Is America Slipping in INTERNATIONAL TRADE.

• Author: Weidenbaum, Murray L.
• Position: Since Congress rejected the president's request for fast-track trade agreement powers, other nations have increased their international competitiveness

Unilateral trade sanctions, special export restraints, and tax and regulatory policies are eroding the competitiveness of U.S. manufacturers.

IN 1997, Congress turned down Pres. Clinton's request to renew the traditional "fast track" treatment of international trade agreements. Because emotion and misinformation characterized much of the public debate on fast track and related issues of foreign commerce, it seems appropriate to take another, more dispassionate look at this controversial subject and to answer key questions that energize the most extensive discussion.

Why should Americans be interested in international trade policy? The U.S. is the world's number-one exporter, so Americans have a substantial economic stake in freeing world commerce from unnecessary restrictions. A more fundamental answer was provided by economist Adam Smith in his 1776 classic, The Wealth of Nations: "It is the maxim of every prudent ... family, never to attempt to make at home what it will cost ... more to make than to buy. The tailor does not attempt to make his own shoes, but buys them of the shoemaker.... What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom."

To use more current language, by widening the array of choices available to producers and consumers, open trade promotes a more efficient economy. That, in turn, generates faster growth, more jobs, and an improved living standard. Open trade lowers inflationary pressures by increasing the supply of goods and services competing for the consumer's dollar. International competition exerts pressures on producers to improve the quality of products they sell to consumers. Finally, free trade minimizes the role of government, allowing businesses and individuals to make their own choices.

What is fast track treatment of trade treaties? It does not mean delegating the Senate's treaty power to the president. The power of the Senate to approve or reject all treaties (including those on a "fast track") remains fully in effect. This power is in the Constitution and it cannot be changed by statute.

Fast track merely speeds up the legislative process. It eliminates the possibility of changing a trade treaty after it has been presented to the Senate. All major tax bills are voted on by the House of Representatives under a similar procedure, called a "closed rule." Otherwise, no new major revenue legislation could be passed--it would get bogged down with amendments.

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