The White House decision last week to postpone legislation for "fast track" trade negotiations has thrown a monkey wrench into plans for creating a hemisphere-wide free-trade zone by 2005. Few US actions could have been more disappointing to Western Hemisphere governments, nearly all of which seek closer and more secure commercial relations with the United States. The decision, ironically, comes on the heels of President Clinton's extremely successful first trip to Mexico, Central America, and the Caribbean.
Fast track is a simple and powerful concept. Once approved, it grants the president and his advisers authority to negotiate trade pacts that Congress can approve or reject - but cannot amend. This no-amendment procedure facilitates agreement, because the US and other governments know that they will not have to renegotiate trade accords point by point with a US Congress riddled with special interests. Fast track is essential for serious trade negotiations.
Without fast-track authority, US leadership on inter-American trade issues has eroded over the past several years. Washington has been unable to fulfill its most important pledge to Latin American and Caribbean governments at the December 1994 Summit of the Americas in Miami - to negotiate the entry of Chile into NAFTA. Our two NAFTA partners, Mexico and Canada, have established free-trade relations with that country on their own, while the US fails to act.
Moreover, US immobility on Chile, Latin America's most successful economic performer, raises doubts throughout the region about the strength of Washington's declared commitment to hemispheric free trade generally. And US credibility has been further weakened by the administration's failure to enhance US trade links with the countries of the Caribbean Basin, which are watching trade and investment flows move to Mexico because of NAFTA.
Not too late to reconsider
Although it does not sound so bad, waiting three months until September to request fast-track authority, as the administration now says it will do, risks losing the opportunity for some time to come. The politics in the fall will not be any better than they are today. The legislative calendar will be full, so that action may well be delayed into 1998, an election year when Congress will be tempted to avoid controversial issues. Soon after we will be pushing toward the next presidential elections. We may miss our best chance ever for enduring and productive economic ties with Latin America and the Caribbean.
It is not too late for the White House to reconsider, and send a fast-track proposal to Congress this summer. Administration officials, after all, have been consulting widely on trade issues with Republican and Democratic members over the past several months and know the terrain well. It should not take much for them to come up with a bill. If they do not, free-trade proponents in Congress should take the initiative to get fast-track legislation on the docket - and force the administration's hand. Indeed, a bipartisan Senate coalition is already being formed to do just that.
Of pledges and profits
The administration needs fast track not merely to fulfill its pledges to other hemispheric governments - or to be a good neighbor. The United States has real economic interests at stake. Latin America absorbs only 14 percent of US exports, but the region is now the fastest-growing market for North American products - because it is attracting large-scale flows of international capital, because the nations of the region are increasing their emphasis on trade, and because 40 to 50 cents of every dollar that Latin America spends on imports goes to US companies. If current trends continue, by the turn of the century Latin America will be a larger consumer of US imports than Europe and Japan combined. Further, Latin American and Caribbean cooperation on many other fronts - the defense of democracy and human rights, antidrugs initiatives, environmental protection, collaboration in international forums - depends on stronger trade ties, the region's first priority in its relations with the United States.
President Clinton has good political reasons for wanting to postpone a debate over fast-track legislation. It will, for one thing, be opposed by labor and other important Democratic constituencies as well as by a majority of Democrats in Congress, whose votes he needs on other crucial issues - like trade relations with China. And there is no guarantee that the legislation will be approved, even if it is supported by the Republican leadership. Yet the president will probably triumph if he makes this a central priority - as he did in the case of NAFTA nearly four years ago.
By deferring action on fast track, the administration allows Latin American and Caribbean policy to be made by default. Everyone loses that way.
* Peter Hakim is president of the Inter-American Dialogue in Washington.