The question is which Zoellick will take charge, after his expected confirmation this week. The “battle in Seattle” of December 1999 derailed decades of work toward lowering global-trade barriers, leaving the WTO in disarray. Europe, Asia and Latin America now look to the new U.S. trade rep to clean up the mess and answer their myriad complaints. Europe and the United States are engaged in battles over planes, bananas and beef, and Europe fears the Texan president’s ties to Latin America could promote a divisive trend toward the establishment of regional trade blocs. Every major nation will remain skeptical of Bush administration promises until Congress gives up its power to rewrite trade deals. And Democrats in Congress are reluctant to cede that power without assurances that Bush will honor the Seattle agenda: that free-trade deals should require all nations to respect U.S. standards of environmental protection and labor rights. U.S. trade policy is paralyzed by these pressures. “We’ve lost the initiative on international trade,” said Robert Hormats, a former trade official in the Carter and Reagan administrations. “We’ve been basically sitting on the sidelines.”
Zoellick, 47, is walking into a rough job at a tough time. A former high-ranking official at State, Treasury and the White House under Ronald Reagan and George Bush Senior, he has been here before. He was a key player in negotiations on German reunification, the U.S. savings and loan crisis, and peace in Nicaragua. He helped cut the North American Free Trade Agreement, and to create the WTO itself–and he’s not shy about taking credit for it. Self-assured and bright, he is also inclined to be exacting and prickly. “I have no questions about his ability to negotiate with foreigners,” said one veteran U.S. trade negotiator. “My question is whether he’s got the humility and humor to schmooze up on the Hill. A good USTR must spend an incredible amount of time back-scratching and petting up there, and I wonder if he has the patience.”
Zoellick’s nomination was welcomed in Europe as a sign that Bush, a suspected isolationist, is serious about tackling the world trade impasse. The United States has imposed $308 million in sanctions on the EU over the beef and banana wars, and the EU threatens to retaliate with $4 billion in sanctions against proposed U.S. tax breaks for exporters known as foreign sales corporations. Zoellick has one trump: strong ties to EU Trade Commissioner Pascal Lamy, with whom he worked on G7 summits in the early ’90s.
Contacts will go only so far. Seattle has emboldened protesters, and no trade meeting convenes now without the threat of disruption. Congress refused to give Clinton “fast track” authority to cut deals without detailed congressional review of each concession–but its votes came amid anger over scandals (like Monica Lewinsky) that had nothing to do with trade. Bush may have an easier time winning “fast track” powers–but the smart money says he will put off that fight, and try to craft a trade agenda first.
The new trade czar may benefit from a kind of post-Seattle syndrome. “Having failed so spectacularly at Seattle, everybody is being a little more pragmatic,” said Geza Feketekuty, a trade expert at the Monterey Institute for International Studies. Lobbyists for U.S. exporters like Caterpillar and Boeing are talking compromise on labor and the environment. The EU is considering concessions on bananas and beef (but not on the new Airbus). Unions recently endorsed a deal that requires Jordan to maintain its labor and environmental standards–not raise them. Even Zoellick’s old targets are willing to wait and see. AFL-CIO director of public policy David Smith calls Zoellick’s remarks about unions “troubling,” but says he will be judged by his actions in office. So for now, nobody knows how much power, trust and influence Robert Zoellick will collect.
