Industry, Government Ally in Trade BattlesGovernment may work best when it works least - but the least it can do is to clear away tariffs and other trade barriers that cripple the ability of U.S.

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Industry, Government Ally in Trade Battles

Government may work best when it works least - but the least it can do is to clear away tariffs and other trade barriers that cripple the ability of U.S. workers and companies to sell their high-tech products overseas.

That's one area where President Bill Clinton, the Republican Party and high-tech industry see eye-to-eye and work hand-in-glove.

Overall, the progress during the last few years has been remarkable. The World Trade Organization, the Information Technology Agreement, the telecommunications deregulation agreement and a host of other treaties, agreements, standards and negotiations have helped U.S. information technology companies boost their exports from $77 billion in 1990 to $150 billion in 1996, according to a new study by the American Electronics Association.

That dramatic growth hides some areas of slow progress, such as in China, where total U.S. exports climbed only 2 percent in 1996 and 5 percent in 1997, or in Japan, where complex legal and personal barriers to U.S. high-tech companies have largely kept them from selling their products.

Of course, the U.S. government cannot open up trade barriers when U.S. companies don't care or won't produce suitable products - such as cars with steering wheels on the right. Companies must take the lead simply because selling products is their mission and barriers to trade cannot be identified until U.S. companies collide with them.

Moreover, companies can play a vital role in persuading foreign governments, businesses and voters to open up their economies to trade. They must produce the attractive products that consumers want, market services that local companies need, and show local politicians the policies that will spur their country's economic growth.

In all of this, the U.S. government can serve as a big brother - clearing away tariffs, trade barriers, protectionist rules and so forth.

This role is the same role that the government has played for hundreds of years. Just witness how federal government cleared away the obstacles to numerous other business deals, such as the transcontinental railroad system developed from the 1860s with federal financial backing and military protection.

Industry is already working closely with U.S. government officials in crafting negotiating positions, selling good products and by building support for trade-boosting policies here and abroad among citizens, executives and legislators.

Which brings up the abortive fast track debate in Congress, where President Clinton's ability to negotiate trade deals was hamstrung by the House of Representatives.

Fast-track authority was derailed by the unions, which know that their interests - and likely the short-term interest of their members - will be hurt by international free trade. After all, unions certainly won't gain if manufacturers can move their factories, and associated jobs, outside the United States. Indeed, global electronic commerce of services via cyberspace won't help the unions either.

In the next few months, Clinton and his deputies are likely to say all sorts of soothing things to the unions, and offer additional goodies to the anti-fast track legislators in Congress. These incentives will likely include extra environmental protection and extra economic aid for displaced workers. Union officials will demand protection for workers worried that their jobs and factories will be shipped overseas. Those protections are reasonable, say union officials, and are similar to the intellectual property protections granted to industry in other trade deals.

But fast track won't be approved before the 1998 mid-term elections, partly because legislators are reluctant to back something so unpopular in Congress and around the nation. Moreover, Clinton, the Democratic Party and the unions will have to bury their differences and hang together throughout 1998 - or be hung separately by the Republicans and their business backers in the November elections.

Perhaps the best hope for fast track lies with a vote after the 1998 elections when enough Democratic lawmakers could be brought over to the free trade side with a reasonable package of incentives.

In the meantime, it is up to industry to build support here and abroad - and to sell those products.



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