Washington Outlook
Edited by Paula Dwyer
Business Winces As Bush Fumbles on Trade
George W. Bush never spent much time on the campaign trail defining his goals on international trade, and Democrats were content to avoid the subject as well. But the omission has come back to haunt him. As Bush faces his first major appearance on the international stage--a hemispheric trade summit on Apr. 20 in Quebec City--he has yet to settle on even the outlines of a free-trade strategy.
In one telling lapse, when King Abdullah visits in early April, Bush will be unable to present him with a copy of the completed free-trade agreement that the Clinton Administration negotiated with Jordan last year. Turns out Bush's trade officials neglected to submit it for congressional approval in time.
Even worse for the President's Quebec City debut, he has yet to ask Congress to renew his authority to negotiate free-trade deals. The absence of that authority, which lapsed in 1994, has been repeatedly cited by Brazil as a reason to slow down talks over the Free Trade Area of the Americas (FTAA), an ambitious plan to fashion a 34-nation free-trade zone from the Arctic to Tierra del Fuego. Bush had high hopes of arriving in Quebec with a congressional mandate for trade expansion firmly in hand. And he had intended to push up the timetable for completing the FTAA deal by two years, from 2005 to 2003, to seal it during his term. Now, the President will likely abandon that effort.
TOO MANY COOKS? Part of Bush's problem is organizational. U.S. Trade Representative Robert B. Zoellick was the last Cabinet member to be confirmed--and only after narrowly winning a White House debate over whether to strip his office of Cabinet rank. Then policymaking authority was divided among the National Security Council, the trade representative, and the Commerce Dept. That led to a tug-of-war over Zoellick's chief deputy, veteran trade negotiator Peter Allgeier. Zoellick eventually won back Allgeier from the NSC to head the FTAA effort, but relations are strained.
Another problem: internal disarray over who's running the store. In March, Zoellick accused National Security Adviser Condoleezza Rice and the State Dept. of undermining his trade strategy. Zoellick wanted to submit to Congress Clinton trade deals with Vietnam and Jordan, along with a request for authority to negotiate agreements that Congress can approve but not amend. But the striped-pants set rejected the package deal for fear that the popular Jordan and Vietnam agreements would sink along with the controversial fast-track authority.
HILL FIGHT. Zoellick isn't getting much help from Hill Republicans either. They remain undecided on a key Democratic demand that any grant of trade-negotiating authority incorporate protections of labor rights and the environment. Such prescriptions, spelled out in the Jordan agreement, prevent either nation from relaxing labor and environmental laws to gain an export edge or attract foreign investment. Calling the Democrats' demands on labor and the environment "background noise," House Majority Leader Richard K. Armey (R-Tex.) told a business group on Mar. 27 that Republicans have the votes to strip the rules out, "and we ought to just do it." But Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) disagrees. "The practical aspects are [that] we won't have a deal unless we deal with [labor and the environment]," he says.
Bush and Zoellick eventually could build momentum for trade liberalization. But business groups that had high hopes for the FTAA are disappointed by the confusion within the Administration. For once, they note, it's the Democrats standing firmly together on trade while the Republicans dither.
By Paul Magnusson
Social Security Divide
The White House and congressional Republicans agree on the need for private Social Security investment accounts. But they can't agree on the composition of a commission designed to rubber-stamp that recommendation. Hill GOP leaders would like a panel made up mainly of lawmakers, arguing that it would have the best chance of crafting a proposal that could pass Congress. But Bush wants a panel of business and financial execs--and few, if any, members of Congress.
Bush Taps Defense Inc. Again
After picking industry execs as his leading candidates to head the Navy and Air Force, President Bush is following the same pattern for the Army. His expected choice: Enron Corp. executive and retired Brigadier General Thomas E. White Jr. White is expected to be a strong proponent of outsourcing such services as electricity delivery--which could benefit his former company. Enron won a $25 million contract in 1999 to provide power and water to New York's Fort Hamilton.
A Rebuke from Enron's Boss
Ever since the President backed away from action to prevent global warming, greens have wondered what Enron Chairman Kenneth L. Lay, a pal of George W. and a backer of anti-global warming measures, thought of the decision. Well, at an Apr. 4 Toronto Board of Trade meeting, a questioner put Lay on the spot. Visibly uncomfortable, according to one participant, Lay responded that the Administration team went too far--and that he has already let them know it.
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Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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