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More trade caution seen with Kerry, more deals under Bush

Reuters | 2 November 2004

More trade caution seen with Kerry, more deals under Bush

WASHINGTON: An election win on Wednesday for Senator John Kerry could make the United States tougher and more cautious on trade, while a victory for President George W Bush would keep the country on the path to more deals, experts say.

While the Massachusetts Democrat backed the North American Free Trade Agreement and other trade pacts in his 20 years in Congress, he has leaned heavily in his campaign toward critics of those deals such as the AFL-CIO labour federation. Kerry and Bush are running neck and neck in the presidential race.

"Kerry has a record of being an internationalist. He voted for the WTO (World Trade Organisation) and free trade agreements. However, he’s in a party that’s divided on this," said Claude Barfield, resident scholar at the American Enterprise Institute, a Washington think tank.

Bush’s team has stressed the need for more deals.

Asked about the growing US trade gap, Commerce Secretary Don Evans said last week: "Eighty per cent of our trade deficit is with countries we do not have a free trade agreement with. And so it sure seems likely to me we need to continue the president’s policy of more free trade agreements."

Since taking office, the administration has negotiated free trade deals with Australia and 11 countries in Latin America, the Middle East and North Africa. Agreements with Colombia, Peru, Ecuador and South Africa are in the pipeline.

"This administration has put a lot of effort into trade agreements with basically a lot of small countries. I think a Kerry administration might be a little more inclined to focus on (finishing) the WTO (world trade talks) and some of the bigger relationships," said Clyde Prestowitz, president of the Economic Strategy Institute.

Kerry’s team says Bush has been eager for new deals but lax on policing - a charge the administration rejects.

"The Bush administration is so focused on signing ceremonies, it’s dropped the ball on enforcement," Kerry trade campaign adviser Lael Brainard said.

Kerry has vowed a 120-day review of US trade deals and wants one recently signed with five Central American nations reopened to toughen stipulations on labour and the environment.

He has also pledged an immediate investigation into "China’s worker rights abuses," which the AFL-CIO alleges give Chinese exporters an unfair trade advantage.

The Bush administration refused earlier this year to launch such a probe, and calls the labour and environmental provisions in its free trade pacts the world’s toughest.

"How far we can get in pushing additional disciplines on labour in agreements with our trading partners is really questionable," said Deputy US Trade Representative Peter Allgeier, a Bush appointee.

Thea Lee, the AFL-CIO’s chief international economist, said Kerry would push harder to persuade Beijing to change a tight currency peg to the dollar that US manufacturers say gives China an unjust trade advantage.

"We think the Bush administration has been remarkably ineffective on that," she said. "I think Kerry would be more aggressive and would be willing maybe to take a case to the WTO."

Frank Vargo, vice-president for international affairs at the National Association of Manufacturers, said he felt there would be fewer pacts in a Kerry administration.

"From my perspective, the more trade agreements the better," Vargo said, adding Kerry’s emphasis on labour and environmental strictures would make new deals harder to reach.

Kerry has never said publicly whether he would renew "trade promotion authority" that facilitates fast passage of trade deals, although Brainard suggested he would. Under the authority, Congress can approve or reject, but not amend, trade deals negotiated by the president.

That legislation, which the Bush administration won in 2002 after a 20-month battle, expires next June unless renewed. Republicans predict another long fight if Kerry seeks changes to please labour.

Lee said Kerry could simply renew the current law and use it to negotiate stronger labour rules.

If elected, Kerry would have to make up his mind quickly on the issue despite his promised 120-day review. The trade promotion law requires the president to tell Congress whether he intends to renew by March 1.

The next administration must also send Congress a report by March 1 on the pros and cons of staying in the World Trade Organisation for a once-every-five-year vote.

 source: Stuff