Trading in terror
WASHINGTON — "We will defeat [the terrorists] by expanding and encouraging world trade," President Bush declared to cheering California business leaders on Oct. 17.
As the World Trade Organization gears up for meetings later this week, the White House is hard at work linking the war on terrorism to its push for free trade. In particular, the administration is moving on its longstanding request for Congress to approve presidential trade-promotion authority (formerly known as "fast track"), which allows the president to negotiate trade agreements that legislators can approve or reject but not amend.
Many officials echo Mr. Bush. Trade "promotes the values at the heart of this protracted struggle," asserted US Trade Representative Robert Zoellick in a Sept. 20 Washington Post op-ed. Secretary of State Colin Powell argued recently that trade-promotion authority represents "an essential part of our diplomatic tool kit" in America's new war.
Such arguments have prompted a predictable backlash. Mark Weisbrot of the liberal Center for Economic and Policy Research denounced administration officials for "wrapping themselves in the flag" in order to push fast track through Congress, while Sen. Ernest Hollings (D) of South Carolina accused Mr. Zoellick of taking "partisan advantage of a national tragedy."
But these criticisms overlook a more troubling point. Sure, the White House melds principle with opportunism when it uses the war on terrorism to advance its trade agenda. (The Clinton White House probably would have done the same.) But by reducing trade openness to simply another weapon in its antiterrorist arsenal, the Bush administration actually undermines the real case for free trade and threatens the future trade agenda.
The benefits of international trade accrue over the long term, in the form of lower prices for consumers, greater specialization, and, eventually, higher incomes for the countries involved. That is the best - no, only - argument for free trade. (Trust me, Osama bin Laden loses little sleep worrying that Congress might grant Bush fast track.)
If free trade is now cast as a weapon against terror, what happens to support for trade when the United States is at peace, with no coalition to sustain and no threat to counter? It loses urgency.
We've been here before. In 1993, the Clinton administration hyped the short-term benefits of the North American Free Trade Agreement, particularly regarding job creation, and even suggested NAFTA would promote world peace. Later, when Mexico suffered a major financial crisis in 1995 and NAFTA didn't deliver on the hype, the larger trade agenda suffered. President Clinton lost fast-track authority. He failed to make progress on expanding NAFTA to Chile. And he presided over the botched 1999 WTO meeting in Seattle. By overselling trade today, the Bush administration may be setting itself up for similar disappointments, even if it wins trade-promotion authority.
This conflation of trade with geopolitics also distorts free trade's nondiscriminatory nature. Because of the war on terrorism, certain "strategic" nations will likely receive priority treatment on trade - for political, not economic, reasons. The US-Jordan Free Trade Agreement, completed shortly after Sept. 11, is an example. Zoellick hailed the accord as "our first such commitment in the Arab world," while Democratic Sen. Max Baucus explicitly linked the agreement to the war on terrorism.
If the White House truly wants to promote international trade, it should stop fostering unrealistic expectations about what trade can accomplish, and resist linking trade to narrow and shifting geopolitical concerns. Unfortunately, this "fight terror with trade" mantra smacks of an unwillingness - or worse yet, an inability - to make the case for trade on its own merits.
Carlos Lozada is the associate editor of Foreign Policy Magazine.