Events

Congress and Trade Policy

November 17, 2003 // 2:00pm4:00pm

“Where does the power reside between the president and Congress on matters of trade policy?” Congressman Sander Levin (D-Mich.) asked. “It’s clear to me that whereas the Constitution gives Congress the power, today the balance of power is clearly with the executive.” At another point, Levin likened the relationship to a legal partnership, but one in which the president was clearly the “managing partner.”

Levin, who is the top Democrat on the House Ways and Means Trade Subcommittee, added that the creation of a “Congressional Oversight Group” [COG] in the 2002 trade act, which renewed the President’s “fast-track” (now called trade promotion authority), has not made much of a difference. “They usually call the meetings when Members are trying to get out of town,” Levin observed. He did not recommend any changes that might better right the balance between the branches, acknowledging that trade policymaking has become so complex and complicated in modern times that Congress is ill-suited to deal with the issues and prefers to delegate to the executive.

Kent Hughes, Director of the Wilson Center’s Project on America and the Global Economy (PAGE), in summarizing his paper for the seminar comparing the 1988 Omnibus Trade and Competitiveness Act with the 2002 trade act, agreed that the former was a rare instance in which Congress, not the president, actually took the initiative in drafting a trade related bill that also encompassed other issues to improve America’s competitive position. It happened at a time when the country was deeply worried about losing its world economic leadership to the Japanese.

But Hughes also noted that in recent times Congress has gradually been more successful in getting Administrations to consider trade agreements in the context of labor and environmental standards. Hughes warned that things have become much more partisan and polarized in Congress lately, and that could make passing trade agreements much more difficult, as was seen in the 2002 trade bill which squeaked through the House by just one vote.

Thelma J. Askey, Director of the U.S. Trade and Development Agency, questioned efforts to include labor and environmental standards in trade agreements: “There is neither a national nor international consensus on how labor or environment fit into trade policy.” Askey said the new polarization on trade can be traced back to the 1984-1990 period when new issues were put on the table. When Democratic Leader Richard Gephardt (D-Mo.) was running for president in 1984, “he used trade as a core, electoral issue.” There was this construct that somehow U.S. trade agreements “were eroding the U.S. economic situation." Askey said the partisanship on trade “reached a low point in 2002, but also a turning point with the subsequent passage of various trade.” She noted that Bill Clinton ran for office in 1992 opposing “this NAFTA,” [the North American Free Trade Agreement] but then supported it after he became president after elaborate efforts to negotiate side agreements. She said it wasn’t fair to charge that President George W. Bush “has turned his back on the middle way on trade; he’s still trying to find his trade legs. I would appeal to Congressman Levin to give President Bush a little more time to find the middle which is grounded in economic practicality—-how things really work and people really behave.”

New York Times Trade correspondent Elizabeth Becker said she was astounded as a reporter how no one in Congress seemed to connect the most recent farm subsidy bill with possible international repercussions. “It was largely about more food stamps for more farm subsidies.” Agriculture Secretary Ann M. Veneman did question whether the farm bill was in the interest of American agricultural exports. But it wasn’t until Australian Prime Minister John Howard addressed a joint session of Congress and protested the farm subsidies that it hit members what they had done. American farm subsidies are not “a major sticking point in the Miami talks on a Free Trade for the Americas Agreement (FTAA). But why wasn’t this joined earlier in the U.S, especially in the Congress, instead of waiting until it may end up being dictated by the World Trade Organization(WTO)?”

Levin said President Bush’s decisions on steel tariffs and to sign the farm bill are clear indications that the president is letting Karl Rove make trade policy. When asked to speculate on whether the president will roll back the steel tariffs given the WTO ruling that they are contrary to the treaty, two of the panelists speculated that the President would use his visit with Blair to reverse course in the interest of international stability.







 

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