U.S. trade debate can affect others

There’s an interesting debate south of the border that could have important implications for Canada – and perhaps some useful insight into trade policy.

The U.S. debate is whether Congress should again give the president “fast-track” negotiating authority for trade agreements. With the next round of world trade talks coming up, this will be a key indicator of whether the U.S. is still committed to trade liberalization.

“Fast track” means Congress can only accept or reject a trade agreement; it would not be able to make amendments. Without fast-track status, an agreement could face hundreds of proposed amendments from protectionist politicians supported by special-interest groups.

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Passage of any such amendments could require renegotiating the multinational agreement, perhaps killing it. Or, faced with the prospect of Congressional amendments, negotiators might settle for an agreement that changes little and makes no real progress toward trade liberalization.

A related problem is continuing pressure to include environmental and social issues in trade agreements. Part of the pressure comes from groups genuinely concerned about conditions in developing nations. But part also comes from enterprises that don’t want to compete with foreign companies that have lower labor costs.

U.S. agribusiness leaders like Cargill president Ernest Micek have warned that it would be a costly mistake to link trade and other issues. In the latest corporate newsletter, Micek said freer trade can be to everyone’s benefit, and is particularly important for North American agricultural exports.

“Creating a fairer society is not the job of trade negotiators,” he argues bluntly. “Society as a whole must accept that responsibility – and the job begins at home.”

If a trade agreement is successful, he says, it can generate economic growth that societies can use to improve social and environmental conditions.

Trying to write social and environmental conditions into trade agreements just creates another obstacle to freer trade:

“Other countries understandably question the United States’ right to tell them how to manage their lives.”

The Cargill president, who this month became chair of an influential group of U.S. business leaders lobbying for freer trade, may have an uphill battle. There is still a strong U.S. tradition of using trade for political purposes, including the Cuban boycott.

Meanwhile, Canadian policymakers might also heed his words as they develop their negotiating goals.