Keeping on Top of TradeBy Clyde Prestowitz
Thursday, October 9, 1997; Page A23
Today's trade negotiations are akin to the arms talks of the Cold War era, for in the age of geo-economics they will determine the balance of power just as surely as did the political and military bargaining of the past. The United States must be at the table when the deals are being done.
Just as important, however, is the ability to deal intelligently from a position of strength and to ensure actual fulfillment of bargains once they are struck. So far the fast-track debate has focused on whether or not the president should be compelled to demand adherence to certain environmental and labor standards by our trading partners. These are no doubt important issues and worthy of debate, but they are likely to be irrelevant if the United States is not equipped to analyze, negotiate, monitor, finance and enforce potential deals as well as its trading partners.
In the past, this has not always been the case, and as the administration now requests authority to enter the most complex trade talks it has ever attempted with China, Latin America and the World Trade Organization, the shape of the U.S. global economic team and effort can only be described as anemic.
For example, the President's Commission on Trade and Investment in Asia, on which I served as vice chairman, reported in April that despite rapidly rising exports, U.S. firms are actually losing market share in Asian markets because U.S. exports are not keeping up with market growth. Indeed, during the past 10 years, the growth of European exports to Asia has far outstripped that of U.S. exports. Reasons for this were found to be inadequate Export-Import Bank financing, the virtual elimination of U.S. aid donations in the region, the absence of U.S. concessionary loans, the closure of consulates and inadequate staffing of business-promotion positions at U.S. embassies.
Beyond these inadequacies in Asia is the fact that the U.S. international economic team in Washington is too lean to be mean. In the Office of the U.S. Trade Representative, only two professionals make up the staff of the section dealing with all of the negotiations with China. The Commerce Department's China office has only four people left after recent budget cuts. The trade representative's Japan office also has only two people to deal with the enormous range of issues that continually arise with Japan. Six attorneys struggle to keep on top of the 36 cases the United States is currently litigating in the World Trade Organization.
Another example of U.S. organizational weakness became apparent last year when the American Chamber of Commerce in Japan conducted an evaluation of all the various trade agreements between the United States and Japan over the past 20 years. This turned out to be a more difficult task than initially anticipated because chamber officers could find no one in the U.S. government who had even a list of all the deals much less any idea of whether their terms actually were being observed. After the chamber compiled its own list and polled industry negotiators, along with current and past government negotiators, it concluded that, of 45 agreements, only 13 were being fully implemented. Based on its review, the chamber made several recommendations regarding how to achieve better success in future negotiations. Among other things it called for concrete, measurable objectives, better industry and country knowledge and language skills among U.S. negotiators, and persistent follow-up of agreements once made. With the U.S. trade deficit with Japan exploding again, these recommendations take on added urgency.
Congress must give the president fast track. It is inconceivable that the United States will not be at the table when the globalization cards are dealt. But the United States also must have the means and a plan to mount a serious international economic effort rather than simply negotiating agreements that are not enforced and that no one remembers.
The writer is president of the Economic Strategy Institute.
© Copyright 1997 The Washington Post Company