U.S.T.R. responds

International Economy, The, Summer, 2004 by E. Richard Mills

To the Editor:

Michael McCurry, President Clinton's press secretary, once pointed out that good facts make good spin. Jeff Frankel's article in your Spring 2004 issue ignores facts to twist President Bush's trade policy into an unrecognizable form.

President Bush fought hard--and successfully--to restore the Executive's trade negotiating authority after an eight year lapse. That Trade Promotion Authority is the cornerstone of America's credibility to deliver on trade. Moreover, the Trade Act of 2002 extended and expanded a number of preferential trade laws that had lapsed, covering some $20 billion of developing country trade.

In 2001, the Bush Administration also launched new global trade negotiations in the WTO with an ambitious mandate for agriculture, goods, and services--reversing the stain of Seattle in 1999. Within months of the Cancun breakdown late in 2003, U.S. trade diplomacy reenergized the Doha negotiations.

The Bush Administration also completed the important and unfinished work on China's and Taiwan's accession to the WTO in 2001. It has resisted the onslaught of economic isolationist efforts by Dr. Frankel's party to block trade with China.

Despite the strong economic growth of the 1990s, Dr. Frankel and his colleagues failed to initiate a free trade agreement agenda, and, as a result, the United States fell far behind the European Union and others. Talk does not substitute for action. The Bush Administration, in contrast, has acted: We now have FTAs with Jordan, Singapore, and Chile; we have completed FTAs with Australia, Morocco, five countries of Central America and the Dominican Republic, and Bahrain; we are negotiating FTAs with the five countries of the Southern African Customs Union, Panama, Colombia, Ecuador, Peru, and Thailand. In addition to establishing state-of-the-art models--especially in cutting-edge areas such as services, intellectual property rights, regulatory transparency, anti-corruption, labor and environment enforcement--these FTAs amount to America's third largest export market. Stronger standards also give us leverage for better enforcement.

In the end, Frankel's claims ignore all the above facts and rest on farm spending, lumber, and steel. His halcyon recollection overlooks that farm spending was higher during his tenure in the late 1990's because of annual supplemental spending bills, and that the Bush Administration has proposed deep cuts in agricultural subsidies and tariffs in the Doha negotiations. In the case of lumber, Frankel forgets that his Administration negotiated one of many market limiting agreements on softwood lumber, that the present tariffs result from trade law actions filed by private parties, and that the Bush Administration has been seeking to negotiate changes in Canadian Provinces' subsidizing practices along with an end to the tariffs. And Frankel skips over the two ineffectual steel safeguards imposed during the Clinton Administration, in contrast with the Bush Administration safeguard that led to restructuring of over half the industry's capacity, more competitive labor contracts, and a stronger industry.

Unfortunately, Frankel resorts to partisanship when he should be fighting the protectionists who have taken over his party. Frankel is strangely silent about Congressional Democrats, the majority of whom oppose efforts to open markets. For example, Senator Kerry's unwillingness to support an extension of the vital Trade Promotion Authority; his "review" of trade agreements that would eat up the rest of the hard-won TPA in 2005; and his opposition to the FTA with Central America. Mr. Frankel's party is especially adamant about blocking free trade with poor, developing countries. In policy as well as politics, an honest assessment of one's position is an important prerequisite to positive results.

--E. RICHARD MILLS

Assistant U.S. Trade Representative

for Public and Media Affairs