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Jewish World Review May 2, 2001 / 9 Iyar 5761

Morton Kondracke

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Bush walks fine line on 'sanctions' to win trade fight -- THE Bush administration has begun a major push for free-trade legislation this year, but its chances of winning a House majority are dicey at best.

President Bush launched his appeal at the 34-nation Summit of the Americas earlier this month in Quebec. But in Washington he is still well short of the 190 Republicans and 28 Democrats he'll need to win trade-promotion authority in the House.

To attract Democrats the administration has dropped its insistence that several trade bills be taken up as a single package and is willing to include labor and environmental standards as part of trade pacts, which is unprecedented for Republicans.

However, Democrats, except for a handful of centrist New Democrats, seem to be pushing for concessions that would cost the administration support among pro-business Republicans who are key to passing trade bills.

The main sticking point is whether a trading partner's failure to live up to labor and environmental standards should be enforceable by trade sanctions - that is, denial of access to U.S. markets.

Many Democrats, following the lead of the protectionist AFL-CIO, are insisting on sanctions language, which Republicans fear would be routinely used to block foreign products from entering the United States.

Within a few weeks, the administration is scheduled to lay out its trade agenda for the year, including both the agreements it wants Congress to approve and its principles for handling the labor and environment question.

U.S. Trade Representative Robert Zoellick earlier proposed putting several pending agreements plus the major agenda item, trade promotion authority (formerly known as fast track), into a single bill.

But House Ways and Means Democrats balked at the idea, and last week Zoellick told me, "We're not emphasizing package. ... I see value to [a] package, but it's not worth a big fight. The key point is to get the items done."

Items on Bush's agenda include free-trade agreements with Jordan and Vietnam negotiated by the Clinton administration, trade-preference pacts with Andean countries and the Balkans, other preferences for developing countries, renewal of trade-adjustment assistance for U.S. workers, and trade-promotion authority.

Under TPA, the president could negotiate trade pacts with other countries which Congress could vote up or down, but not amend.

Presidents had this authority until 1994, and it was used the negotiate the prosperity-enhancing North American Free Trade Agreement and the Uruguay world trade agreement.

However, in the wake of what Zoellick considers former President Bill Clinton's failure to adequately defend NAFTA from its critics, the House twice refused to renew fast-track authority. The Senate supported it.

In 1997 fast-track legislation was pulled from the floor when it appeared to have less than 218 votes (165 Republicans and 43 Democrats). In 1998 the measure was defeated, with 151 Republicans and 29 Democrats supporting it.

This year, with a Republican in the White House, present GOP support is figured at 175, and Democratic at 20, meaning that Bush and Zoellick need to attract more than 20 additional supporters.

Zoellick has had dozens of meetings with Members of both parties, and the Bush trade agenda will be presented far differently from the steamroller tactic applied to tax legislation.

Democrats insist that TPA legislation include language requiring that future trade pacts - such as the Free Trade Area of the Americas, to be negotiated over the next four years - require trading partners to observe labor rights and environmental standards.

In the past, Republicans, including Zoellick when he was a State Department official in Bush's father's administration, claimed that labor and environmental standards had no place in trade agreements.

That has changed this year, mainly because the administration needs about 10 more House Democrats to pass TPA. But so far Democrats are insisting that only trade sanctions are an acceptable enforcement mechanism for the standards.

Zoellick and centrist Democrats are working on an alternative, known as "an enforcement toolbox," that might include positive incentives for countries to raise standards, monitoring by the International Labor Organization and fines instead of sanctions.

Rep. Cal Dooley (Calif.), one of the New Democrats working on the problem, said that a possible alternative might be to specify no particular penalties or to include sanctions as one possibility.

But pro-trade Republican Rep. David Dreier (Calif.) contends, "If you move in that direction [toward sanctions], you risk losing free-trade Republicans."

Moreover, he said, "Our trading partners, particularly developing countries, have difficulty with sanctions. They're trying to climb the economic ladder, and you're blocking their access."

This year's trade debate will be a major test of bipartisanship - on both sides. The Bush administration appears to be making significant concessions to win Democratic support.

Democrats and organized labor have a choice: pocket the victories they've won on labor and the environment or demand total victory and sink chances for expanded world trade. smile.

JWR contributor Morton Kondracke is executive editor of Roll Call, the newspaper of Capitol Hill. Send your comments by clicking here.

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