The Story Behind Fast Track

This week, President Clinton presents legislation asking Congress for “fast-track” authority. Under such authority, the President can negotiate sectoral, bilateral, regional, or multilateral trade agreements. Congress then can veto or approve such agreements, but can not amend them. This delegation of authority is not new to the trade policy-making process. In 1934, Congress granted President Roosevelt the authority to reduce trade barriers in bilateral negotiations. Some 40 years later, Congress introduced fast-track procedures to facilitate multilateral trade negotiations.

Many reporters have described the fast track debate as a “battle,” focusing on the strange “alliances,” the “battle lines” and the “fronts” where the debate over fast track will be waged. For example, they have emphasized the fissure between “New Democrats,” such as President Clinton and Vice President Al Gore, and their Democratic party’s traditional labor and environmental constituencies, represented by Sen. Tom Daschle, D-S.D., and Rep. Richard Gephardt, D-Mo.

The metaphor of war may be dramatic, but it is inappropriate. After all, the legislation authorizes American participation in trade negotiations. Americans trade because they believe they will benefit from exchanging goods and services for dollars and vice versa. Moreover, by focusing on this metaphor, the press (and by extension the public) miss the real story.

The United States must participate in developing new trade agreements at the sectoral, bilateral, regional and multilateral level. These trade agreements provide rules governing not only how nations trade, but how policy-makers can protect their workers, citizens, consumers, and proprietors. Thus, what Congress is really debating is whether the United States will play a role in designing the future rules and institutions governing trade.

Proponents and opponents alike have not focused on this more complex story. To some degree, this is understandable—it does not fit in a sound bite or a headline. Proponents have focused on what they see as the obvious macroeconomic benefit to the economy as a whole.

They also focus on the negative: they don’t want the United States to miss out on expanding markets or jobs created from exporting. Opponents simply focus on the negative. For example, some declaim that trade agreements mean environmental degradation or jobs lost—that great sucking sound. They think all Americans, whether highly educated or high school educated will lose their jobs to lower-compensated foreign competition, because capital, technology, and skills are global. Thus, they argue, fast track dooms all Americans to the wrong side of the tracks.

This view is wrong. Fast-track authority gives Americans the opportunity to make the world trading system better. It authorizes the president to find a new role for government at the national and international level that balances democracy and capitalism, equity and efficiency. It is consistent with the evolution of American democracy—we Americans have always adapted our political institutions to meet the challenges of economic and technological change.

The Progressive era illustrates this process. In the late 19th century, a growing number of Americans, including business leaders, called on the government to regulate the excesses of big business like monopoly pricing that operated across state lines. These Americans understood that government had an important role in maintaining economic confidence and stability.

The task for Americans today is equally complex. We must find ways to govern global corporations operating across national lines. Such rules will assist companies, establish clear rules across borders and expand opportunities for workers as well as investors.

The global trading system is a work in progress. For example, most trade agreements do not include rules governing how workers are treated, i.e., labor standards, except to ban trade in products made by slave labor.

Although the GATT system includes product standards, there are no process standards governing how goods are made. There are no rules governing foreign investment, competition policies and distribution policies. Moreover, most trade agreements are not as transparent as domestic regulations.

These deficiencies should be inspiration to improve the rules governing trade. But the rules can not be improved without granting the president authority to make the rules governing trade more effective, equitable, and transparent.