From the Democratic Party convention, Matthew Yglesias (thanks, “Ben”:http://www.acsalaska.net/~benmuse/blog/2004_07_01_archive.html#109105125287819611) offers us half a piece of comfort: bq. Laura Tyson is, as we speak, assuring us that a Kerry administration will not break with Bush-Clinton-Bushpursuit of multilateral trade and investment agreements. (“Matthew Yglesias”:http://yglesias.typepad.com/matthew/2004/07/notes_on_tyson_.html) Yglesias interprets this assurance as meaning that “Kerry would be better for free trade”, although a continuation of the current President’s record on multilateral trade is not all that reassuring. Some actions that stand out in the Administration’s record: the 2002 Farm Bill, the “steel quotas”:http://www.inquit.com/article/121/press-urges-bush-to-drop-the-steel-tariffs and “continuing”:http://www.marginalrevolution.com/marginalrevolution/2004/07/socking_it_to_u.html (thanks to Alex Tabarrok) textile “‘safeguard'”:http://www.inquit.com/article/139/wal-mart-welfare action combined with leadership in the Doha negotiations that has so far been, to put it kindly, “muddled“:http://www.inquit.com/article/196/trans-atlantic-trade-deal and an attitude to ‘outsourcing’ that suggests the President is “uncomfortable”:http://www.cnn.com/2004/US/02/12/bush.outsourcing/ with the idea of imports. Of course, no Australian can complain too much about the Bush administration’s support for our recently concluded Free Trade Agreement. But even there … the refusal of the US side to consider any liberalization of it’s sugar barriers or to open markets for dairy or peanuts or beef in under 20 years, or to agree to mutual immunization on trade remedy actions (as in the US/Canada framework) takes some of the shine off the deal. The Bush administration has done some good things, it’s true. I would nominate their recognition that launching the Doha round in December 2001 would contribute to greater global security during troubled times as probably their most imaginative foreign policy action. Like “Daniel Drezdner”:http://www.danieldrezner.com/policy/protection.htm, however, I’m dubious about whether President Bush can claim a free-trade badge. Does it matter whether Kerry is cast in this same ambiguous mould—or better? Does it matter as much as the composition of Congress and the agenda of it’s key Committees (Senate Finance, House Ways and Means)? On balance, I think it does. The United States constitutional settlement on trade puts the source of authority in the Congress but the role of negotiation in the Executive. During most of the last century the Congress delegated authority to the Executive for practical reasons with relatively few strings attached. But since the ‘Reciprocal Trade Agreements’ legislation of the mid-1980s there has been a progressive ‘claw back’ of initiative to the Congress, driven by some of the same populist, sectional pressures that Fareed Zakaria describes in his provocative book “The Future of Freedom“:http://www.fareedzakaria.com/books/. While the initiative of any administration is held hostage to the Congress’ grant of negotiating authority, these powerful coalitions of regional and industry-based lobbies seem to have much greater mobility and impact on the direction and even the content of US trade policy than any US Trade Representative. (Perhaps that explains why no USTR has stuck it out through more than one term in the White House, at least as far as I can recall). Possibly the most important reason to hope that Matthew Yglesias is right about Senator Kerry is that a ‘free trade’ White House will be the first line of defense—for the US as well as foreign economies—against a protectionist Congress.
Peter Gallagher is a leading Australian consultant on trade and public policy.[bio].
"I can help you with strategies for, and analysis of, international markets, law and regulations, trade agreements, export policies, import restrictions… I also offer reports, conferences and master-classes for government officials and industry associations on international trade research."
Email: Peter Gallagher