Office of the United States Trade Representative


Falling Behind on Free Trade
The United States has been falling behind the rest of the world in pursuing trade agreements. 04/14/2002

Falling Behind on Free Trade
By Robert B. Zoellick

The New York Times, April 14, 2002
Copyright 2002 The New York Times Company

The United States has been falling behind the rest of the world in pursuing trade agreements. Worldwide, there are 150 regional free-trade and customs agreements; the United States is a party to only three. Each one sets new rules and opens markets for those that have signed on and creates hurdles for those outside the agreement. Trade legislation that could help remedy this imbalance is awaiting Senate consideration. Prompt action is needed to clear the way for America's international trade leadership and economic interests.

Last Dec. 6 the House of Representatives passed a trade promotion authority bill that would allow the president to negotiate trade agreements that Congress would then consider through an up-or-down vote. Within a week of House action, the Senate Finance Committee passed a similar bill by a vote of 18 to 3, demonstrating strong bipartisan support. On Jan. 4, in a speech on America's new economic challenges, Senate Majority Leader Tom Daschle emphasized his support for this trade bill and his intent "to bring it up for a vote in the full Senate early this year." Earlier this month, President Bush called on the Senate to act by April 22. Trade promotion authority, while critical, is not the only trade-related legislation stuck in the Senate.

The Andean Trade Preference Act, after a decade of helping Bolivia, Ecuador, Peru and Colombia counter the narcotics trade, will come unraveled after May 16 without decisive action in the Senate.

The Generalized System of Preferences, which has been helping the poorest countries export to the American market since 1974, expired last September and awaits renewal by the Senate. Important amendments to the highly successful African Growth and Opportunity Act have been passed by the House and now depend on
Senate action.

Failure to act on these measures will devastate thousands of small businesses in poor, struggling democracies.

While awaiting Congressional action, the Bush administration has regained America's momentum on trade. In Doha, Qatar, last year, the administration reversed the failure of the World Trade Organization's Seattle meeting in 1999 by launching new global trade negotiations -- the Doha Development Agenda, a new type of trade round that seeks to secure the link between development and trade. The administration played a key role in overcoming the obstacles to China's and Taiwan's entering the W.T.O. It also reinvigorated negotiations for the Free Trade Area of the Americas, with targets for action in the first half of this year.

We are also closing in on agreements with Chile and Singapore and are eager to launch new negotiations, starting with Central America. Yet we need Senate action on trade promotion authority before we can move
ahead in a strongly credible way.

This administration has left no doubt that it will enforce American laws against unfair trade practices. We have reassured Americans anxious about change by demonstrating that the administration, under international rules, will use safeguard provisions, like the recent decision to place temporary tariffs on some imported steel, to defend America's economic interests. And we will support Americans facing loss of work through expanded and improved trade adjustment assistance, which offers expanded unemployment benefits and worker retraining

There simply is no cause for further delay by the Senate leadership. Most senators -- Democrat and Republican -- support the bipartisan bills on trade promotion authority crafted by Max Baucus, chairman of the
Senate Finance Committee, and Senator Charles Grassley. The revival of this authority -- which earlier sessions of Congress granted to the previous five presidents -- will contribute to our economic recovery by
enhancing our ability to open markets for American exports and by lowering the cost of supplies for American
families and businesses.

While the United States idled its free trade negotiations, others did not. The European Union now has 29 free trade or special customs agreements, 22 of which it negotiated in the past decade, and is in the process of negotiating with 12 more countries. Mexico sped past the United States after the North American Free Trade Agreement to negotiate nine free-trade agreements with 29 countries.

Japan has finished its agreement with Singapore and is exploring options with Canada, Mexico, Korea, Chile and countries in Southeast Asia. Even China, which just became a member of the World Trade Organization, is
pursuing a free trade agreement -- with the countries of Southeast Asia.

Each agreement without us may set new rules for intellectual property, emerging high-tech sectors, agriculture standards, customs procedures or countless other areas of the modern, integrated global economy
-- rules that will be made without taking account of American interests.

The price for inaction will eventually be paid by American workers and consumers. One in three acres on American farms is planted for export -- generating some $53 billion for farmers and ranchers last year. Our
exports support an estimated 12 million jobs and accounted for 25 percent of American economic growth over the course of the last decade. Our last two major trade agreements -- Nafta and the global Uruguay Round --resulted in higher incomes and lower prices, amounting to an annual benefit of $1,300 to $2,000 for the
average American family of four.

America's international economic leadership necessitates opening the Senate logjam so commerce can move, economic networks can expand, and prosperity can flow freely at home and abroad.

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