In coming trade talks, a battle of competing interests
An ambition of the Bush administration is to launch another round of world trade negotiations in November. But officials don't know what to call it.
The last round of trade liberalization was launched 15 years ago in Uruguay. So it was named the Uruguay Round. The one before that was the Tokyo Round.
But the next round, if it gets off the ground, will get its start in Doha, Qatar. The tiny nation's name is pronounced "gutter."
"[A name] may be important in terms of selling things," says Harald Malmgren, a veteran Washington trade consultant. The idea of another massive and lengthy multilateral effort to lower tariffs and, even more important and difficult, other barriers to trade and investment, has to be sold to the political and business establishments in the US.
Mr. Malmgren recalls when France, unhappy with the idea of another liberalizing trade pact, tried to name what became the Tokyo Round the Nixon Round. President Nixon was then in Watergate trouble.
President Clinton attempted to launch a new round at the ministerial meeting of the 142-nation World Trade Organization (WTO) in Seattle in 1999, a meeting now famous for the mass demonstrations of those opposed to globalization.
In Malmgren's view, it wasn't so much the protests that caused failure. It was inadequate preparations.
The next ministerial meeting in November in Qatar, a peninsular nation in the Persian Gulf, will not be easily accessible by demonstrators. But prospects for success at Doha are still less than 50 percent, reckons Malmgren, who helped negotiate the Kennedy Round decades ago.
"It could be done," he says. "But it's precarious."
Mary Irace, a vice president of the National Foreign Trade Council in Washington, sounds more hopeful that an agenda can be agreed upon.
"I'm optimistic," she says. "But lot of work has to be done to narrow the differences and find a consensus."
The NFTC, backed by some 500 mostly large corporations, recommends that tariffs on industrial goods be reduced to zero. And it wants the reduction or elimination of other market-access barriers to farm goods and other services.
That will not come easy.
One difficulty is the need of the Bush administration to persuade 40 or 50 Democratic representatives to break ranks with their party and vote for legislation granting "trade promotion authority" (TPA). This enables the president to negotiate trade treaties that could not be amended by Congress, but only approved or rejected by a yes or no vote.
Malmgren, who negotiated with two senators the first such "fast track" legislation in 1974, doubts other nations will agree to a new round without such authority. They fear Congress would shred an unprotected deal to satisfy those American interests that fear harm.
TPA is opposed by the AFL-CIO and others groups against globalization unless it includes a firm requirement that any trade deal provide some assurances that labor and environmental standards will be safeguarded.
Should the TPA bill specify that nations violating labor safeguards be subject to enforceable sanctions, the prospects of another round could fade, Malmgren figures. Many developing nations see cheap labor as a big asset in producing export goods.
The language will have to be "sufficiently ambiguous" to win over these nations, he says.
Robert Zoelick, the US trade representative, was last week in India, a key country, seeking its support for another trade round.
Late last month, Republican leaders in the House postponed consideration of TPA until the fall. They were short of votes.
Malmgren says President Bush will have to get heavily involved to win passage of TPA. He recalls how Lyndon Johnson in 1967-68 mobilized top business executives to help push trade legislation, calling some of them every week.
But rounding up business support is even tougher today. The subsidiaries of many US multinational companies are now behind foreign-trade barriers. The barriers may well protect their firms.
Moreover, some companies with cutting-edge technologies consider themselves mostly immune from foreign competition. A trade deal is of little interest.
Even American agriculture is divided on trade. Soybean, wheat, and corn farmers are keen to open up foreign markets. But growers of potatoes, chickens, strawberries, flowers, cotton, and some other farm products are not pleased with foreign competition.
Should Qatar not end up in the gutter, negotiations that follow could last years. At best a deal would be ready for congressional approval in 2005, more likely 2007 or even later. Bush could be gone from the White House.