What the Administration Can Do To Make Up for the Loss of Fast Track

The Clinton administration's failure to gain fast-track negotiating authority was a sharp setback for United States-Latin America relations. Trade and investment have become the cornerstones of Western Hemisphere cooperation.

They are main concerns of almost every Latin American and Caribbean country in its relationship with the US, and are first-order priorities for the US and Canada as well. As preparations proceed for the April summit meeting of the hemisphere's heads of state in Santiago, Chile, the credibility of the US - both as a leader of and a potential partner in regional integration efforts - has diminished.

But there's much that can be done to make up for the loss of fast track. Indeed, the extent of the damage to US relations with Latin America will be mainly determined by the White House's response to this failure in the coming months. Doing nothing would cause the most harm; it would be widely interpreted as a lack of any substantial US interest in the region.

What is most important is that President Clinton go all out to get Congress to vote on fast track next spring, prior to the Santiago summit, and immediately begin to organize his administration to win it.

The conventional wisdom - in Latin America as well as the US - is that the failure this time was mainly due to the administration's long delay in launching its campaign for fast track. Starting now would signal that the president is determined to prevail.

The White House should set up a special fast-track office and recruit someone with energy and clout to head it - for example, Lloyd Bentsen, who played such a key role in the fight for NAFTA. The office should have a small, first-class staff, who know the trade issues and their way around Congress. Getting Congress to approve fast track should be their only responsibility in the near future.

Republican supporters, who must be held together, may not be willing to accept any change in the legislative language, but that should be tested. There may be some modest room for compromise. President Clinton, meanwhile, should engage members of his own party in serious exchange on the significance of fast track and what it will take to pass it. Almost certainly, the White House will have to develop - in coordination with both Republicans and Democrats - a thoughtful and comprehensive package of assistance for workers and communities affected by plant closings.

Administration should proceed, regardless

Even with this kind of effort, fast track may fail again. If that happens, there is still no reason for the administration to abandon its commitment to regional free trade and economic integration. That would only multiply the damage. Instead, the White House should proceed with three initiatives.

First, it should continue to press for the launching of negotiations for the Free Trade Area of the Americas (FTAA) at the summit in Santiago. This is vital for the success of the summit and an important step toward a commercially and economically integrated hemisphere. Most other hemispheric governments (including Brazil) want to move forward in this way.

Even in the absence of fast track, progress can be made toward the FTAA, although some crucial decisions will have to be postponed. Starting FTAA negotiations in April, even on a limited basis, would help to sustain the vision of a free inter-American trade.

Second, independent of fast track or trade negotiations, the US should initiate systematic consultations with the countries of Latin American and the Caribbean about labor and environmental standards. The administration should vigorously explore how hemispheric governments can cooperate on these issues, seeking to determine what kinds of regional agreements on labor and environmental norms could be achieved - and whether and how they could be monitored and enforced. Progress on these issues outside of trade negotiations might help to moderate demands that they be included within trade pacts.

Paying attention to the Caribbean Basin

Third, the administration should do all it can to gain passage of the Caribbean Basin Initiative enhancement legislation, and consider moving forward with a full free-trade arrangement with Central America (as the countries of that region have asked). This attention to the Caribbean Basin, though not as powerful a symbol as fast-track authority, would be seen as a gesture of continuing US commitment to free trade in the hemisphere. Also, it's economically important for the nations of that region, which are suffering a NAFTA-induced diversion of trade and investment toward Mexico and a decline in US assistance.

Fourth, the US should stand ready to work with international institutions and other governments in developing an appropriate package of assistance should Brazil or other Latin American nations face an economic emergency because of the global financial turbulence originating in East Asia. Such assistance to Mexico three years ago was critical to that country's rapid and robust recovery.

Trade and investment must be at the center of US policy toward Latin America and the Caribbean. They have to be the basic elements in any US strategy for building productive and enduring relations with the region.

* Peter Hakim is president of the Inter-American Dialogue and a regular contributor to the Monitor.