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Zoellick plies a new trade

Asia Times, Hong Kong

14 January 2005

Zoellick plies a new trade

By Tom Barry

To what degree do neo-conservatives and militarists control US foreign policy? And how much influence do the less ideological figures such as National Security Adviser Condoleezza Rice have over President George W Bush?

Those were the questions continually debated by foreign-policy observers during the last three years of the first Bush administration. And at the onset of Bush’s second term, assessing the new ideological-realist balance in the foreign policy team is the main topic of Washington’s foreign-policy community.

The president’s nomination of Condoleezza Rice as secretary of state and her selection of Robert Zoellick as her top deputy indicate that the ultra-hawks and neo-con foreign-policy revolutionaries won’t completely dominate the second administration. Neither Rice nor Zoellick, who served as the US Trade Representative (USTR) during the first administration, is an ideologue. But neither are they moderate conservatives. Only when compared to such figures as Pentagon chief Donald Rumsfeld and his deputies, such as Paul Wolfowitz, Stephen Cambone, and Douglas Feith, could they be considered moderates.

Both Rice and Zoellick are non-ideological foreign-policy operatives who are not idealists or true believers. Rather, they are realists who accept the neo-conservative premise of US global supremacy but want to manage that power wisely to further their notions of US national security and interests. At first glance, Zoellick could be mistaken for an ideologue, as an evangelist for free trade and a member of the neo-conservative vanguard. But when his political trajectory is more closely observed, Zoellick is better understood as a "can-do" member of the Republican foreign-policy elite - a diplomat who always keeps his eye on the prize, namely the interests of Corporate America and US global hegemony. Based on his record in the administration of president George H W Bush and the current Bush presidency, Zoellick is highly regarded as an astute deal-maker.

Rice’s surprise selection of Zoellick was greeted with an almost palpable sense of relief inside Washington’s foreign-policy circles. The great fear, outside the neo-conservative and militarist camps, was that Vice President Richard Cheney and company would insist that the shrill unilateralist John Bolton, current under secretary for arms control, serve as Rice’s deputy.

Zoellick’s track record

Robert Zoellick, who enjoys long-distance running, has a long track record in the economic policy and diplomatic affairs of Republican administrations since the late 1980s. During the second administration of president Ronald Reagan, Zoellick, who began his career as a Harvard-educated lawyer, served as a special assistant at the Treasury Department. During the Bush Sr administration, Zoellick became a key figure shaping post-Cold War economic policy as a senior officer in both the Treasury and State departments and a personal adviser to the elder Bush.

While serving in the Bush Sr administration, Zoellick was instrumental in sealing the NAFTA (North American Free Trade Agreement) accord with Mexico. When the negotiations hit a rough spot, Zoellick served as a special assistant to Bush in his relations with then-Mexican president Carlos Salinas de Gortari and managed to jump-start the stalled negotiations. As an indicator of the degree that US foreign policy in the 1990s increasingly became focused on global economic policy, Zoellick, while serving as a counselor at the State Department and under secretary of state for economics, played a key role in launching the Asia Pacific Economic Cooperation forum. In recognition for this achievement, Zoellick received the Distinguished Service Award, the State Department’s highest honor.

Zoellick shuttled all over the world during the Bush Sr administration to promote US global economic policy. Before the founding of the World Trade Organization, Zoellick was the Bush administration’s top negotiator with the European Union at a time when the Uruguay Round of multilateral trade negotiations was blocked by US-European differences over agricultural trade liberalization. He helped break the logjam by forging the Blair House Accord, which helped save the foundering Uruguay Round. Among other functions in his role as the roving ambassador for the United States’ free-trade agenda, Zoellick was the administration’s "sherpa" at the Group of Seven summits in 1991 and 1992.

His reputation of being an Atlanticist was secured during the Bush Sr administration when he persuaded the US government to support the reunification of West and East Germany. According to the New York Times, "He is most widely remembered in foreign-policy circles for being the United States’ representative at the multiparty negotiation over the future of divided Germany. He persuaded the Bush administration to embrace German unity despite the qualms of allies and alarm in the former Soviet Union."

Zoellick is highly respected on Wall Street and by Corporate America at large. Not only a highly effective government representative of US capital, Zoellick has benefited from direct personal ties with the US financial community and transnational corporations. He has directly worked in the highest echelons of the US corporate community, including serving as an executive at Goldman Sachs. Before joining the Bush Jr administration as a cabinet official in the capacity of the US trade representative, Zoellick served on an advisory council at Enron Corporation. In addition, Zoellick also served on the boards of such corporations as Alliance Capital, Jones Intercable, Said Holdings, and the Precursor Group.

A protege of James Baker, who served as treasury secretary during the Reagan administration and secretary of state during the Bush Sr administration, Zoellick has close ties to the Bush family. He was an adviser to George W Bush when he was governor of Texas and served as a foreign-policy adviser to presidential candidate Bush.

A new Republican foreign policy

Zoellick’s essay in Foreign Affairs in January 2000 titled "Campaign 2000: A Republican Foreign Policy" highlighted Zoellick’s grasp of the radical new foreign-policy directions that would come with a Bush Jr administration. Zoellick faulted the administration of president Bill Clinton for focusing too narrowly on economic policy and for promoting social and environmental clauses within free trade organizations, as Clinton did at the outset of the World Trade Organization (WTO) ministerial in Seattle. He spelled out a new foreign policy that would be based on the preeminence of military power - a concept of a new American century in which unquestioned US military superiority would allow the United States to shape international order.

Zoellick was perhaps the first associate of Bush Jr to introduce the concept of "evil" into the construct of Bush’s radical overhaul of US grand strategy. A year before Bush was inaugurated, Zoellick wrote: "A modern Republican foreign policy recognizes that there is still evil in the world - people who hate America and the ideas for which it stands. Today, we face enemies who are hard at work to develop nuclear, biological, and chemical weapons, along with the missiles to deliver them. The United States must remain vigilant and have the strength to defeat its enemies. People driven by enmity or by a need to dominate will not respond to reason or goodwill. They will manipulate civilized rules for uncivilized ends."

Although regarded as a pragmatic promoter of US economic interests, Zoellick has an idealist streak that also aligns him with the neo-conservatives. In his Foreign Affairs article, Zoellick points to the need for a foreign policy that recognizes the "appeal of the country’s ideas are unparalleled", and points favorably to the idealism of presidents Theodore Roosevelt and Woodrow Wilson in promoting their visions of an international order based on their visions of America’s transformational role in world history.

Zoellick’s Foreign Affairs essay was a companion piece to another predictive about new directions in foreign policy by Rice. Zoellick worked alongside Rice in the National Security Council in the Bush Sr administration. In 1998, Zoellick joined a group of neo-conservatives and militarists, many of whom would later form the upper ranks of George W Bush’s foreign-policy teams, in signing statements of the neo-con Project for the New American Century. The statements among other things called for increased military budgets and a policy of regime change in Iraq.

Coalition of the liberalizers

The Senate unanimously confirmed Zoellick as USTR in 2001, and it is expected that his nomination as deputy secretary of state will also receive strong bipartisan support. Although Zoellick failed to seal a Free Trade of Americas Agreement during his tenure as USTR, he won respect among the corporate community for his role in gaining bipartisan support for Bush’s request for "trade promotion authority", also known as fast-track authority because it reduces the role of congressional and public review of new free trade pacts.

When it comes to global economic policy, Zoellick is not a free trade ideologue or a committed advocate of the WTO. Instead, he regards free trade philosophy and free trade agreements as instruments of US national interests. When the principles of free trade affect US short-term interests or even the interests of political constituencies, Zoellick is more of a mercantilist and a unilateralist than a free trader or a multilateralist.

Zoellick coined the phrase "the coalition of the liberalizers" prior to the failed WTO ministerial in September 2003. That’s what Zoellick called the group of countries that have joined the United States in bilateral or regional trade pacts. In the face of mounting opposition from Brazil and other developing nations to the US global-economy agenda, Zoellick began forging a "coalition" of trade partners that agree to open their markets and protect US investment in order to ensure coveted access to the huge US market.

In early 2003, Zoellick outlined a free-trade strategy that anticipated rising opposition to Washington’s liberalization agenda. Instead of committing itself to making the compromises necessary to complete another negotiating round in the WTO, the Bush administration announced that it would pursue its agenda through free-trade agreements (FTAs) with single nations or sub-regional groupings. "Our FTA partners are the vanguard of a new global coalition of open markets," declared Zoellick.

At the beginning of the Bush administration, the US had FTAs with only a few nations, including Canada, Israel, and Mexico. However, once Congress in 2002 gave the executive branch trade promotion authority - the go-ahead to pursue "fast-track" trade negotiations - the Office of the US Trade Representative launched free trade initiatives around the world outside of the WTO. Zoellick took the lead in negotiating the Central America Free Trade Agreement in May 2004. That same month the USTR announced the start of bilateral trade negotiations with Colombia, Ecuador, and Peru (and possibly Bolivia) as part of the planned US-Andean Trade Agreement as well as the beginning of free trade negotiations with Panama.

Zoellick termed his free trade strategy one of "competitive liberalization". By establishing numerous bilateral and regional agreements outside the WTO, the US hopes to undermine opposition to its aggressive liberalizing agenda and weaken developing country demands for US market access, subsidy reductions, and special treatment in the WTO. In a July 10, 2003, op-ed in the Wall Street Journal, the administration’s trade czar clearly articulated the United States’ global trade and investment strategy. He explained that under WTO consensus procedures, "one nation can block progress" in extending economic liberalization to new areas. Explaining that Washington can pursue its liberalization agenda outside the WTO, Zoellick warned: "It would be a grave mistake to permit any one country to veto America’s drive for global free trade."

Although other nations remain committed to a multilateral forum and universal trade rules, Zoellick signaled that Washington was willing to proceed unilaterally. He predicted, "The WTO’s influence will wane if it comes to embody a new ’dependency theory’ of trade, blaming developed countries ..." Seeing the recalcitrance of many developing countries to approve new trade and investment rules, the Bush administration has adopted a "my way or the highway" approach to global economy issues. This unilateral posture with respect to trade and investment rules mirrors its unilateralism in foreign and military policy.

The day the WTO talks broke down in Cancun, Mexico, the USTR said that the "won’t do" countries had won the day over the "can do" countries. Referring to the developing country coalitions that had come together to block the must-do agenda of Washington and the European Union, Zoellick issued a veiled threat to the multilateral process: "We’re going to keep opening markets one way or another."

The Bush administration’s decision to raise agricultural subsidies by US$80 billion in the 2002 farm bill underscored the charges that the US is a free-trade hypocrite. But protectionism and subsidies have political payoffs. When Zoellick returned from the failed Cancun talks, he was praised by leaders of the American Farm Bureau Federation for not budging on the issue of farm subsidies. This hypocrisy galls many developing countries, who see their competitively priced exports blocked by US protectionism while at the same time heavily subsidized US exports flow into their own domestic markets.

The USTR relentlessly pressured other nations, particularly poorer ones, to liberalize their economies. For itself, however, free trade serves more as a battering ram to knock down national barriers to US trade and investment than a universal principle. In a speech to the right-wing Heritage Foundation in Washington, Zoellick made the case that there is no alternative to globalization and that US companies and consumers were already benefiting in countless ways from this new wave of corporate-led economic integration. To drive his point home about all the new opportunities, Zoellick noted: "Even the funeral business has gone global, with a Houston-based company now selling funeral plots in 20 countries."

Neo-con-realist balance

The selection of Rice and Zoellick to direct the State Department points to President Bush’s determination to consolidate his foreign policy team. Although Rice and Zoellick are not blazing hawks like Rumsfeld, Cheney and Wolfowitz, they are loyalists and hardliners when it comes to promoting US military supremacy and corporate economic interests. Set to replace Colin Powell and his deputy, Richard Armitage, Rice and Zoellick can be counted on for reducing frictions within the foreign policy apparatus and seeking more "policy coherence" with the Pentagon and Cheney’s office.

Part of that policy coherence was expressed by Zoellick in the aftermath of the September 11, 2001, attacks, when he conflated his free-trade initiatives with the "war on terrorism". "Now we have a clear enemy who is not only trying to do us great damage, but is also trying to terrorize us ... to paralyze us by terrorizing us," said Zoellick. "The terrorists deliberately chose the World Trade towers as their target. While their blow toppled the towers, it cannot and will not shake the foundation of world trade and freedom. Our response has to counter fear and panic, and counter it with free trade."

This coherence was also on exhibit during a speech by Zoellick at the Institute for International Economics in 2003, when he linked economic agreements with political adherence to US foreign policy. "The US seeks cooperation - or better - on foreign policy and security. Given that the US has international interests beyond trade, why not try to urge people to support our overall policies? Negotiating a free trade agreement with the US is not something one has a right to do - it’s a privilege."

Although not part of the new right’s militarist and neo-conservative camps, Zoellick’s personal arrogance, his unilateralism, and his loyalty to Bush and the Republican Party’s new radical elite make him a perfect fit for Bush’s new foreign policy team.

Tom Barry is policy director of the International Relations Center and author of numerous books on international relations.

(First published by the Right Web Program at the International Relations Center. Copyright 2005 IRC.)