On the Fast Track to Trade Regulation

Published October 1, 1997

The Clinton administration’s bid for “fast-track”trade negotiating authority has encountered some early opposition from an unusual quarter: ardent proponents of free trade.

Though fast-track has been granted routinely to past presidents, some fear what President Clinton would do with such expanded power. Republicans in Congress are worried that the President would use trade policies as a way to impose and enforce international environmental policies.

Trade agreements affect U.S. law, as do treaties. But unlike treaties, trade agreements do not require ratification by two-thirds of the Senate. Moreover, trade agreements negotiated under fast-track authority cannot be amended by Congress, but must be approved as a package by a simple majority of both houses.

Fast-track trade authority could give the President an opportunity to implement elements of his environmental and trade agenda that might have difficulty in Congress. The Clinton administration is under considerable pressure from environmentalists and organized labor to pursue their anti-trade agenda through the World Trade Organization (WTO) or through expansion of NAFTA. Trade barriers could easily be disguised as environmental standards. Environmental trade sanctions could be imposed against imports, and foreign countries might enact penalties against American exports.

Senator Phil Gramm (R-Texas) analyzed the administration’s trade proposal and concluded it would permit dangerous encroachments on trade. “As I read your proposal, it is totally and absolutely unacceptable,” said the Texas lawmaker.

Likewise, a group of more than fifty international economists said the U.S. would hurt poor countries and impede world trade if it included requirements for environmental and labor standards in the fast-track legislation. Their concerns were expressed in a petition circulated by prominent Columbia University economist Jagdish Bhagwali.

Those objections prompted Senate Finance Committee Chairman William Roth (R-Delaware) to re-write the White House proposal. The Republican version of the fast-track bars inclusion of environmental language in future trade legislation that “would restrict the autonomy of the United States.” Nevertheless, U.S. Trade Representative Charlene Barshefsky praised the Roth re-write as “consistent with the president’s objectives” on environmental and labor issues.

Senate Fiance Committee ranking Democrat Daniel Patrick Moynihan (D-New York) explained that the Clinton administration endorsed the Roth version because Barshefsky and other administration officials had vetoed Republican revisions to environmental and labor negotiating authority that the White House considered unacceptable.

The House version of fast track more tightly limits the President’s authority to link trade with environmental and labor standards. This more restrictive version has alienated Democrats, including House Minority Leader Richard Gephardt (D-Missouri), making it more difficult to pass fast track in the House.

In the end, the President’s bid for fast-track authority may be defeated by an unlikely set of bedfellows: free-trade Republicans, who refuse to give the White House an environmental blank check, and trade-protectionist Democrats.

James M. Sheehan is a research assistant at the Competitive Enterprise Institute.