Schwab on trade: in an exclusive interview, America's chief trade negotiator assesses the world

International Economy, The, Fall, 2007 by Susan C. Schwab

Schwab: That question would take much longer to answer than I have time for today. Part of the intent with the new CFIUS (Committee on Foreign Investment in the United States) legislation is to be more transparent and to have a more straightforward process so as not to be sending signals that somehow we're against foreign direct investment. I can't believe we were all upset because the Japanese were buying Rockefeller Center and the Sears Tower. We need to decide what is really of concern from a national security perspective.

TIE: Do you think concerns about carbon emissions could be a major trade obstacle coming down the pike?

Schwab: It depends on how the issue is handled. We're beginning to peer at the nexus between traditional trade and traditional environmental concerns. In Doha, there are a couple of examples of trying to eliminate trade barriers on environmental goods and services, such as scrubbers. It seems to me that there are healthy ways that the two sets of issues can come together and there are unhealthy ways, both in terms of the environment and in terms of the trading system and global economic growth.

TIE: Thank you very much.

Why Agriculture?

So why do we focus so much on agriculture relative to other parts of our economy? Agriculture's share of GDP and employment is less than those of manufacturing and services. Yet agriculture as a constituency has paid a lot more attention to trade negotiations than have either the manufacturing or the services sectors. Why aren't our elected representatives heating more from, say, the financial services sector about the Doha Round? The answer is that for someone focused on profit and loss on a daily basis, a multilateral trade negotiation that has gone on for six years is bound be boring. Part of the problem is that trade negotiation has so much jargon: Swiss coefficients, for example, and amber boxes and green boxes. No business person makes decisions on the basis of Swiss coefficients, right? So until this negotiation gets far enough along to offer potentially tangible results for a business person, it's not surprising business people don't pay a whole lot of attention.

--S. Schwab

Twenty years ago in the first issue of TIE, Ambassador Schwab, then legislative director for Senator John Danforth (R-MO), published an article, "The Last U.S. Trade Bill," which discussed the "Omnibus Trade and Competitiveness Act of 1988," the bill that set the stage for NAFTA and GATT talks and dictated the terms of their approval by Congress.