A major international conference in Miami next month will raise the politically volatile prospect of turning the Western Hemisphere into a giant free trade zone, sparking excitement from Florida backers who see a historic opportunity to forge closer ties to Latin America.
At the same time, plans for a Free Trade Area of the Americas have aroused furious opposition from labor unions full of working-class voters in the big electoral states of the Midwest, who fear such a pact would lead to further job erosion.
Workers whose jobs depend on exports stand to gain. Citrus growers in Florida and others who compete with foreign products stand to lose. The economic costs and benefits are enormous.
Faced with this treacherous thicket of tradeoffs, the Bush administration is expected to bargain hard for a trade pact behind the scenes while the president himself keeps a low profile on the issue until after the 2004 election. Bush's negotiators say they are striving for an accord by January 2005, a long-standing goal.
"Bush is going to push hard for an FTAA, then probably make it a big centerpiece for the early part of his second term, if he is re-elected," said Brent Nelsen, an economist and professor of political science at Furman University in Greenville, S.C. "I can see him trying for an agreement along about December 2004, something everybody can sign in January 2005, then have a year and a half of hard political bargaining to get it approved by Congress."
Until then, as the nation approaches an election year, Bush has little to gain in the political arena from trade negotiations, according to both proponents and opponents of free trade. The prospects are popular in some pockets of the country, notably South Florida, that directly benefit from trade in obvious ways.
But elsewhere, those most likely to vote based on this issue are opponents who fear their jobs will disappear into the black hole of globalization. "It's all about winners and losers," Nelson said. "Anytime you have economic change, there are going to be losers, the ones left behind, and in a political system they are going to make the most noise. Right now, this is an issue that can only hurt him."
Inconsistent record
The volatile mix of winners and losers helps explain Bush's inconsistent record on trade.
While eloquently talking up trade, particularly in the Americas, Bush alarmed free-traders by temporarily raising tariffs on foreign steel just before the 2002 congressional elections and by signing a farm bill brimming with import quotas to shelter U.S. growers from foreign competition.
The steel tariff, which helped Republicans win close House races in Pennsylvania, backfired by alienating trading partners and by driving up the price of steel, which hurt U.S. businesses and their workers who manufacture products made of steel.
Even the steelworkers union is unhappy because the tariff was limited and because the administration is likely to let it lapse after the next election. Most unions are upset with Bush anyway because of other labor policies and the debilitating loss of industrial jobs during his term.
"He didn't win any permanent friends," said Robert Bruno, associate professor of labor and industrial relations at the University of Illinois at Chicago. "Any modest goodwill, any space he made for himself in 2002, were blown to oblivion. I'm not sensing any goodwill whatever. They [steelworkers] did feel it was a political move on the part of the president, a gamble that the industry would come around by the next election."
The anti-free trade sentiment also has grown in much of the South, where textile mills have closed while clothing makers exploit cheaper labor abroad. Many Republican and most Democratic leaders in the Carolinas are bucking Bush on trade matters, even though foreign trade and investment have produced many new jobs over the past decade.
The jobless economic recovery since Bush took office, however, has fueled anti-trade resentments in much of the country. The labor department reported this month a net loss of 336,000 jobs this year. The nation's manufacturing sector lost 2.7 million jobs since June of 2000, according to the Institute for Supply Management.
Iowa, site of the first presidential nomination contest, lost 25,000 factory jobs over the past three years, a decline of 10 percent. In South Carolina, almost 18,000 manufacturing jobs disappeared in the past year.
"It's hard to watch plants close," said Professor Nelsen, a believer in free trade. "In some of the small towns that were wholly dependent on one textile mill, there is nothing left for people to do. You have to help Thelma, who doesn't have a job because the plant closed."
Trade advantages
While causing pain, freer trade also brings many advantages that are often indirect and unnoticed because they are scattered throughout the economy. Most Americans remain oblivious to the advantages of trade, pollsters and other observers say, making trade pacts a political liability at election time.
Removing tariffs and other trade barriers will lead to a greater variety of goods at lower cost to consumers, economists say. They also open foreign markets to U.S. goods, fostering a brisk business in exports and imports.
Over the past 10 years, U.S. trade with Mexico has nearly tripled in value. And the Northern industrial states, while losing manufacturing jobs, have gained others through new companies that deal in exports and imports across the border with Canada.
Florida, gateway to the Caribbean and Latin America, benefits from freer trade through its busy ports, with a ripple effect through the state economy. Trade ties also would strengthen commercial and cultural links between many South Florida immigrants and their home countries in Latin America.
Gov. Jeb Bush has already seized the opportunity to showcase South Florida's pivotal role in international trade. Preparing to play host at next month's conference, the governor has conferred with trade officials in Washington and rarely misses a chance to plug Miami's advantages as a potential future headquarters for FTAA.
On the other hand, citrus growers and other agricultural interests are alarmed about any deal that allows low-cost products, particularly from Brazil, to flood the U.S. market.
"And they [agricultural interests] are very well organized and always command a tremendous amount of support in Florida," said Ambler Moss, former ambassador to Panama and now director of the North-South Center at the University of Miami. "The benefits of free trade are more numerous, but they are more diffused, and its supporters are less organized than the people who are opposed."
"I get the impression that U.S. Trade Representative Robert Zoellick is pushing the trade agenda as hard as he can before the election year sets in," Moss said. "In effect, he wants to get a jump on the protectionists."
President's role
While taking some protectionist measures of his own, Bush has pushed through bilateral trade agreements with Chile and Singapore while consistently promoting the idea of a free trade zone throughout the Americas.
Bush might not appear at the ministerial conference in Miami next month when foreign ministers from the hemisphere gather to discuss an FTAA.
Even if Bush downplays trade, significant progress in Miami could turn it into a bigger issue in the presidential campaign next year in Florida and other states, depending on the position taken by the Democratic challenger.
Most Democratic candidates -- particularly Rep. Dick Gephardt of Missouri -- tend to oppose free trade agreements unless they include protections for American workers and requirements for trading partners to meet U.S. working conditions and environmental standards. A notable exception is Sen. Joseph Lieberman of Connecticut, who has taken up the free trade cause of the so-called New Democrats, following the policy of former President Bill Clinton.
The Democratic front-runner, former Vermont Gov. Howard Dean, once supported the North American Free Trade Agreement with Canada and Mexico, but now is courting labor unions and focusing on the loss of manufacturing jobs in the Midwest.
"Howard Dean has more aggressively linked labor standards and environmental standards to trade," noted George Gonzalez, a political scientist at the University of Miami. "Right now, it appears trade will be an issue, especially if the economy is lackluster."
William E. Gibson can be reached at wgibson@sun-sentinel.com or 202-824-8256 in Washington.
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