Bruce Bartlett

Last week, the Doha Round of trade talks collapsed. Future historians may well conclude that of all the Bush administration's economic mistakes, this one was the biggest. That is because we may have just seen the end of the free-trade consensus that has been at the core of U.S. international economic policy for both parties since World War II. The result may be a new era of protectionism that could be extraordinarily costly and painful.

Although Bush came into office mouthing all the proper platitudes about free trade and pledging his support for a new multilateral trade agreement, he made it very clear from the beginning that his heart was never in it. Bush refused to play hardball with Congress to get trade negotiating authority and instead imposed tariffs on steel imports to buy the last few Republican votes he needed.

This was a very bad deal for several reasons. First, the tariffs were unjustified on the merits. Second, Congress learned that Bush was not really a committed free trader and would cave on the issue if pushed. Third, it got the trade talks off on a very bad foot because the countries most hurt by the tariffs were precisely those whose support we needed to get a multilateral trade agreement.

Another problem with the steel tariffs was the utter contempt that Bush showed for existing international trade agreements. It was quite clear to all trade experts that the tariffs were illegal and would be ruled as such by the World Trade Organization. But Bush disingenuously insisted that the tariffs were legal and forced the issue to be litigated. He cynically reckoned that by the time the WTO issued its ruling, the U.S. steel industry would have gotten the breathing space it wanted and the tariffs could be rescinded after having accomplished their purpose.

While Bush's narrow goal of buying a few votes for trade-negotiating authority while temporarily aiding the steel industry with illegal tariffs worked, it came at a steep cost. The WTO did indeed rule the tariffs illegal, and the world learned that international agreements were nothing to Bush but scraps of paper to be ignored whenever it suited his domestic political needs. Obviously, this totally undermined the credibility of U.S. trade negotiators, making their job vastly more difficult before the multilateral talks even got started.

Bruce Bartlett

Bruce Bartlett is a former senior fellow with the National Center for Policy Analysis of Dallas, Texas. Bartlett is a prolific author, having published over 900 articles in national publications, and prominent magazines and published four books, including Reaganomics: Supply-Side Economics in Action.

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