Bush Policy May Break WTO Deadlock

Wednesday, December 27th 2000, 12:00 am

By: News On 6

GENEVA (AP) â€” President-elect Bush's trade policies are similar to the outgoing administration's, but there is one big difference: President Clinton has sought labor and environmental standards in global trade treaties, a demand Bush does not support.

That difference may be enough to break the deadlock in the World Trade Organization, analysts say.

``The American effort to use trade to some extent as a weapon to achieve goals in the area of environmental regulation and human rights will now be dulled. This isn't something that Bush is sympathetic to,'' said Barry Bosworth, an economist at the Brookings Institution in Washington.

The WTO is the body that sets rules on international trade for 140 countries. The Clinton administration's demands, which were bitterly opposed by developing countries, led in large part to the collapse of the WTO's Seattle conference last year and the failure to start a new round of wide-ranging trade negotiations as planned.

India, Pakistan and others reacted angrily when Clinton said countries that fail to meet labor standards should face trade sanctions. The developing countries see such demands as covert protectionism by richer nations to keep out products from countries with lower labor costs.

Bush's pre-election policy statements said global labor standards had to be tackled, but not at the WTO. A move away from such issues is one way in which Bush's election may be the needed boost for the organization.

The United States, the world's single largest economy, is a major player at the WTO. Governments may stress the one member-one vote system in the Geneva-based body, but they're under no illusions: Nothing happens unless the United States agrees to it.

WTO Director-General Mike Moore plays down the changes which will come from the new administration.

``I don't think great national interests change that dramatically. The U.S. leaders when they have come here have been at pains to point out how bipartisan the United States is on so many issues,'' he said.

And even if taking labor off the table gives a boost to other countries, Bush must still show enthusiasm for the next round of trade talks to go ahead, according to Stephen Woolcock, a lecturer in international relations at the London School of Economics.

``A George W. Bush administration is likely to be close to business interests, and it is not clear what business would get from a new round of negotiations,'' Woolcock said. ``It does not want investment or competition included. It would not benefit much from the removal of remaining tariffs.''

During his campaign, Bush predicted he would have one vital advantage in international trade that Clinton never had: Congress would allow him to negotiate trade deals without having to go back to Washington for approval on every point.

Bosworth believes Congress' unwillingness to give Clinton quick all-or-nothing decision-making power on deals â€” known as fast-track negotiating authority â€” was a major reason for the collapse of Seattle.

``Despite what Americans would like to say, you cannot do much without the U.S. first having fast-track authority because no one from outside would believe an American commitment,'' he said.

Bush's prospects of winning fast-track authority must be proven. They depend on convincing the finely balanced Congress, where he will likely face opposition from politicians who are nervous about the whole idea of the WTO, Bosworth said.

WTO can sit in judgment on U.S. law, a fact that leaves the right wing of the Republican party concerned about loss of sovereignty. At the same time, WTO rules requiring the United States to open its market to imports makes the Democrats' left wing fear job losses.

``I am still skeptical about whether or not Bush will get very extensive fast-track authority. He has to be very compromising with the Democrats,'' Bosworth said.

John Weekes, Canada's former ambassador to the WTO, said Bush can take his time on fast-track. He points out that President Reagan lacked fast-track authority at the beginning of the last round of negotiations, known as the Uruguay Round, which concluded in 1994 after nearly eight years of talking.

``I wouldn't argue that other partners should say this is an absolute requirement before everything is started, though clearly you need fast-track authority before you get to the decisive phase of the negotiation,'' said Weekes, now a trade expert with the Washington, D.C.-based APCO Worldwide public affairs agency.

He said next year â€” before the U.S. midterm elections begin to loom and a number of major European countries also face elections â€” is the best chance to get things moving also in Geneva.

``With a new U.S. administration coming in with a new approach, it's going to give a more dynamic sense of U.S. leadership in the system than we've seen in the last year of the Clinton administration,'' Weekes said. ``I think this is the year for the people who want to try to get negotiations going.''