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Consoling Progress: How September 11 Affected U.S. Trade Policy

By Russell L. Smith, Willkie Farr & Gallagher

Once the shock and sadness of the September 11, 2001 attacks had subsided, Americans, and particularly decision makers and opinion leaders in Washington, began to try to understand the profound ramifications of a foreign terrorist attack on American soil. Trade and global economic policy emerged very quickly as a vitally important area. USTR Zoellick almost immediately made it clear that there was a direct link between trade, economic development, and the circumstances responsible for the frustration and hoplessness, and extremism that breed terrorism. Initially, Zoellick's point was to emphasize the need to pass Trade Promotion Authority legislation. While there were those in Congress and the press who criticized Zoellick strongly for allegedly using a national tragedy for political purposes, events belied that accusation. First, Congress passed TPA relatively quickly, and second, the Doha Ministerial that launched a new round of global trade negotiations was marked by a unity and determination to reach consensus on an agenda that could not have been more different from that of the disaster in Seattle two years before. Zoellick was proven both correct and pragmatic--events provided him with a principled goal, and he used the opportunity to achieve an agenda that ultimately help realize those goals.

The ultimate realization of a balanced multilateral agenda that encourages global economic growth and especially benefits the poorest nations is, however, encountering the practical hurdles of national self-interest. Differences over every substantive area of the Doha Agenda are for the time standing in the way of progress at the multilateral level. The knowledge this would happen and the understanding it was vital to continue to link economic development to the struggle against terrorism at all levels, has led to the other major trade policy initiative generated by the September 11 attacks--the U.S. effort to achieve a wide range of bilateral and regional trade agreements. One need simply review the list of nations and regions with whom the United States has or seeks to conclude agreements to understand the strategic and political motives of Ambassador Zoellick in undertaking this initiative.

Again, Zoellick is being criticized this effort. The criticism is especially harsh from WTO officials, who see bilateral negoations as a threat to the Doha Agenda and the WTO itself. This allegation is basically not justified. While bilateral and regional negotiations have their own problems, if conducted with a measure of sensitivity to mulitlateral impacts, they can make a positive contribution to WTO-related objectives. Certainly, to give just one example, breakthroughs on agriculture issues at the bilateral level can only be helpful to the Doha negotiations on that issue, which are essentially at a standstill. Just as importantly, bilateral and regional negotiations are clearly vital to post-September 11 U.S. geopolitical interests. There is no need to detail the very obvious reasons for many of the nations chosen to receive the benefit of U.S. bilateral and regional attention, from key allies like Australia, to key targets like Morocco. Singapore and Chile were ripe for quick success and thereby established precedents for more difficult, but ultimately more deeply beneficial agreements.

The progress that has been made in all trade negotiating fora, given the meager prospects post-Seattle, is in large part attributable to U.S. initiatives driven by the understanding that the September 11 attacks and the abiding presence of global terrorism demand a dramatic, long-term, and positive economic response. This will help to rebuild confidence in international relationships and to diminish the opportunities for such tragedies in the future.

Editor: Dr. Scott B. MacDonald, Sr. Consultant

Deputy Editors: Dr. Jonathan Lemco, Director and Sr. Consultant and Robert Windorf, Senior Consultant

Associate Editor: Darin Feldman

Publisher: Keith W. Rabin, President

Web Design: Michael Feldman, Sr. Consultant

Contributing Writers to this Edition: Scott B. MacDonald, Keith W. Rabin,
Jonathan Lemco, Jean-Marc F. Blanchard, Barry Metzger, Russell Smith,
Ilissa A. Kabak, Andrew Novo, Jonathan Hopfner, C. H. Kwan, Dominic Scriven and Andrew Thorson

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