End of the road for Bush’s fast-track policy

End of the road for Bush’s fast-track policy
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First Published: Fri, Jun 29 2007. 02 01 AM IST
Updated: Fri, Jun 29 2007. 02 01 AM IST
The looming end of the US president’s special trade negotiating authority on Saturday highlights the political shift in Washington and a waning US appetite for free trade in the face of a burgeoning trade deficit.
Nearly five years ago, when President George W. Bush signed the Trade Promotion Authority (TPA) into law, globalization was touted by the Republicans as the miracle that lifts economies around the world, including the lot of the poorest.
TPA, previously known as “fast-track” authority, gave Bush the power to negotiate trade agreements which only can be approved or rejected by Congress, but not amended. This was seen as crucial to ratification of most deals.
Bush won a two-year extension in 2005 as US trade negotiators argued they needed the precision tool to advance the World Trade Organization’s Doha Round of global trade negotiations.
But the Republicans enjoyed control of the White House and Congress only until January, when opposition Democrats were swept into power in the legislature on a backlash against Bush and the Iraq war.
Today, with a ballooning multibillion-dollar trade gap with China threatening the US financial position and blamed for the loss of thousands of US manufacturing jobs, the Bush administration’s free-trade mantra is sounding sour to some. Democrats are chomping at the chance to reclaim Congress’ constitutional authority in trade negotiations, brushing off US Trade Representative (USTR) Susan Schwab’s call for an extension of Bush’s TPA powers, which expire on 30 June.
“The trade deals ushered through by President Bush’s fast-track authority have had a devastating effect on American workers and businesses,” said Phil Hare, a member of the US House of Representatives.
“The expiration of President Bush’s fast-track authority is by no means a cure for the unfair trade agreements that have passed or the ones we will soon consider,” the Illinois Democrat said in a statement.
Meanwhile, a group of Democratic law makers and national business, labour and advocacy groups said it planned to unveil Thursday “a new direction for trade” in a post-TPA era.
The coalition said its top priorities include addressing currency manipulation, the failures of the North American Free Trade Agreement trade model, food and product safety and national security review of trade deals.
Despite Bush’s “fast-track” authority, the US has made little headway in advancing the lumbering Doha Round launched in the Qatari capital in 2001 with a key aim of lowering global trade barriers to promote development.
US trade chief Schwab insists that Washington will continue to push for progress in the talks despite the collapse last week of an effort by the Group of Four—the US, European Union, India and Brazil—to get them back on track.
“Trade negotiations and trade politics are very complex, particularly in a democracy,” Schwab acknowledged Wednesday at the annual meeting of the US-India Business Council in Washington. sked Tuesday about the looming TPA expiration, Schwab said, “It would be easier with TPA. It is more practical if trade promotion authority exists.”
Many mainstream economists argue that globalization and free trade are key to economic well-being, although they admit some people are adversely affected as trade barriers fall. “Our willingness to trade freely with the world is indeed an essential source of our prosperity—and I think it is safe to say that the importance of trade for us will continue to grow,” Federal Reserve chairman Ben Bernanke said recently.
“In the long run, economic isolationism and retreat from international competition would inexorably lead to lower productivity for US firms and lower living standards for US consumers,” Bernanke had said last month.
Outside the US, trade and globalization “are lifting hundreds of millions of people out of poverty, especially in Asia, but also in parts of Africa and Latin America,” he said.
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First Published: Fri, Jun 29 2007. 02 01 AM IST