President Bill Clinton sent Congress a draft bill on September
16, 1997, requesting renewal of fast track authority to negotiate
trade and investment agreements with other countries. The President
needs this authority to complete negotiations in the World Trade
Organization (WTO) and Organization for Economic Cooperation and
Development. Fast track is necessary to negotiate trade agreements
with Chile and other countries in Latin America and Asia. It is
vital for opening markets and "growing" the U.S. economy while
maintaining U.S. leadership throughout the world. The draft bill,
however, would not accomplish these objectives. Instead, by seeking
open-ended authority to establish linkages between trade agreements
and such nontrade issues as labor standards and the environment,
the draft fast track legislation would weaken the U.S. economy and
undermine the global trading system built up over the past 50
years.
Clinton's Draft Bill
The President's draft bill closely tracks the expired Sections
1101, 1102, and 1103 of the Omnibus Trade and Competitiveness Act
granting trade negotiating authority to the President in 1988. It
also seeks, however, to add new negotiating objectives on labor
standards and environmental protection to the act.
The draft adds two new objectives to three overall trade
negotiating objectives of the United States in the 1988 act. The
new objectives aim to foster economic growth, raise living
standards, and promote full employment in the United States while
enhancing the global economy. They address aspects of foreign
government policies and practices regarding labor and the
environment that decrease market opportunities for U.S. exports or
distort U.S. trade. The draft legislation also inserts two new
environmental goals in the section on principal trade negotiating
objectives for the United States. According to the draft, the new
negotiating objectives are to promote "sustainable development" and
to ensure that trade and environmental protection are "mutually
supportive."
Finally, while the draft tracks the exact language of the 1988
act on workers' rights and the WTO, the President is proposing a
new labor standards objective. Specifically, the United States will
seek to establish in the International Labor Organization (ILO) a
mechanism for the systematic examination and accountability of
member governments and how they promote and enforce core labor
standards like freedom of association, the right to organize and
bargain collectively, a prohibition on forced labor and
exploitative child labor, and a prohibition on discrimination in
employment.
Getting Fast Track Right
These new labor and environmental objectives are unacceptable.
The linkage of trade agreements to nontrade issues, says Jagdish
Bhagwati, a professor of economics at Columbia University in New
York, "will weaken the world trading system even as the
administration claims to be strengthening it." The United States is
the world's leading exporter of goods and services. Its total
international trade is equivalent to 23 percent of gross domestic
product. One in five U.S. jobs depends on trade. If the world
trading system is weakened, the U.S. economy will falter. Fast
track negotiating authority is vital for the U.S. economy and for
U.S. global leadership. Moreover, fast track authority is essential
in order to guarantee that the rules of the 21st century's global
trading system would be written by U.S. trade negotiators and
advance U.S. economic interests and national values. President
Clinton's draft bill fails to meet these benchmarks, however. To
bring the draft bill back in line with what the United States
needs, Congress should:
• Tighten the language regarding agreements negotiated
with fast track authority
The draft bill duplicates the language of the 1988 act
allowing the President, once an agreement is negotiated, to submit
implementing legislation to Congress for a single up-or-down vote
in each house. The new legislation involves changes in existing
statutes that are necessary in order to implement such trade
agreements. This language gives the President too much room to put
extraneous provisions in future trade agreements. Instead, the fast
track procedure should apply to implementing legislation that
specifically contains "provisions directly related to the principal
trade negotiating objectives and necessary for the operation or
implementation of the trade agreements."
• Rework the bill's principal negotiating objectives on
the environment
The draft bill opens the door for misusing fast track
authority to negotiate changes in domestic environmental laws and
regulations unrelated to trade. Instead, U.S. trade negotiators
should be restricted to discussing how to prevent countries from
misusing their environmental laws and regulations to protect
domestic companies. Thus, any fast track bill that Congress
considers should incorporate the following new environmental
protection objective: "To prevent countries from misusing their
environmental laws and regulations to protect domestic firms or
disadvantage foreign goods, services, or investment." This language
confirms existing international practice concerning health, safety,
and environmental provisions of trade agreements, which should be
narrowly confined to prevent their misuse for protectionism.
• Eliminate all references to the ILO
The ILO already investigates allegations against countries
that do not adhere to core standards as established in
international agreements, and it publishes its findings. The ILO
has no enforcement powers, however; compliance with its findings is
voluntary. The draft bill would establish, as a principal
negotiating objective for the United States, a "mechanism" in the
ILO that would ensure the "accountability for the extent to which
member governments promote and enforce core labor standards." This
language, if left unchanged, could allow the President to negotiate
agreements under fast track authority and at the same time use
trade sanctions to enforce labor standards. Using trade and
investment sanctions as an enforcement tool is entirely
unacceptable, and therefore should be eliminated.
• Strike the words "sustainable development" from the
legislation
"Sustainable development" is a code phrase for zero-growth
policy. Too often, sustainable development means no growth or
development at all. Yet history shows that whenever there is no
economic growth, the environment is degraded, poverty increases,
democracy withers, and economic freedom vanishes.
Fast track negotiating authority is an extraordinary power that
Congress should approve for the President, who needs it to promote
free trade and open markets around the world. The objective of the
fast track debate should not be one of specifying what will be in
every trade agreement the United States will negotiate during the
next five or ten years. Rather, it should establish only that such
nontrade issues as labor standards, the environment, and other
social issues are not appropriate for inclusion in trade
agreements. The United States needs a "clean" fast track bill that
ensures the President's negotiating authority is strictly related
to U.S. trade and investment liberalization objectives. This will
prevent many from pressing the Administration to sign trade
agreements that would satisfy liberal and protectionist
constituencies.