 1997; Page A24


PRESIDENT CLINTON this week kicked off his effort to win more authority to negotiate trade agreements – what's known as fast-track authority. The administration is expecting one of its biggest political battles of the fall when Congress takes up the matter.

Embarrassingly, the kickoff came without a specific legislative proposal, which Mr. Clinton's team is still refining, even though the campaign had been postponed from last spring on the theory that by now the administration would really be ready to go. The absence of an actual document reflects the political sensitivities: Most legislators of Mr. Clinton's own party oppose fast track. But if he modifies his proposal enough to win a certain number of Democratic votes, his Republican supporters begin to walk away.

On its face, it might be hard to understand why fast track would generate so much contention. The idea is to give the president authority to negotiate specific trade agreements (as spelled out, by Congress, ahead of time) that he would then bring back for an up or down vote. Congress isn't committing itself to approve any trade pact, in other words; it's just promising not to amend whatever comes out of international negotiations. Without such assurance, other countries won't bother to hold trade talks with the United States. Congress has granted similar authority to every president since 1974.

But this year's fight isn't really about the intricate mechanics of making trade law. It's about free trade and the increasing globalization of the economy and all the anxieties connected thereto. Opponents of further trade liberalization argue that it is bad for workers in this country, who lose jobs to cheaper labor overseas, and bad for workers overseas, who are exploited by multinational corporations. They want to impose U.S.-style labor standards on foreign workers, but most developing countries won't go for that, at least not yet, so the result would be less trade.

Is that bad? Many overseas workers are exploited, it's true, working in sweatshop conditions for miserly wages. But the larger picture shows something different. Economies that are open to trade and foreign investment grow more quickly and lift their populations out of poverty more quickly than economies that are closed. Trade alone won't do it; education, savings and other factors matter, too. But if House Majority Leader Richard Gephardt really wants to lift the developing world's poor into the middle class, creating new markets for American producers, he should be promoting more trade, not less.

Overall, trade is good for U.S. workers, too. One-third of U.S. economic growth in recent years has stemmed from growth in exports, and export-related jobs on average pay better. The United States has few trade barriers, so it has far more to gain than to lose by pushing other nations to lower theirs. Many U.S. industries, like car markers, have already weathered the toughest adjustment to international competition. The current boom, with near-record low unemployment, owes much to trade.

Increasing trade does hurt some American workers – and it's usually those at the low end of the wage scale, who have benefited least from the current economic expansion. But even if the United States could force other nations to adopt better "labor standards," as fast-track opponents advocate, it wouldn't erase the competitive advantage poor countries enjoy in labor costs. U.S. workers are more apt to be helped by education, training and policies that promote productivity growth and higher savings rates.

It's absolutely true that as capital becomes more mobile across borders, governments competing for investment are finding themselves less able to set their own rules – not only in labor but also in taxation, environmental policy and more. In the long run, nations will see that some coordination of standards – now resisted as a ceding of sovereignty – may in fact help bolster sovereignty.

The fastest road to that goal is to help more and more countries reach a basic level of prosperity. That requires more trade and more openness, not less.

© Copyright 1997 The Washington Post Company

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