Trade Test for the Democrats

BY: The Washington Post, Page A28
DATE: December 5, 2001

THE HOUSE Democrats are about to face a test of their commitment to America's international leadership, and therefore of their right to claim the political center. That test is tomorrow's vote on trade promotion authority, which is essential to the president's ability to negotiate trade deals. If the Democrats vote down this measure, they will be saying they don't want the United States to play the role it has filled for the past half-century, which is to strengthen the forces of freedom by promoting trade-driven prosperity.

The Democrats, naturally, don't like to frame the issue this way. Many say they are all for trade, just not for this particular trade bill; and it's true that some of the bill's opponents have voted for measures like the Jordan free trade agreement. Others claim that they want the United States to mold the international economic order but that this order needs to reflect priorities such as labor standards and the environment. But both these Democratic claims are unconvincing.
Voting for bilateral trade deals is not enough to establish pro-trade credentials, because the benefits of these arrangements are modest. According to a study by a team from the University of Michigan and Tufts, for example, a free trade deal with Chile would boost American GDP by $4.2 billion a year and Chilean GDP by $700 million. By contrast, the benefits to America from a global free trade deal would be 128 times larger than that, and the boost to Chile would be eight times larger. Even a limited global agreement that cut existing trade barriers by just one-third would deliver a bigger boost to prosperity. The United States would benefit 42 times more than it would from a bilateral deal with Chile; the Chileans would get three times more.

These numbers explain why Democrats cannot claim to be serious about trade while supporting only bilateral trade deals. The same point holds for regional trade pacts: Even an ambitious idea like the Free Trade Area of the Americas, which President Bush hopes to negotiate, would boost the nation's GDP by only a third as much as would a limited global deal. And to advance the global trade agenda, the administration needs to be able to negotiate complex agreements without the threat of congressional amendment. Other countries won't go through the pain of making politically difficult concessions if the counter-concessions from this country may be negated in Congress.

This is why trade promotion authority is essential. But most House Democrats appear to believe that the trade bill due to be voted on tomorrow is inadequate. They say it does too little to promote international labor standards. But the bill says that trade pacts should include requirements that countries enforce their own labor laws -- a measure that would go a long way toward improving labor conditions. The Democrats also say the bill should do more for the environment. But granting trade promotion authority would help the administration deliver on its commitment to several environmental objectives, including the phase-out of fishing subsidies that threaten the marine ecology.

Some Democrats openly oppose trade, and at least this is honest. But a large chunk of the party -- notably the so-called New Democrat caucus -- professes to support trade, knowing that the claim to occupy the respectable center of politics depends on it. These Democrats must now deliver on their pro-trade rhetoric. The opportunity for billions of dollars of economic growth, both here and in the poorest countries of the world, must not be discarded.

© 2001 The Washington Post Company