Zoellick to face challenges both at home and abroad

Date: 15/03/01

By Simon Taylor

JUST before Bob Zoellick was named the top US trade official, there was a brief, but somewhat global, media firestorm over whether he would be a second-class citizen in the new administration.

Rumours were rife that Trade Commissioner Pascal Lamy's former sparring partner in G7 negotiations and one-time deputy chief of staff to Bush senior would find his new post relegated to a sub-cabinet-level rank. The threat proved short-lived as influential members of the House Ways and Means Committee made it clear they were not prepared to see the US Trade Representative lose power - especially with so much sensitive negotiating to be done.

But when Lamy met his old friend and adversary in Washington last week he had good reason to be thankful that Zoellick is calling the shots on trade policy across the water. There is no doubt that personally and ideologically, Zoellick is as committed to global free trade as any Harvard-schooled Republican.

Nevertheless, Lamy knows that his fellow marathon-runner faces tough battles on two fronts if he is to win US support for launching a new round of multilateral trade talks this year.

Zoellick's first job is to convince a sceptical Congress to give a mandate to Bush to negotiate new trade deals. But the fight for the essential Trade Promotion Authority (TPA), which replaces the old Fast Track approval required for the US agreement with Mexico and Canada and the last WTO deal, will be hard.

Zoellick needs bipartisan support in the almost evenly-divided House of Representatives for TPA, meaning he will have to win over quasi-protectionist Democrats convinced that global trade will erode labour standards, for example by encouraging competition from overseas steel and car makers. It is not just the Democrats whom Zoellick will have to square. Leading members of his own administration's party, such as Senator Jesse Helms, see any signing of international trade agreements as a shameful surrendering of US sovereignty. This will increase Bush's reliance on middle-ground lawmakers from both parties, an increasingly endangered species.

The recent omens for a renewal of the bipartisan wedding vows made under Clinton are not good, not least because of the lingering rancour from the Bush-Gore election debacle.

In fact, steel promises to be Zoellick's biggest problem. Asian countries, led by Japan, are adamant that some rewriting of WTO rules on anti-dumping duties is their bottom-line demand in a new round. But the sensitivity of the issue and influence of the sector in the US political establishment will make it hard for Zoellick to be seen as giving away any of Uncle Sam's rights to protect its foundries against foreign competition.

From Lamy's point of view, Zoellick's other headache is US industry's preference for regional free trade and investment agreements over multilateral shows like the WTO. Bush has made it clear that his immediate priorities are extending the existing North American Free Trade Agreement with Mexico and Canada to other parts of Latin America.

The new president is travelling to Quebec on 20 April for a meeting of leaders from North and South America to see whether it will be possible to wrap up negotiations on a Free Trade Area of the Americas by 2003, a deadline which will inevitably absorb much of Zoellick's time.

Lamy, no doubt, would prefer him to spend it on flights between Brussels and Geneva. But at least the Frenchman knows his opposite number is someone he can do business with in the long run. When the pair appeared together at a Washington news conference last week, Zoellick underlined their rapport by sporting a badge emblazoned with the US and EU flags.

Article forms part of a survey on EU-US relations.