Seeking Enduring Prosperity

Under the policies of the present administration, many markets remain closed and U.S. trade deficits keep rising. New economic structures are needed to combine regional agreements with the development of global rules for opening the world economy. Collaborating with the Congress, a Republican administration will engage the Latin American and the Asia-Pacific nations, including a new dialogue with India, about political economy and free trade. As impoverished countries in Eurasia, the Middle East, and Africa accept freer economies, they will need the incentives of more open world markets. In addition, the United States can encourage the European Union and our Asian friends and allies to open more sectors to cross-investment and competition with the aim of freer trans-oceanic trade.

Republicans are confident that the worldwide trade agenda is full of promise. From the traditional goods of agriculture to the virtual links of e-commerce, gates can swing open. Tariffs should be cut further. The United States can back private sector efforts to streamline common standards and deregulate services, from finance to filmmaking. As the one economy with truly global reach, America can set the standards and be at the center of a worldwide web of trade, finance, and openness. If some nations choose to opt out, they will see how other countries accepting economic freedom will advance on their own, working together.

This is the Republican approach, and a critical dimension of a distinctly American internationalism. It goes beyond the old choice of private sector laissez-faire versus government regulation. Instead it is a vision of private initiative encouraged, not stifled, by governments. Private parties are already fashioning new ways to exchange goods and settle disputes but national governments still struggle to define many of the underlying rules. Republicans will also go beyond the old arguments that pitted bilateral deals against global trade rules. Instead they envision a comprehensive approach to the more interdependent global economy, one that uses bilateral, regional, and global arrangements to spur reluctant states to become more open or to be left behind. At the same time, innovative and flexible global rules and structures can facilitate regional progress.

Rooted in America’s political and economic ideals, this Republican blueprint promotes open markets and open societies, free trade and the free flow of information, and the development of new ideas and private sectors. These nurture the human spirit, the middle class, law, and liberty.

As the Cold War ended, Republican presidents fought off protectionist pressure, eased the debt crisis then facing developing countries, signed the North American Free Trade Agreement (NAFTA), and started to enlarge free trade arrangements throughout the Western Hemisphere. They promoted the Asia-Pacific Economic Cooperation (APEC) group that could bind economic interests across the Pacific. They then used these regional initiatives to bring the global trade talks of the Uruguay Round to the edge of conclusion. Thus America began to build on victory in the Cold War to build new structures for economic liberty as well.

For nearly eight years this promising construction project has languished half-built, the old blueprint shelved and no new ones drawn.

• The administration returned to the old rhetoric of managed trade — demanding government intervention from a Japanese government that needed less regulation in its sputtering economy, not more. On the verge of a foolish trade war, the administration backed down and dropped its quota demands.
  
• After failing for years to make the case for free trade, the administration finally got around to seeking fast-track trade negotiating authority, but could persuade only one-fifth of Democratic members of Congress to follow its lead.
  
• With China, the administration sought to link normal trade relations to human rights performance. Then it flip-flopped and dropped the linkage. They tried to bring China into the World Trade Organization as the Prime Minister of China visited the United States in 1999, but the political waters got choppy. So the administration reversed course again. Finally the administration turned to Republican leadership in the Congress to enact permanent normal trade relations with China.
  
• The administration refused to fight for passage of the Caribbean Basin Initiative that was designed to extend the benefits of free trade to some of America’s poorest neighbors. Congressional Republicans did the job on their own. They also enacted the Africa Growth and Opportunity Act as a companion to CBI.
  
• The failed leadership of the administration in international economics is exemplified by the humiliating debacle of the WTO meeting in Seattle — a conference the current administration first sponsored and then wrecked through its own indecision and inconsistency.

Republicans know that prosperous democracies depend upon the promise of shared economic opportunity across national borders. If the new globalized information economy provokes a fearful drift into national or regional isolation, hopes for a better world will vanish. Institutions founded in the Second World War and its aftermath built the basis for America’s position today, but those institutions, like the Bretton Woods monetary system and the General Agreement on Tariffs and Trade, were partly sustained by the Cold War. In this new century, the United States should devise new mechanisms to enable the private sector to unleash productivity, innovation, and a free flow of ideas.

Communities of private groups can achieve results far beyond the reach of governments and international bureaucracies. Given America's strong and diverse private sector, the United States, with close cooperation between a Republican president and a Republican Congress, can gain from the widening global influence of American citizens, businesses, associations, and norms. A Republican administration will have the opportunity to fashion, with like-minded nations, the international structures of sustainable prosperity for the next several decades.

The older international financial institutions should be overhauled but not scrapped. The International Monetary Fund and the World Bank should no longer stand for unelected elites imposing their often flawed solutions to tough problems by offering bailouts of corrupt officials and risk-taking investors. The IMF should concentrate on its original mission of promoting sound fiscal and monetary policies, advancing sound central banking practices, and easing global exchange rate adjustments. It should improve transparency and accountability, tackling corruption rather than contributing to it. The World Bank should continue to move away from counterproductive development schemes of the past to an agenda that promotes the provision of basic needs. This agenda will include support for structural reforms that will encourage self-help through efficient markets.

We will stand up for American workers and consumers by building on President Clinton's progress in including enforceable, internationally recognized labor and environmental standards in trade agreements. We will aggressively enforce our trade agreements with a real plan that includes a complete review of all existing agreements; immediate investigation into China's workers' rights abuses and currency manipulation; increased funding for efforts to protect workers' rights and stop child labor abuse; new reforms to protect the innovations of high-tech companies; and vigorous enforcement of U.S. trade laws. We will use all the tools we have to create new opportunities for American workers, farmers, and businesses, and break down barriers in key export markets, like the Japanese auto market and the Chinese high-technology market. We will effectively enforce our trade laws protecting against dumping, illegal subsidies, and import surges that threaten American jobs.

Trade Barriers