It's fast-track time again. For the first time since 1994, Congress faces the decision of whether to grant the president the authority to ignore the will of Congress in negotiating new trade agreements. According to conventional wisdom, free traders should support fast track while the protectionists should favor a Congressional role in sheltering domestic industries from the wiles of international competition.
Do we really have to plod through this rhetorical nonsense again? For the past year, the Bush administration has shown itself very effective in bringing about protectionist policies for the steel and softwood industries while doing nothing about the continued problem of high tariffs to protect sugar and textiles, to say nothing of the litany of trade sanctions this administration backs. If ever there was a good time for protectionists to favor fast track, this is it. By only having to pressure the trade office, as versus hundreds of Congressional offices, they save lobbying costs.
For the same reason, free traders should be wary of fast-track authority. It is frequently said that fast track is necessary so that the Bush administration can achieve its "ambitious trade agenda," which amounts to negotiating more regional trade deals like the Free Trade Area of the Americas. This is not free trade. Like Nafta, this is discriminatory trade motivated by the hope of bringing about a regional trade cartel to compete with Asia and Europe. The object here is to divert trade from its market path so as to bring about centrally planned outcomes, not open up the world to commerce in whatever shape it may take.
The effort to gain fast-track authority has already been enormously costly. The Bush administration deal on steel, already repudiated in private by his closest aides, was widely seen as an attempt to buy off support for fast track. But what is the point of caving in to such pressures in order to purchase the freedom to not cave in to such pressures? And this sell out is just the beginning. The Bush administration has also given its support to a Senate bill that would impose sanctions on countries that weaken labor and environmental regulations. A true free-trade administration would not only oppose such a bill; it would be calling for foreign countries to deregulate their economies.
Can Congress be trusted with trade authority? Of course not. No politician can be trusted with any authority. But from the political point of view, while Congress can be parochial and greedy, it is less effective in actually bringing about protectionism than the executive. Every disastrous trade bill in American history, from the Tariff of Abominations to Smoot-Hawley to the latest steel deal, has been brought about by the executive branch. There is no a priori reason to assume that legislatures are more protectionist than presidents, and plenty of a posteriori evidence to suggest that the executive branch is more of a problem than is generally assumed.
There is a larger point. The free-trade agenda, properly understood, is part of a larger package of liberal economic policies that are associated not with centralized political power but with decentralized institutions. To centralize power in the name of freedom is akin to putting a crime syndicate in charge of rooting out corruption. It is the normal state of politics that the more centralized it is, the more damage it does. Fast-track authority centralizes power and is therefore part of the problem.
Part of the impetus for granting the president fast-track authority comes from a wholly inappropriate analogy between trade and war. The belief is that just as the president is commander-in-chief during wartime, and thus needs no Congressional authorization for his activities (that's not what the Constitution says, by the way), the president should also be trade-negotiator-in-chief in peacetime. This is one of the great fallacies of our age. Trade is peaceful and proceeds on the basis of contract, exchange, and productivity. War is violent and proceeds on the basis of coercion and destruction.
No doubt those opposed to fast track in the upcoming debate will be denounced as "isolationist" while those favoring presidential power will be heralded as "globalist." Don't let anyone use the word "globalist" without demanding to know what he means: global trade (good) or global war (bad). Neither should anyone be permitted to speak generally of "isolationism" without specifying whether he means military isolation (good) or economic isolation (bad). Why is it so difficult to get the mix right that George Washington celebrated in his Farewell Address: commerce with all, political dealings with none?
Among the most urgent political priorities of our age is the separation of economy and state. The denial of fast-track trade authority, and the scuttling of these diverting and centralizing trade deals, takes us in the right direction. If we then have to deal with hundreds of petty tyrants from the legislature who would deny consumers and producers their rights, so be it. On the road to freedom, there are few short cuts. Consolidating power sure isn't one of them.
April 29, 2002
Copyright © 2002 Mises Institute