FILLING IN A BLANK SLATE ON US TRADE POLICY

FILLING IN A BLANK SLATE ON US TRADE POLICY

Next January, the United States will swear in a new president. As is the case with all presidents, he will have the opportunity to have an important impact upon policy in many areas. And although the topic has not received much attention, there is one area in which he will have a virtually blank slate to develop policy: international trade.

When Bill Clinton took office in 1993, he spent most of his first term completing and selling the Congress on two international trade negotiations begun by the Bush administration: the Uruguay Round multilateral negotiation and the North American Free Trade Agreement.Similarly, the Bush administration inherited at least the concept of those agreements from the Reagan administration.

For better or worse, the next president will inherit little in the way of ongoing negotiations.

After the recent breakdown of talks in Seattle, multilateral negotiations through the World Trade Organization seem to be locked at a standstill. Little momentum has been established for additional free-trade talks either with Latin America or Asia. Barring unforeseen developments, the talks on China's WTO accession will be over.

The conventional wisdom is that presidential candidates are unlikely to do much to fill in that blank slate during the campaign for at least two reasons.

First, the leading major party candidates all seem to agree generally on the merits of free trade and trade agreements. Second, as Seattle demonstrated, trade is not a political winner. In fact, opposition to free trade seems fairly widespread.

The next president, however, will have the opportunity to write on this blank slate and initiate an international trade policy agenda that could last for decades. Even if they do not mention the subject during the campaign, the next president and his advisers are certain to create an agenda.

Among the options and issues they will have to consider are:

* Whether to stand pat. The United States has undertaken many historic trade agreements in recent years. With due respect to those who argue that momentum toward free trade must be maintained, a strong argument can be made that the United States and the world need time to assess the progress made in recent years through the WTO and Nafta.

In the current political environment, simply enforcing existing agreements and implementing existing U.S. laws is a perfectly respectable position, even for a president committed to free trade.

* Whether to focus on the WTO. The next president can also go back to the World Trade Organization to try to jump-start talks. Depending upon the new president's beliefs, he could focus upon new progress on agriculture and services; endorse a new market-opening agenda, such as a global antitrust agreement; or try to make real progress on integrating labor and environmental concerns into the global trading system - a task that some president must ultimately confront.

* Whether to push for new free-trade areas. President Clinton has tried to start talks with Latin America on a free-trade area, but Congress has declined to provide negotiating authority for a new agreement. APEC could grow into a similar process with Asia.

Beyond that there are other ideas that may have both economic and geopolitical appeal. The concept of a trans-Atlantic free-trade area has sparked substantial interest in some circles, including organized labor. New free-trade areas with like-minded countries at a similar level of development, such as Australia and New Zealand, have also been suggested.

* Russia. What to do about Russia is an issue the next president is certain to be forced to face.

Now that China appears on the verge of WTO membership, Russia will likely clamor for the same treatment. WTO membership for Russia is likely to become a central issue of U.S.-Russian relations, just as China's WTO membership has come to dominate U.S.-China relations.

The potential carrot of WTO membership may be tied into issues ranging from nuclear disarmament to Chechnya.

Of course, there is also the distinct possibility that a candidate like Patrick Buchanan may inject trade directly into the campaign discussion, forcing a detailed discussion of the issue.

But even if that does not occur, campaigns have had an important impact upon U.S. trade policy in many ways. For example, President Reagan introduced the concept of a U.S.-Canada free-trade agreement, which eventually led to Nafta, as a live issue during his campaign.

If candidates are not inclined to volunteer their agenda as President Reagan did, voters and interest groups may still be well-advised to ask.

In all likelihood, the next president will write his own trade policy upon a blank slate, and that agenda is likely to have a powerful impact on American trade policy and the American economy.