- The Washington Times - Friday, August 2, 2002

With trade-promotional authority in its sights, the White House finally started to demonstrate some free-trade savoir-faire. The administration's cagey move allowed President Bush to accept the trade authority, which the Senate gave final approval to yesterday with a 64-34 vote, with some flourish. Still, the president's earlier concessions to protectionist pressures will continue to hurt his credibility if he fails to quickly build on his well-conceived checkmate.

The newly approved trade bill upholds congressional authority to reject or approve trade pacts, but prevents legislators from making any changes to an already negotiated agreement. Many heads of state have de facto trade-negotiating authority and won't ink a trade deal with Mr. Bush if it can later be changed by Congress.

Given the administration's decision to impose some tariffs on steel imports and Canadian lumber, and its signing of the pork-heavy, $100 billion-plus farm bill, the congressional decision to grant the president trade authority threatened to become oxymoronic. But with approval of the trade bill in the offing, the White House made some deft moves to bolster its free-trade gravitas.

Last Thursday, the same day the House and Senate reached an agreement on the trade-authority bill, the White House proposed a plan that would commit members of the World Trade Organization to lower agricultural subsidies and tariffs. Under the administration's plan, each country would cut its production-linked farm subsidies to 5 percent of the country's total farm output. In the United States, that would force the government to cut farm subsidies from $19 billion to $10 billion. Europe would have to cut its subsidies from $60 billion to $12 billion and Japan from $33 billion to $4 billion.

Also under the administration's proposal, a trade-liberalizing formula would reduce the global average farm tariff to 15 percent from 62 percent, and all WTO countries would have to cap their tariffs at 25 percent. Under this formula, America's farm tariffs would fall from 12 percent to 5 percent. American farmers have given the plan widespread support, and the proposal is sure to cheer America's poorer trading partners, which have long pointed out the harmful effects of industrialized nations' agricultural subsidies and bitterly criticized the U.S. farm bill.

Naturally, the European Union is incensed. Europeans claim the U.S.-tailored WTO proposal will allow America to keep billions of dollars in farm subsidies that it didn't define as "trade distorting," since they aren't tied to production, but still have an adverse free-market impact. Granted, the U.S. proposal may not be perfect, but the White House has floated a serious plan to scale down global farm tariffs and subsidies. If Europe is bent on criticism, it should come up with an equally ambitious alternative.

Now that the president is equipped with trade authority, he can quickly pick up trade deals with Chile and Singapore, which, for all practical purposes, need only to be signed. These trade deals are too small to inject the U.S. economy with a dose of vitality in and of themselves, but Mr. Bush will see his international currency rise as he makes headway on free trade.

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