November 16, 1997

Free Trade Defeat Not Critical - But Disaster For Dems

Carnage resulting from President Clinton’s quest for “fast track” trade authority is unbelievably costly to the Democratic Party, considering the meager benefits at stake.

The real issue was new jobs at global pay, versus protection for relatively high-pay union jobs -- not altruistic concern for worker rights and the environment.

Clinton opted for free trade, even though unions bitterly opposed. The president’s stand was realistic in this new era of global economy. Nevertheless, it was risky in view of the Democrats’ dependence upon union money and organizational support.

A majority of Republicans voted with Clinton. However, he could persuade only a fourth of congressional Democrats to back fast-track. Under that authority, the president would have had a free hand to make trade deals with foreign governments. Congress would have only the opportunity to vote the proposed pact up or down, without amendments. Every prior president since President Gerald Ford had fast-track authority.

Despite a rare Sunday session of Congress, and intense arm-twisting, the White House fell six votes short of extending fast-track to Clinton. Rather than see the proposal defeated, Clinton asked House Speaker Newt Gingrich to table the measure until circumstances for passage might be more favorable.

It is not likely that fast-track will pass in Clinton’s administration -- if ever. The defeat is more devastating than that of his first-term health care program.

The Teamsters and AFL-CIO backed House Minority Leader Dick Gephardt who steadfastly opposed Clinton on fast-track. This may boost Gephardt’s chances for the Democrat presidential nomination in 2000 -- another disaster in the making.

Conversely, Vice-president Al Gore’s chances for 2000 have all but been wiped out inasmuch as he staunchly stood by Clinton on fast-track.

Clinton compounded his political problem by declaring that opposition was a “no brainer,” implying that Democrat opposition was stupid. Gephardt loyalists, three fourths of House Democrats, vented their ire openly at the party caucus preceding the ill-fated Sunday session.

Significantly, Clinton has plunged prematurely into the “lame duck” phase which plagues all presidents in the tail-end of their second terms. With no prospects of awarding future favors, presidents are ignored by Congress. They usually turn to foreign affairs to bolster their historical legacy, as Clinton seems to have done.

With the momentous split in the Democratic party, Republicans are assured of retaining control of Congress next year -- maybe even enlarging their majority. The presidency also seems more attainable for the GOP three years from now.

In retrospect, fast-track was too inconsequential for an intra-party show down.

Trade agreements have little effect on exports and imports. Businesses are adept at working around obstacles. They pretty much set their own trading practices in accordance with competition.

Chile expected advantages under fast-track, but other South American trading partners were relieved that the initiative crashed. Brazil’s economy is shaky and has adopted protectionism in a desperate effort to save itself.

“It’s a myth that all of South America is eager to jump into free trade,” says Arturo Valenzuela, director of the Center for Latin American studies at Georgetown University. “It’s also a myth that free trade is the only way to develop increased economic ties.”

Nations try to put teeth into their trade agreements by jiggering tariffs -- taxes on imports and exports. Such measures do more harm than good. They fuel trade wars which can quickly turn into disasters -- a la the Great Depression of the 1930s.

The North American Free Trade Alliance is roundly criticized by American labor unions and various industries adversely affected by low cost, foreign competition.

Both sides of the NAFTA controversy cite statistics supporting their viewpoints; but when all is said and down, nothing much changed. Mexican tomatoes had already wiped out Florida’s tomato industry. U.S. automobile manufacturers had already built factories there to take advantage of lower labor costs and proximity to markets. NAFTA simply lowered Mexican tariffs to improve U.S. export opportunities there.

As with Mexico, Brazil already has garnered a large part of the Florida orange juice market. A trade agreement will not change what already has happened. Florida sugar survives with tariff protection, but this may not be enough if and when our embargo of Cuba is eventually lifted. The only hope for American tomato and citrus growers at this time is a reduction in the Brazilian tariffs on other American products to offset the agricultural loss -- or to diversify into other farm products such as sweet potato yams, an unappreciated delicacy and nourishing vegetable.

In the long run, American industries hurt by global competition will prosper again by helping developing nations attain purchasing power. Thereby, new markets will grow large enough to buy oranges, cars, and widgets from several producers.

The demand for orange juice by Brazilians, for example, would be great enough to drink up all of Brazil’s production -- leaving U.S. production to serve the close-in U.S. market and to compete on an even footing for the European and Asian markets.

Philosophy, and an uncertain future, is small comfort for those industries and workers affected by a global economy. Nonetheless, change is hard upon us. Tariff protection -- or imposition of U.S. costs on foreign competitors -- is wishful thinking. One can sympathize with workers and hard-pressed industries. Yet, nothing can stop the drive of markets to reach equilibrium. Post-war Japan helped itself to the U.S. automobile market through cheap labor and innovation. In the fullness of time, though, workers there demanded and received wages comparable to those in the U.S.

We have the moxy and market to dominate the global economy if we don’t try to hang unto today’s status quo. The best we can strive for is open markets. Then the challenge is compete, diversify or die.

PARTING SHOTS

Ogden Nash has it figured out: “Progress might have been all right once, but it went on too long.”

* * *

A Louisiana board of education has dropped the name of George Washington from an elementary school because the Father Of Our Country was a slave holder.

Apparently forgotten is the fact that Washington not only freed his slaves, he gave his man servant a large tract of land near Cincinnati, Ohio, still owned and inhabited by descendants of the former slave.

Some people may feel it is worthwhile to erase all vestiges of historical slavery supposedly justifying modern victim hood and restitution. Unfortunately, this also wipes out reminders of courage and perseverance by past African-Americans in overcoming discrimination.

By Lindsey Williams, columnist for Sun Coast Media Group newspapers