House protection mob spikes Gatt

LEGISLATIVELY speaking, these are the worst of times. As the US Congress began to limp out of town last week, its legislative litter lay scattered on the floors of the House and Senate like discarded trash: mining law reform, health-care reform, welfare reform, campaign finance reform, reform of special interest lobbyists, environmental superfund reform and now the General Agreement on Tariffs and Trade.

As one of its last cowardly acts, the US House of Representatives followed the Senate in putting off ratification of the Uruguay Round trade agreement. Self-styled Republican obstructionists engineered the delay, but the majority Democrats are equally to blame for sheer ineptitude in steering the legislation through Congress.

Who are the players in this black comedy and why has the world trading system been brought to the brink yet again over an agreement that is potentially the most freeing in nearly 50 years? Unfortunately, almost the entire cast is second-rate, led by former greats who have faded, almost-greats and those who never made it.

The roster includes the religious right, talk-show hosts who have suddenly discovered the job-sucking sound of trade pacts, the inevitable Ross Perot, and two courtly South Carolinans who speak in the soft, gentle tones of the post- reconstruction elite but use Yankee carpetbagging techniques to get what they want.

Senator Ernest Hollings, once a silver-tongued rising star, and Roger Milliken, the 77-year-old textile king from South Carolina, blocked the Senate vote on the Gatt round until after the US mid-term elections in November. Emboldened by their success, House Republicans, part of the 'principled obstructionists' movement led by minority leader Newt Gingrich, engineered a similar delay to prevent President Bill Clinton claiming a legislative victory before the elections.

Were it not for the huge potential damage, it would be possible to stand back and enjoy the chicanery. Even Ralph Nader, the veteran consumer crusader, showed up for the melee looking a little worn, his sharp rhetoric blunted as he lined up with the protectionists and Ross Perot to fight Gatt.

What is at stake is not mere political theatre but the possible breakdown of 50 years of bipartisan US congressional support for expanding world trade. Even if, as expected, the delayed Uruguay Round agreement squeaks through in special sessions called after the elections, the damage will have been done. By uncorking the protectionist genie for purely partisan gain, those who have played with the Gatt accord may have unleashed forces that will be hard to stop.

Already, President Clinton has lost fast-track authority to ensure timely passage of future multilateral trade agreements without damaging congressional amendments that can undermine original intent. This opens up a Christmas tree of goodies in future US trade agreements, if the administration fails to restore the provison. Now that curbs on special-interest lobbyists have been defeated, the increasingly protectionist bent in Congress is unlikely to be stopped.

Meanwhile, the 'little guys' for whom these protectionist crusaders claim to be acting are somewhat bewildered by the whole affair. When asked in polls if they are for free trade and new job creation, average Americans vote overwhelmingly in favour.

This is what Mr Clinton and his predecessors in the White House have argued since 1986 in trying to sell Congress on the Uruguay Round. The message is consistent: this agreement contains the biggest tariff reductions in history and will therefore create a more level playing field for rich and poorer countries and a bonanza of new jobs as world trade expands.

However, these voices have been drowned out by the Moral Majority, sophisticated users of talk shows, business groups - and even some environmental organisations - which fear the loss of US sovereignty. Some of these forces were lined up against the North American Free Trade Agreement (Nafta), but more powerful pro-Nafta business lobbyists prevailed.

Today, it is impossible to drive to work without hearing on the radio that foreigners are beating up on US companies in world trade, that no one else plays by the rules dear to the US, that American jobs are being sucked away by unskilled, underpaid hordes in other countries and that US economic security is in grave danger. Jingoism, populism, nationalism, protectionism - every tool of the 1930s political arsenal is being employed, but in more sophisticated fashion.

After a daily barrage of this, no wonder little guys want to fight back. Also inevitably, as the election approaches, the free traders in Congress 'are losing heart', according to Representative Jim Kolbe, a Republican who broke ranks with his party to fight with the administration for the Gatt round.

Mr Kolbe and other supporters acknowledge they have been outmanoeuvred by those who have ensured that 'voters are beginning to question the idea that the more trade the better'.

It would be easy to put the blame on obstructionist Republicans, if the ineptitude of Democrats was not so apparent. Having finally negotiated a deal on Gatt, the administration left the securing of its passage to the eleventh hour, trying to twist arms and make deals when the damage had been done.

Meanwhile, the Democratic managers of both houses of Congress were outsmarted. The result is a tough after-election battle to ratify the agreement while world trade hangs in the balance.