Clinton Trade Representative: Remove Trade Authority in ‘Short Run’ from Trump

A train carries steel slabs at the Krupp Mannesmann steel factory in Duisburg, Germany, on March 2, 2018. (AP Photo/Martin Meissner)

WASHINGTON – Michael Kantor, former U.S. Trade Representative under President Bill Clinton, and William Brock, former U.S. Trade Representative under President Ronald Reagan, said Congress should not permanently take trade authority away from the executive branch.

Kantor, who served from 1993 to 1996, said he would only support temporarily removing the authority while President Trump is in office.

“In the short run, short period, it’s a good idea. But let me warn everyone –  I guess I’m getting older – Bill Brock and I will tell you a fellow Tennessean of ours, Cordell Hull, in the ’30s, after the Smoot-Hawley Act passed and exacerbated the recession, went to Roosevelt and said ‘we’ve got to take trade away from the Congress of the United States,’ and we did, and it was smart. It was a good move and it’s been there ever since in the executive branch,” Kantor said last week during a Center for Strategic and International Studies discussion on trade.

“You’ve got to be careful of what you wish for. The unintended consequences could be quite difficult,” he added. “Just because we have now in a year and a half or 20 months an awful situation doesn’t mean we should change where we’re going and how we think of how our structure works – that doesn’t mean it’s been working well and it should. So in the short run, should the Congress raise its head and its objection? Yes, absolutely. In the long run, I think keeping trade in the executive branch is really a critical matter.”

Brock, who served from 1981 to 1985, argued that Congress is “utterly incapable” of conducting trade policy, so lawmakers should proceed with caution when considering trade restraints on the executive branch.

“I really do worry about [Section] 232 and the ability of the president to use national security as an excuse to do anything. The utter ridiculousness, if that’s a word, of suggesting that Canada is a threat to the security of the United States doesn’t drive me wild. Name a few others that would be put on the list that are allies and friends and supporters and share a common burden with us,” he said.

“I happen to think that you could and should constrain the use of that tool, if not eliminate it. But going beyond that, I do think that Congress is utterly incapable, with all respect, of conducting trade policy. You need an executive branch that has a coherence to it – that has a common approach that is articulated, for better or for worse, by the president if that person is elected,” he added.

Brock continued, “But Congress couldn’t conceivably negotiate a trade agreement, ever, ever, ever. So I think what we’ve got is a pretty good system as long as we make it work, but be very careful about allowing abuse of things like the security argument.”

The moderator of the discussion asked if President Trump’s new “direction” on trade is “a one-off thing” and a “hiccup that will go away when he’s not the president anymore” or if this is the “beginning of a long-term shift in American thinking toward more managed trade and more protection.”

In response, Charlene Barshefsky, U.S. Trade Representative from 1996 to 2001, said that “globalization is here” and “it isn’t going anywhere.”

“Why do I say that? Because the first wave of globalization post-war was driven by the West and it was trade-based. We’re in a different phase of globalization now. It’s not driven by the West. It’s driven in part by China and East Asia. It is not trade-based, per se, it’s digital. It’s digital and this technological change, and the change in the sites of growth and economic power will continue to drive globalization,” she said.

“So, the only question for the United States is, are we in or are we out? Do we want to lop off 95 percent of the world and decide we’re just fine, the 5 percent of us, or do we want to play? And if we’re going to play, well, whose rules, by whose rules?” she asked.

Ronald Kirk, U.S. Trade Representative under President Barack Obama from 2009 to 2013, said politicians are going to continue blaming “job loss” on trade deals with countries like Mexico and Canada in order to win support in states such as Michigan, Pennsylvania, Ohio.

“Those are states traditionally that believe they have been hurt the most by trade. And you’re going to have people, in order to get elected, articulate some strategy about trade in which they blame all the bad stuff on these bad things that we’ve collectively done, and promise that if we just do them differently the jobs are going to come back. I’d like to believe what we’re living through now is more what I like to call Twitter rage than articulated long-term policy and hopefully that will correct,” he said.

“But that underlying anxiety, I think, played a huge weight, not only in the outcome of our last couple of presidential elections, but it’s the same sentiment you are seeing in Brexit,” he added. “And so our collective challenge is whenever we talk about the benefits of trade, start with jobs, and there are jobs. There are going to be different jobs. They are going to be in the service economy.”

Susan Schwab, who served as U.S. Trade Representative from 2006 to 2009, explained why she opposes increased trade tariffs.

“Anyone who pretends that U.S. imposition of tariffs isn’t hurting the U.S. economy is fooling themselves. However, it is part of a – let’s start with a tactic. We’ll find out if it’s part of a strategy at some point,” she said. “It has gotten the attention of the Chinese authorities, which I was unable to do, which you all were unable to do. Maybe the outcome will be a change in behavior on the part of the Chinese that in the long run will result in a positive outcome for the U.S. and the rest of the world.”

Schwab continued, “None of us would have gone into trade negotiating had we not been optimists. Otherwise, we would have slit our wrists somewhere along the way. So that’s my take on tariffs but the point is, if they are left in place, all we’ve done is hurt ourselves. If they ultimately are leveraged, as the president has talked about, let us see what they do with it.”