Global Policy Forum

By Robert Lane Greene

If your interest in the subject of trade is a casual one, you might think George W. Bush is a true free-trader. To hear him talk, he sounds not only like he believes free trade is a good thing, but that it can save the world. Last week in Africa, he touted the virtues of free trade to that continent, saying in Senegal, "We will ensure that the nations of Africa are full partners in the trade and prosperity of the world." In May, he proposed a free-trade deal with Middle Eastern countries that are willing to adopt basic standards of good government, in the hope that it would lead them toward democracy. True, the president did slap big tariffs on foreign steel last year--but, his trade-loving supporters explain, that was only to build up capital in Congress for bigger, more comprehensive trade deals down the road. And, yes, the monstrous farm subsidies that the president approved in 2002 badly distort trade and hurt the world's poorest countries, but the president diverts attention from this by saying (correctly) that European farm policy is even worse.

Still, as frustrating as it is that George W. Bush caves to protectionist pressure whenever the going gets tough, there's an even larger problem with his approach to trade: Rather than accept the rules of an organized global system, he systematically undermines that system--by pursuing individual deals with individual countries and regions--when it doesn't suit short-term American interests. Bush, in other words, has apparently decided do go down the same unilateralist path in trade negotiations that his administration favors on international security. Over the long term, the result could be to deprive American workers of the benefits of new markets abroad, and American consumers of the benefits of cheaper goods at home.

The big loser of the Bush divide-and-trade strategy is the World Trade Organization (WTO), the only organization that can guarantee free trade. The administration has announced that, on July 11, it will appeal the trade body's decision that America's steel tariffs are illegal. That appeal has no hope--the steel duties are obviously the kind of protectionism the WTO is designed to prevent--and its effect will be largely to fan anti-WTO sentiment at home. Already pro-tariff voices have reacted with fury that belies more than economic concerns. The head of the United Steelworkers of America, Leo Gerard, has said that the ruling was "the latest example of unelected trade bureaucrats undermining national sovereignty and long-established provisions of global trade agreements."

The "unelected bureaucrats undermining national sovereignty" meme is a powerful one that unites the anti-globalization left with conservatives who abhor any hint of foreign restraints on American policy. The notion has a gut-level appeal: Somewhere some faceless foreigner is telling us what we can and can't do in America. But to level such claims at the WTO is farcical. The WTO, in one sense, doesn't really exist, at least as an independent actor in its own right. It is an agreement--a set of rules, established by all members--not to hinder trade. The WTO's own "unelected bureaucrats" are simply the arbiters, deciding who has broken those rules. When one member illegally limits trade, as in the steel case, the WTO tells other members they may go ahead with national sanctions, passed by individual governments like those of Japan, South Korea, and the EU, all complainants in the steel case. The WTO itself neither makes nor enforces policies; it is little more than a referee.

As a reflection of its members, the WTO is not unlike another international organization created largely by the United States to monitor compliance with global rules written largely by the United States: the United Nations. Could the Bush administration be showing the same disdain for the WTO it has shown for the United Nations? The signs certainly point that way. America is more than happy to pursue a case at the WTO that it thinks it can and should win, such as its current effort to get the EU to accept genetically modified foods. But when it appears that the United States may not get its way at the WTO, the Bush administration takes its ball, goes home, and plays its own game with the smaller kids it knows it can push around. Hence the push for individual trade initiatives with the Middle East, Africa, and Latin America. The United States has far more leverage with any of these alone than it does in a global, rules-based system.

American officials say trade deals with individual countries and regions are a building block, not a stumbling block, to global trade negotiations. Robert Zoellick has written in The Economist that America's bilateral and regional details "multiply the chances for success" of global free trade. But other countries aren't buying it. Once a leftist firebrand, Brazil's new president, Luiz Inácio Lula da Silva, has moved closer to neoliberal economic orthodoxy since coming into office, going so far as to make positive sounds about free trade in principle. But Lula hasn't hesitated to criticize American bullying, saying that "if trade is free, it will be free for everybody." He hopes, in turn, to unify the Latin American countries for more negotiating leverage with the United States--an effort that can be seen as little other than the product of years of American arm-twisting over the proposed Free Trade Area of the Americas. Countries in Africa and the Middle East may soon also come to resent Bush's peculiar form of "free" trade.

Toughness in trade negotiations is nothing new. Especially in democracies, there will always be pressure to get the "best deal," which is taken to mean exporting as much as possible while protecting your domestic industries from imports. But this isn't free trade in a meaningful economic sense. And, if pushed to its extreme, it quickly devolves into the kind of bitter finger-pointing that prevents important trade deals from being inked. What's particularly maddening about that scenario is that it's so unnecessary: Free trade, done fairly, benefits everyone, including the United States. The agreements policed by the WTO are America's best hope for getting the Europeans and Japanese to abandon some of their most protectionist practices, and to prevent truly unfair dumping of steel or farm products in the United States by developing countries.

But by carving up the world into individual regions or countries that America can punish, manipulate, or ignore as it sees fit (see Luke Eric Peterson's "Trading Down"), George W. Bush undermines the best hope for the real free trade he touted last week in Africa. This is a shame. Global free trade really can help both America and the world's poorest countries. The president should not only say this; he should act as though he believes it.

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