Politics, war, likely to slow trade talk

Since the US Senate is unlikely to approve any global trade deal that does not win farm-trade concessions from Europe and other nations, prospects for a successful round do not appear great.

In the meantime, both the US and the European Community are pushing for smaller trade deals with individual nations or regions - sort of "coalitions of the willing," as Mr. Malmgren puts it.

The risk in this is that the world could end up divided into trading blocs centered around the US or Europe, rather than a universal trading system fair to all nations.

US Trade Representative Robert Zoellick has been energetically negotiating smaller trade deals, mostly started under President Clinton.

"It is improvisational," says Malmgren. "He is exploring wherever there is a possibility to achieve something."

Last month, the administration reached a trade deal with Singapore, a month earlier with Chile. These have a good chance of winning approval in Congress if its key committees, the House Ways and Means Committee and the Senate Finance Committee, can set aside enough time from two priorities: a tax-cut measure and making prescription drugs available under the Medicare system.

Another trade possibility is a deal with Australia. Prime Minister John Howard is giving Bush strong support on Iraq. But opening up the US market to Australian beef, lamb, wool, and sugar may hit political snags from the congressional representatives of the Rocky Mountain states.

Two weeks ago the administration offered to eliminate tariffs and trade barriers in a Free Trade Area of the Americas, with 34 countries and 800 million people involved.

The talks will be difficult. For one thing, Brazil in a year or two will become the world's largest grower of soybeans. American soybean farmers will not relish that competition. Nor will more Brazilian orange juice be welcomed by Florida growers.

But the European Community already has a trade deal with Mercosur, a trade alliance of Brazil, Argentina, Paraguay, and Uruguay, with Bolivia and Chile as associate members.

Perhaps the US will find it easier to reach a deal with five Central American nations. Negotiators hope to have an agreement by year's end.

Another prospect is a trade deal with Morocco. In Washington, it is called the "Baker FTA" - or free trade agreement - because it is being pushed by James Baker, the Texas lawyer prominent in the Florida election fight and in the first Bush presidency. Such a deal would have the advantage of demonstrating friendliness with a Muslim country.

Mr. Zoellick is also hoping for a deal by the end of this year with the Southern Africa Customs Union, made up of South Africa, Botswana, Lesotho, Namibia, and Swaziland.

To Zoellick, the host of small trade deals are stepping stones to global liberalization of trade. But he is not considered part of the Bush inner circle where politics often overrule trade issues, as with high steel tariffs.

At the moment, the Bush administration faces worldwide demonstrations against its threats to Iraq. If world trade talks get somewhere, similar massive antiglobalization scenes could trouble a second Bush term.

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