*EPF406 07/10/2003
Byliner: Zoellick Says U.S. Trade Strategy Advocates Openness
(U.S. Trade Representative op-ed article in The Wall Street Journal) (1080)

(This op-ed by Robert Zoellick, U.S. Trade Representative, was published in the Wall Street Journal July 10, and is in the public domain. No republication restrictions.)

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Our Credo: Free Trade and Competition
By Robert Zoellick

In early September, representatives from 146 countries that comprise the World Trade Organization will assemble in Cancun to determine the course of global trade negotiations. At this point, the meeting seems more likely to highlight differences than agreements. One concerned observer, Prof. Jagdish Bhagwati of Columbia and the Council on Foreign Relations, wrote on these pages last week that the U.S. should respond to this risk by forgoing our other efforts to open markets. This course would both weaken our hand in the WTO and give up the benefits from advancing free trade on multiple fronts.

The Bush administration's reinvigoration of America's drive for free trade -- globally, regionally, and with individual countries -- has created a momentum that strengthens U.S. influence. It is a little puzzling to read criticism of this administration for negotiating too many international agreements to advance economic growth, development and the rule of law!

The president's strategy has already produced results. Congress restored the executive's trade negotiating authority after an eight-year lapse, demonstrating a united commitment to new global trade negotiations. Simultaneously, the U.S. helped launch these negotiations in Doha in 2001, reversing the prior debacle in Seattle. And we completed the stalled effort to bring China and Taiwan into the WTO, triggering openings for U.S. businesses and farmers negotiated over 15 years.

It is critical for the U.S. -- along with the European Union -- to propel the Doha trade and development agenda. That is why America has challenged our WTO partners to view this negotiation as a once-in-a-generation opportunity. We have proposed the elimination of all tariffs on manufactured goods by 2015. In agriculture, the U.S. has called for eliminating export subsidies, cutting $100 billion from domestic subsidies that distort production and trade, and slashing tariffs to no higher than 25% -- with the U.S. average dropping to 5%. The U.S. has also pressed to open services markets, which the World Bank estimates could add $900 billion a year to developing economies alone.

Now that the EU has decided on a reform of its Common Agricultural Policy, we are urging it to translate its internal changes into aggressive international proposals. We would also welcome leadership from Japan, which has benefited so much from the international trading system. To succeed, all WTO members must have a sense of mutual responsibility, while recognizing the necessity of special treatment for the poor and most vulnerable. Some argue that there is no need for developing countries to lower trade barriers, even though 70% of the tariffs paid by developing countries are to other developing countries. Yet developing country barriers protect the privileged few, with the price paid by poor consumers. The WTO's influence will wane if it comes to embody a new "dependency theory" of trade, blaming developed countries while not seeking even the gradual removal of trade barriers in developing economies.

So what should the U.S. do if other nations choose protectionism over free trade? Under the WTO's procedures, one nation can block progress. It would be a grave mistake to permit any one country to veto America's drive for global free trade. Our strategy is based on a concept that any economics professor should appreciate: competition. If some countries hide behind the false security of protectionism, the U.S. will work with those that believe true economic strength is achieved through openness. The strategy is simple: The U.S. is spurring a competition in liberalization. In the wake of the disastrous protectionism of the 1930s, Secretary of State Cordell Hull employed this logic to cut tariffs and build momentum for global trade rules by negotiating 32 bilateral agreements.

That is why the U.S. has pressed forward with a portfolio of free trade agreements while doing all we can to make the WTO negotiations succeed. Our FTAs are encouraging reformers -- many in fragile democracies -- in Latin America, Africa, the Middle East, and the Asia-Pacific region. These partners have become some of the WTO's foremost champions for open markets.

America's FTAs break new ground -- they establish prototypes for liberalization in areas such as services, e-commerce, intellectual property for knowledge societies, transparency in government regulation, and better enforcement of labor and environmental protections. Given the new dimensions of globalization, we need to demonstrate that trade rules can adapt to meet new needs and circumstances. Our FTAs also level the playing field for U.S. businesses because others -- especially the EU -- negotiated a host of agreements in the '90s while the U.S. stood on the sidelines. This very week, House and Senate Committees will consider the implementing legislation for our new state-of-the-art FTAs with Singapore and Chile.

Our free trade negotiations with Central America and the Southern African Customs Union are helping developing countries gain from regional integration and stronger economic ties to America. We hope other U.S. agreements -- for example, with Jordan, Morocco, and Bahrain -- will serve as models for their neighbors that need to embrace openness.

The Bush administration's strategy also recognizes that the Constitution gives Congress the power to regulate trade. During the last round of global trade negotiations -- which took over seven years -- when the executive could not keep free trade on offense, the protectionists were delighted to fill the vacuum. In trade as in politics, one cannot beat something with nothing.

For years, study groups at the Council on Foreign Relations have urged the U.S. government to make its foreign and economic policies mutually supportive. Now that President Bush is doing so to advance growth and development, open markets for U.S. workers and farmers, promote economic and political liberty, and build the economic foundations for stronger security ties, some scholars seem to urge a return to trade policy parochialism in only one forum.

We will do our best at Cancun to keep the Doha negotiations on track. But if others falter, the Bush administration will keep negotiating for free trade -- to create jobs, keep America competitive, and create opportunities for modernizing reformers around the world.

(Robert Zoellick is the U.S. Trade Representative.)

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(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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