Trade accords become a U.S. foreign policy tool

By Paul Blustein
Washington Post
29 April 2003

Pact With War Supporter Singapore Gets Expedited, but Deal With Opponent Chile Is Delayed

Here’s a benefit a country gets for supporting the U.S.-led war in Iraq: Its trade agreement with Washington moves ahead lickety-split. And here’s a drawback a country suffers for opposing the war: Its trade deal gets stalled.

That is what is happening with Singapore and Chile. Both countries shook hands with Bush administration negotiators around the same time late last year to establish free-trade accords with the United States. But while Singapore backed Operation Iraqi Freedom, Chile demurred.

For students of diplomacy as practiced by the Bush White House, the disparity in timing the two trade pacts are experiencing should come as no surprise.

President Bush is scheduled to take part next week in a ceremony in which the U.S.-Singapore free-trade agreement is signed, with Prime Minister Goh Chok Tong getting the red-carpet treatment. Once signed, the accord will be submitted to Congress for approval. But no date has been set for signing Chile’s free-trade deal, even though the negotiations for it were completed before Singapore’s.

One of the official explanations of the delay — which draws hoots of derision from trade experts — is that translations of legalese into Spanish, and back into English take time. More candidly, U.S. Trade Representative Robert B. Zoellick told reporters recently that “people are disappointed” in Chile for having opposed the U.S. stance during debates in the U.N. Security Council.

“We hoped for their support in a time that we felt was very important,” Zoellick said, adding, “I have no doubt that ultimately we’ll proceed” with the U.S.-Chile agreement because “it’s good for both countries.” His deputy, Peter Allgeier, noted in a separate appearance: “We simply follow the direction of the State Department and the National Security Council” on such matters, because they set foreign policy.

The administration’s use of the pacts to reward and punish countries for their foreign policy positions is drawing sharp criticism from business groups, trade experts and some members of Congress. They contend that the White House is endangering its effort to persuade countries to lower trade barriers, especially its efforts to strike a deal that would expand the North American Free Trade Agreement beyond Mexico to the rest of Latin America.

“If it looks like we’re backing away from negotiated commitments with one of our staunchest and most supportive trading partners, it will give pause to other countries in the hemisphere,” said Jeffrey Schott, a scholar at the Institute for International Economics. “They’ll say, ‘Maybe we shouldn’t be so forthcoming in negotiating with [the United States] because they’ll back away and leave us hanging high and dry.’ ”

A group of eight pro-trade Democratic senators and congressmen has sent Bush a letter warning that holding up the Chile agreement “would undermine our longer-term objectives by announcing to the world the U.S. is not serious about steering the global economy back onto the path of greater integration and truly free markets.”

Business lobbyists are fuming, too. The trade representative’s office was made separate from the State Department decades ago because of the need to keep trade from being used as a chit in foreign policy, said Calman Cohen, head of the Emergency Committee on American Trade, an organization of multinational firms.Yesterday, Secretary of State Colin L. Powell hinted that the administration’s freeze on Chile might be nearing an end, speaking warmly of the U.S.-Chile trade accord during a speech. Chilean Foreign Minister Soledad Alvear, who was in the audience, said in an interview, “we have no indication when it will be signed,” but she added that she remains hopeful it will be before the U.S. electoral season begins to distract Congress.

Another recent administration trade decision that has aroused suspicion of foreign policy influence came Friday evening when the White House announced its rejection of a recommendation to slap tariffs on wire hangers made in China. The administration is hoping that Beijing will play a crucial role in defusing the crisis over North Korea’s nuclear weapons program.

Although the action involves a tiny market, the decision has potentially major importance as a precedent. Trade experts said it may signal that the administration is unlikely to approve other requests for tariffs on Chinese products that some U.S. industries are hoping to obtain under a new legal provision to guard against “surges” of Chinese imports.

White House spokeswoman Claire Buchan said the decision was made strictly on economic, not foreign policy grounds. But Fred Waite, a lawyer who represented the U.S. hanger companies, noted that the U.S. International Trade Commission, an independent body, recommended the tariffs.

“Exercising a little gallows humor, I suppose if this had gone to the White House the week our surveillance aircraft was forced down, we might have seen a different result,” Waite said.