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'Fast Track' Leads Way to Dumping ...

July 30, 2001|ALAN TONELSON and ROBERT L. BOROSAGE | Alan Tonelson is a research fellow at the U.S. Business and Industry Council Educational Foundation. Robert L. Borosage is co-director of the Campaign for America's Future

Congress will soon resume debating "fast-track" legislation that would authorize the president to negotiate new international trade deals. As with fast-track battles over the past decade, this year's debate will center on demands by trade policy critics that the president include enforceable safeguards for workers and the environment in any new agreements.

These safeguards are needed to ensure that future agreements benefit U.S. workers and domestic companies as well as multinational businesses, and to enable foreign populations to use trade liberalization to raise, not lower, living standards. Yet the recent explosion of the U.S. trade deficit, coupled with the dramatic slowdown in U.S. economic growth and the nose dive in U.S. manufacturing, underscore that fast-track legislation must address some neglected economic basics as well.

Global overcapacity--too much production for the level of demand--in many industries is a growing problem for U.S.-based producers. Since the U.S. remains the locomotive for global growth, most of the excess production inevitably is dumped here. U.S. workers and domestic companies pay the price in lost jobs and market share.

The U.S. trade laws that help combat this dumping were substantially weakened by the last world trade agreement, reached in 1993. But since then, foreign governments have felt intensified pressure to keep their workers employed despite slowing growth. Consequently, they are not only dumping more but are determined to undermine, if not eliminate, the United States' remaining legal responses.

In 1999, 234 House members supported a resolution barring the president from participating in any international trade talks whose agenda includes further weakening of anti-dumping and anti-subsidy rules.

This proposal should be included in the pending fast-track measure, especially because shortly before his appointment, U.S. Trade Representative Robert Zoellick spoke of his willingness to change these anti-dumping laws.

Actually, the United States needs broader authority to combat dumping, particularly when rock-bottom prices for imports result from excessive exchange-rate movements. Given a long history of currency manipulation by the Japanese and other East Asian central banks, the United States should be able to offset such market-distorting policies when they give foreign producers unwarranted advantages in the U.S. market, and when they price U.S. goods out of foreign markets.

Congress also should require that the administration produce detailed and timely analyses projecting the impact on domestic output, employment and the trade balance of the evolving negotiations. The last two world trade agreements and NAFTA were sold to Congress partly on fatally flawed official economic projections.

Fast-track--now called "trade promotion authority" by the administration--would prevent Congress from modifying any trade deal. If lawmakers are denied the option of amending agreements submitted by the president, they and the voters should be informed regularly about the ongoing negotiations.

Further, before any new trade agreements are finalized, Congress should require the president to bolster the U.S. government's capacity to monitor and enforce these agreements and commit the resources to do so. Even many supporters of current trade policies agree that the Clinton administration did a poor job of ensuring compliance with the hundreds of new trade agreements it signed. What is the point of meticulously constructing trade policy positions and negotiating strategies if signatories feel substantially free to ignore final agreements?

The critics' focus on labor and environmental issues has been vital in its own right and useful for reminding U.S. leaders that trade agreements affect every dimension of American life, not just the economy.

But the U.S. economy's current troubles show that trade negotiators also must do a better job of ensuring that U.S. companies and workers are dealt with fairly and that the rules are enforced. Congress must make certain that the administration gets this message before it embarks on new trade talks.

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