TRADE SCENE BY RICHARD LAWRENCE

TRADE SCENE BY RICHARD LAWRENCE

In these closing days of the Clinton administration, the name of the game is Legacy - a look what the administration achieved, for good or bad, over the past eight years. On the trade policy front, the estimable Charlene Barshefsky, U.S. Trade Representative for most of the Clinton presidency, is offering her views.

The administration, she postulates, has delivered on a trade agenda 'as ambitious as any in six decades.' More than 300 trade agreements were negotiated, which, she claims, has 'fundamentally changed the world trade environment.' She cites, among others, the Uruguay Round, the Africa Growth and Opportunity Act, the North American Free Trade Agreement, an expanded Caribbean Basin initiative, global telecommunications and financial services accords, and landmark pacts with China, Vietnam and Jordan.She credits the administration, too, for international institution-building on a scale perhaps not seen since the 1940's. Examples: the World Trade Organization, the Transatlantic Economic Partnership, the summits of the Americas, and the annual heads of state meetings of the Asia Pacific Economic Cooperation forum.

Meanwhile, she notes, U.S. exports have expanded by more than 75% , up roughly $500 billion a year from 1992 and this year, for the first time, they are expected to top $1 trillion. World tariffs, she adds, have dropped by one-third.

These trade developments, together with a prospering U.S. economy, will,

she suggests, help pass to the incoming Bush administration a legacy of 'confidence, optimism and leadership.'

Yet, there are those who take a decidedly less exuberant view of the Clinton trade policy record, which, they find more checkered than consistent. Ask, for instance, Jeffrey Schott, a senior fellow at the Institute for International Economics, and Denise Froning, a Heritage Foundation trade analyst.

Both concur that that the Clinton team got off to a good start in 1993-94, implementing the North American Free Trade Agreement and wrapping up the Uruguay Round negotiation, and that it finished strong last year (2000), capped by the China trade accord.

But much of what happened in the intervening years is another story, they feel. Indeed, argues Froning, Clinton 'showed a singular absence of leadership on trade throughout most of his presidency.' Given the strong U.S. economy, says Schott, Clinton 'squandered a great opportunity to educate the public on the benefits and importance of free trade.'

Adds Ernest Preeg, a former U.S. trade official now a Manufacturers Alliance senior fellow: much of the putative Clinton legacy is more the work of others. Before Clinton took office, Nafta had already been signed and the Uruguay Round negotiation was about '90%' completed, he notes.

What's more, others point out, the sub-Saharan Africa and Caribbean Basin trade initiatives were more the creation of congressional Republicans than the Clinton administration.

As for institution-building, the administration again gets mixed reviews. It joined with other governments to create the World Trade Organization as the successor to the General Agreement on Tariffs and Trade. And in 1994, Clinton hosted the first 34-nation Summit of the Americas, launching the Free Trade Area of the Americas initiative.

He led the way for annual summits by the 21-nation Asia Pacific Economic Cooperation forum, hosting the first such meeting. Until then, APEC members had conferred only at a ministerial level. And, together with the 15-nation European Union, he created the Transatlantic Economic Partnership, involving semi-annual meetings with EU leaders.

But is this summitry producing much of substance? Too often, says Schott, summits produce no more than 'photo opportunities.'

For instance, the Transatlantic Economic Partnership is frustrated by unending U.S.-EU trade spats and so far its focus looks relatively narrow, mainly addressing regulatory standards.

As for APEC, its member nations committed to regional free trade by 2010 or 2020, depending on a nation's economy, but has done little to move toward that goal. For example, a proposal to pare tariffs in eight product sectors remains stymied.

And the FTAA initiative is progressing slowly, its ultimate prospect yet unclear.

But there is still more to the Clinton trade legacy, and it ain't good: the failure to secure presidential fast-track negotiating authority - key to any major new trade liberalization initiative -- and the breakdown a year ago of the WTO talks for launching a global negotiation.

Clinton, some observers insist, could have won fast-track authority, which limits congressional action on new trade agreements to quick up-or-down votes, if he had tried harder in 1997. For years thereafter, the administration seemed transfixed by the fast-track debate pitting business against labor and environmentalists.

The breakdown of the WTO talks a year ago in Seattle is laid in large measure to the Clinton administration' s hosting the talks before any meaningful consensus was reached among WTO members on the negotiations goals. Worse yet, Clinton himself added to the impasse by saying he favored trade sanctions on countries failing to meet international labor standards. With that, the developing countries, representing most WTO members, effectively folded their Seattle tents.

Thus, much of the Clinton trade legacy is for the Bush administration to overcome, not to build on. And perhaps the Bush team's two most significant tasks will be to work with Congress, in particular 'moderate' House Democrats, to craft a fast-track bill and to confer with the EU, Japan and other countries on reaching a new WTO trade round consensus.

Bush is clearly on record for wanting fast-track negotiating authority, early enough to show other leaders when they meet in April at Quebec on hemispheric free trade that fast track is 'on its way.'

How the Bush team tries to reconcile labor, environmental and business differences to make fast-track possible is the critical question. An early tip-off may come in the Bush follow-up to the Clinton administration's recent trade pact with Jordan, the first U.S. trade accord directly including labor and environmental provisions.

Forging a new strategic trade agenda won't come easily, given an ever-divided Congress, record trade deficits and a slowing economy. Still, there's an air of optimism that fast-track may be enacted this year and that even the WTO's 140 member nations may agree to launch a comprehensive new trade round by next autumn.

In all, it looks like an agenda as ambitious as any in 6-l/2 decades.