- The Washington Times - Tuesday, May 1, 2001

Major business groups and key U.S. allies are pushing President Bush to set his sights on a higher goal than a deal made last month to bring free trade to the Western Hemisphere a new round of global trade talks.

Ever since a December 1999 meeting of the World Trade Organization (WTO) in Seattle ended in a cloud of tear gas without starting a fresh round of negotiations, this goal of the former Democratic and the new Republican administration has been on ice.

Despite the agreement in Quebec to negotiate a Free Trade Area of the Americas (FTAA), pressure is building on U.S. Trade Representative Robert B. Zoellick to find a way to resuscitate moribund WTO talks.

"The free-trade agreements are lifeboats if nothing else works," said Robert Morris, president of the Global Business Dialogue, an industry group. "But let's keep the big ship afloat."

By diplomatic standards, time is of the essence because the WTO will hold its first ministerial meeting since Seattle in November in the Persian Gulf nation of Qatar. With complex issues dealing with agriculture, trade in services, investment and antitrust policy still outstanding, the United States will have to move quickly if the Qatar meeting is to succeed.

Keenly aware that American leadership is the key to getting a new round, European countries are pressing the United States to throw its hat into the ring this summer. They will take their case to Mr. Bush during a summit with leaders from the European Union in Sweden June 14, his first since taking office.

"We'd like a confirmation of the Bush administration's commitment to the multilateral system, even though we know that one priority is to negotiate the FTAA," Francois Huwart, the French trade minister, said in Washington last week.

The Bush administration's emphasis on trade policy with Latin America has worried Europe, which fears the United States is losing interest in a WTO round, diplomats said.

Business interests, by contrast, see the 140-member WTO as the only venue for negotiations that can produce results for a broad range of sectors and fear that the meltdown in Seattle has made the United States gun-shy.

"You can't cure the failure in Seattle by ignoring it," said Mr. Morris, who has written about the need for an "Urgent Round," a play on the Uruguay Round, the set of negotiations that created the WTO in 1995.

The proliferation of regional and bilateral trade agreements deals with Singapore, Jordan and Chile are on the horizon could make international trade more complicated.

The example of the chemical industry is a case in point.

Chemicals are a big business in the United States but, importantly for trade policy, companies like Dow and DuPont are highly successful exporters.

Unusual for the manufacturing sector, which has suffered chronic trade deficits, chemical companies added $6.3 billion to the American balance of trade last year thanks to plentiful natural resources and extensive research and development, according to the American Chemistry Council.

But when the United States negotiates a free-trade agreement with, say, Chile, it includes "rules of origin" that determine whether a good is truly a product of Chile. Only with this proof can the product enter the United States duty-free.

As a result, chemical companies have a hard time organizing their production around a tangle of trade pacts, according to Jim O'Connor, a lobbyist for the council.

"The greater the proliferation of these deals, the harder it is to take advantage of them," Mr. O'Connor said.

Getting a WTO negotiation under way is "our top priority for this year with no qualifications," he added.

Agriculture, a core constituency for free trade in Washington, also has set its sights on a WTO negotiation. The chief object of scorn for American farmers and ranchers, who derive one-third of their income from exports, for years has been the European Union's agricultural payments to its own producers.

The subsidies result in production above what politically powerful European farmers can sell at home, leading governments to then subsidize exports that compete with American farmers.

Regional agreements like the FTAA or bilateral deals with individual countries do nothing to get at these trade-distorting payments, said Audrae Erickson, a trade policy specialist with the American Farm Bureau Federation.

"We are competing against the combined treasuries of the 15 European Union member governments," she said. "We can only get at that through the WTO."


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