When Bill Clinton called a special session of Congress in 1994 to win approval of his giant General Agreement on Tariffs and Trade (GATT) treaty, one feature in particular of that trade deal stuck in the craw of conservatives.
Clinton had yielded U.S. sovereignty to a world court of trade, the World Trade Organization, where for the first time America submitted to a one-nation, one-vote formula — and surrendered its veto power. In the WTO, the United States has the same voting power as Ecuador.
Populists were outraged that their country had been dragooned into a United Nations of world trade. Constitutionalists were appalled.
Why did Congress not simply kill that one feature of GATT? Because Congress had surrendered its constitutional right to do so! When it agreed to “fast track” in 1974, Congress gave up its right to amend trade treaties. Future congresses were restricted to voting “yes” or “no” on whatever deal a president brought home.
After 1994, however, Clinton’s fast-track authority expired, and Congress regained its authority to amend trade treaties. Yet, amazingly, Clinton is again demanding that Congress surrender this right, and conservatives are anxious to accommodate him.
Why, after the North American Free Trade Agreement (NAFTA) disaster, would a GOP Congress agree to rubber-stamp the next Clinton trade deal? Because Republicans are blind to the realities of the new global economy, where imported manufactures equal more than 50 percent of U.S. production, where U.S. merchandise trade deficits are approaching $200 billion, where trade treaties can cost a party a presidential election.
Can Republicans not see how the world has changed? Trade is no longer the stuff of bipartisan consensus. Trade and sovereignty are the issues on which the politics of America and Europe are being reshaped and conservative parties smashed to pieces. For Congress to yield, in advance, its right to amend trade treaties is to leave the GOP’s future in the hands of Clinton and his trade negotiators.
Clinton knows this! In the White House speech-writing shop, the term “NAFTA expansion” — what fast track is all about — is banned; the term fast track itself is being replaced by “Renewal of Traditional Trading Authority.” As The Washington Post reports: “(I)f they can redefine the lingo, administration officials figure, they may erase some of the imagery associated with Clinton’s plan, making it more salable to the public and … Congress.”
Translation: Bill Clinton is putting a new label on the political rat poison he wants Republicans to swallow. Indeed, he has to. For while Republicans may still consider themselves proud papas of NAFTA, to Middle America, NAFTA has come to mean narcotics from Mexican cartels pouring into U.S. cities, manufacturing plants shutting down, jobs going south, illegal immigrants pouring north, $50 billion bailouts at the expense of U.S. taxpayers, and schoolkids getting sick on NAFTA-berries.
The NAFTA lobby routinely trots out its all-purpose excuse. This isn’t the fault of NAFTA, they say, but of a peso devaluation no one could foresee. But many did see devaluation coming, Ross Perot among them. And currency manipulations have become a favorite scam of regimes seeking to export their way to prosperity at our expense. Like Mexico, the nations of Southeast Asia are right now devaluing their currencies to cut imports and increase exports to the U.S.A.
What are foreign countries doing with the mountains of dollars from their U.S. trade surpluses? Buying U.S. Treasury bonds and T-bills so American taxpayers will be forever transferring billions in annual interest into their vaults.
As of April, our “trading partners” held $1.215 trillion — more than twelve hundred billion dollars — in Treasury securities. Japan alone held $300 billion; China and the Asian “tigers” $172 billion; OPEC $53 billion; Canada-Mexico $44 billion. So vulnerable has the United States become that when Prime Minister Hashimoto hinted he might dump Japan’s hoard onto the market, the Dow-Jones Industrial Average had a near-death experience.
If Congress grants Clinton fast-track authority to expand NAFTA, it will raise a question: What exactly is Congress for? It has surrendered the power to make war to the president and its power over social issues — abortion, quotas, education — to the Supreme Court. If Congress doesn’t do trade, what does it do? Whether pro-NAFTA or anti-NAFTA, free trader or economic nationalist, why would Republicans unilaterally surrender their right to amend trade treaties to Clinton-Gore, when those treaties could mean the difference between defeat and victory in 2000?
Can it be that John Stuart Mill was right when he called the Tories “the Stupid Party”? We shall see.