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Fast-Track Is a Fiscal Jump-Start

November 27, 2001|DANIEL T. GRISWOLD | Daniel T. Griswold is the associate director of the Cato Institute's Center for Trade Policy Studies

On Dec. 6, the U.S. House will have the opportunity to boost the economy, strengthen ties with allies in the war on terrorism and fight poverty and low standards in the Third World. The opportunity is not some multibillion-dollar stimulus or foreign aid package; it's trade promotion authority.

The so-called fast-track bill would give President Bush the authority to negotiate market-opening trade agreements with other nations. It would allow him to submit trade agreements to Congress for an up-or-down vote without amendments, so that foreign governments would not have to negotiate twice, first with the administration, then with Congress.

Every president since 1974 has been able to pursue trade agreements under those basic rules. There are compelling reasons why Bush should be allowed to as well:

* Trade expansion promotes U.S. prosperity. Economic growth in the past decade was the most robust during those years when trade--imports and exports--was growing most rapidly. Trade stimulates competition, innovation and efficiency, making U.S. workers more productive and raising family incomes. Imports keep prices down at the store, especially for low-income families, thereby boosting spending and stimulating the economy. Fast-track would lead to regional and global trade agreements that would open markets for the most competitive U.S. exports.

At their early November meeting in Qatar, members of the World Trade Organization agreed to pursue a new round of negotiations to lower barriers to agricultural, industrial and service exports, including a cut in Europe's huge farm export subsidies. A study by the University of Michigan estimates that even a one-third cut in tariffs on such exports would boost annual global production by $613billion, including $177billion in the U.S.

* Trade expansion promotes U.S. security. Nations that trade with one another tend to get along better. The historic U.S. postwar shift away from Depression-era trade wars and toward open trade was driven as much by foreign policy and security concerns as by economic self-interest.

Trade with Europe, Japan and developing countries cemented the Western alliance against communism. Free trade within the European Community, an American condition of Marshall Plan aid, has made another major European war virtually unthinkable today.

Nations open to trade are far more likely to enjoy full civil and political liberties than those closed to trade. Trade tills the soil for democracy by introducing new ideas, encouraging tolerance of other cultures and creating hope for a better life through individual effort. U.S. global commercial ties have encouraged diplomatic and military cooperation from other nations in the war against terrorism.

* Trade expansion promotes higher standards in developing countries. A recent World Bank study found that those poor nations that embrace globalization grow the fastest and reduce poverty the most. Faster growth blesses poor nations with the resources to raise labor and environmental standards. Making higher standards a precondition for trade with the West, as some members of Congress and trade critics demand, would deny poor countries export opportunities they need to raise those very standards. Trade sanctions would perversely punish poor countries for being poor.

The Democratic Party and union leaders at one time understood that trade benefits working families by curbing the monopoly power of big business and delivering lower prices at the store. But today, under pressure from misguided environmentalists and self-serving unions, Democratic leaders in the House want to load the fast-track bill with environmental and labor restrictions that poor countries rightly suspect would be used to keep Western markets closed to their exports. For the sake of our national security and economic interest, Democrats and Republicans should give Bush the authority he needs to break down remaining barriers to peaceful trade and cooperation among civilized nations.

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