Documents menu

Fast-Track Defeat a Blow to 'U.S. Model'

By Jim Lobe, IPS, 12 November 1997

WASHINGTON, Nov 12 (IPS) - President Bill Clinton's failure to win from Congress "fast-track" authority to negotiate new trade agreements with Chile, and other foreign partners, is a major blow to the U.S. vision of prosperity through global commerce.

Combined with other recent developments, the setback to Clinton's administration raises questions about the long-term political viability of the so-called "US Model" of open markets, deregulation, and privatisation. Clinton's defeat at the hands of his own party suggests that opposition to economic liberalisation is growing stronger, some critics believe.

"The backlash against globalisation has exerted its full force," says John Cavanagh, director of the Institute of Policy Studies, a progressive Washington think tank. At the very least, "it signals that the rapid accumulation of free-trade agreements and corporate-led globalisation will be substantially slowed.'

According to Cavanagh, both Clinton's defeat and the recent turmoil in East Asian financial markets should serve to open space for a broader debate on alternatives to the current model. The debate will be led by labour unions, whose re-emergence as perhaps the most dominant force in the Democratic Party, strikes a stunning blow against Clinton's efforts to transform it into so- called "New Democrats."

It is not only Clinton's fast-track defeat that suddenly has opened new vistas for neo-liberal critics. They cite the examples of elections in France, Italy, Argentina, and Mexico in which the left campaigned and won against neo-liberal policies, as evidence that the tide may have turned against the reigning orthodoxy worldwide.

"The collapse of the East Asian 'miracle,' the backlash against NAFTA (the North American Free Trade Agreement), and fast- track's defeat mean we are at a completely new phase of the international economy," says Jerome Levinson, former counsel for the Inter-American Development Bank here. "The neo-liberal model has exhausted itself."

Anticipating a replay of the 1993 NAFTA debate, most political obnservers expected Clinton to prevail against labour, and environmental and consumer interests on the issue of fast track - which had the backing of Republicans and the giant multinational corporations.

Fast-track authority gives the president the power to negotiate trade agreements without worrying that Congress will later amend them when they are submitted for ratification. Instead, Congress must vote to either or accept or reject the final package as submitted.

Since he submitted his package in September, Clinton argued that every president in the last quarter century has been granted such authority. To maintain unemployment at 24-year lows and strong economic growth, Washington must negotiate new accords to open more foreign markets to U.S. exports, he declared.

Clinton, however, caved in to demands by the Republican majority that fast track authority not include strict provisions - including sanctions - designed to protect worker rights and the environment in countries with which Washington wanted to reach new trade agreements. That decision came back to haunt him.

The absence of such protections in his proposal proved fatal to his hopes of winning over even a respectable number of Democrats in the House of Representatives.

Led by Minority Leader Richard Gephardt, four out of five House Democrats told the White House they would oppose the package, and then stood firm against the biggest lobbying blitz waged by the administration in three years. At the same time, the House Republican leadership failed to coax 60 of their 228 members to go along with Clinton, ensuring that the president would fall short of victory if voting had gone forward.

An embarrassed Clinton says he will bring up the measure again early next year, but most analysts believe that Congressional elections next November make fast-track's fate in 1998 much more problematic. "Politically, it will probably be next to impossible," said Republican Senate Majority Leader Trent Lott.

In the immediate aftermath of Clinton's decision Monday to withdraw the package, Washington pundits pointed to the tactical mistakes made by the administration - including the delay in submitting the package, its failure to win over the U.S. public and co-ordinate well with the business lobby. But many observers believe that these criticisms do not address the much larger forces at work.

They see the outcome as a dramatic demonstration that, despite the economy's continuing strong performance, U.S. workers remain angry and anxious about their futures in a globalised world.

"He blamed the big labour bosses, but the big labour bosses can't get out the big grassroots effort that defeated this bill," said Levinson. "People realised that their life and their work was at risk in this kind of deal, and Clinton failed completely to understand how pervasive this fear is."

Especially damaging to the fast-track cause was the continued unpopularity of NAFTA, which is widely perceived as having been a job-loser for the United States. Fast-track's failure to include protections on worker rights and the environment - at the same time that it guaranteed protections on investment and intellectual properties - reinforced the critics' message that Clinton was putting the interests of capital ahead of people.

The outcome also puts paid to Clinton's hopes for transforming his party into "New Democrats" dedicated to small government and neo-liberal economics, effectively divorcing it from its labour- and minority-led past.

The labour unions' leading role in defeating fast track, coming less than three months after the first successful nationwide strike in more than 15 years, marks their re-emergence as a powerful political force explicitly opposed to the "U.S. Model."

It's worth recalling that only last January, AFL-CIO president John Sweeney, described the US Model to the World Economic Forum at Davos as "a highly costly, very toxic export, dangerous to the health and welfare of working people and national economics across the world." (END/IPS/jl/mk/97)