ACTPN: Selling the Bush trade agenda

January, 2003: The Yankee Trader

By Greg Rushford

Published in the Rushford Report

Few Americans have ever heard of an inside-the-beltway acronym called ACTPN.  But the Advisory Committee for Trade Policy and Negotiations is important. This is the president’s premier private-sector advisory panel on international trade. Presidents need ACTPN to help them sell their trade agenda.

            A cohesive, focused ACTPN helped President Bill Clinton sell Nafta to Congress in 1993, and then the Uruguay Round that launched the World Trade Organization in 1994-95. But later in Clinton ’s second term, ACTPN not only lost its focus, but became split along protectionist lines. The resulting mixed signals from the business community contributed to the famous failure to launch a “Seattle Round” when WTO ministers met in that city in December, 1999. Two years of hopes for the world’s poor that trade liberalization would help better their lives were lost, before the WTO’s “Doha Round” got the talks back on track in November 2001.

            Last month, President George W. Bush announced that he would be appointing 32 people to serve two-year terms on ACTPN (for the full list, see the box that accompanies this article). It appears that Bush and U.S. Trade Representative Robert Zoellick do not intend to repeat Clinton’s mistake, which was mainly in trying to strike a politically correct — but unworkable — “balance” on the panel.

            Bush and Zoellick — looking ahead to the Doha negotiations, and also the just-concluded preferential trade deals with Singapore and Chile, which will go to Congress this year — have mainly reached out to well-credentialed mainstream leaders to help them sell the president’s trade agenda.

            A quick review of ACTPN’s history illustrates what’s basically motivating the Bush/Zoellick thinking.          

             When ACTPN was created in the Trade Act of 1974, America still enjoyed the bipartisan post-World War II consensus in favor of trade liberalization. ACTPN’s members for the next couple of decades were drawn mainly from the ranks of corporate America ’s blue-chip exporters, whose views then dominated the trade debate. In 1991, the first President Bush’s ACTPN was chaired by James Robinson III, who was then chairman and CEO of American Express and an important player in trade circles. Other solid ACTPN linchpins included corporate heads Donald Fites (Caterpillar Inc.), Edwin Artzt (Procter & Gamble), A.W. Clausen (BankAmerica Corp.), and Frank Shrontz (The Boeing Co. ).

             Meanwhile — beginning with Richard Gephardt and the Japan bashers and “fair” traders in the mid-1980s — America ’s free-trade consensus was slowly but steadily eroding. While corporate America still called the shots on trade in the crunch, other voices — in large part, protectionist voices posing as those of labor or the environment — were demanding seats at the table. And gradually, they began to succeed. Daddy Bush, for example, named some anti-trade figures to ACTPN, like Hank Barnette, who was then chairman of Bethlehem Steel and a red-hot foreign basher. But still, the protectionist voices were mostly muted. 

            This changed in the 1990s, when America ’s bipartisan support for free trade finally fell apart. In 1997, Clinton ’s picks to serve on ACTPN reflected how the president was trying to accommodate the new voices. Clinton was obviously hoping to build a consensus.

            While corporate types like Procter & Gamble’s John Pepper and IBM’s Louis Gerstner still served on ACTPN, Clinton brought in some of the most dedicated protectionists in the land to serve with — and bedevil — the CEOs. The Clinton appointees included Jay Mazur, of the Union of Needletrades, Industrial and Textile Employees (UNITE!); Lenore Miller, of the Retail, Wholesale & Department Store Union; George Becker, president of the United Steelworkers of America; and the AFL-CIO’s president, John Sweeney.

            All four labor leaders used their ACTPN credentials to advance their own anti-WTO agenda, instead of the president’s more liberal trade aspirations. Disgusted, fewer of the corporate types showed up for ACTPN meetings.

            Clinton also used ACTPN to reward some of the Democratic Party’s faithful, such as the mayor of San Jose , Susan Hammer, and George Ariyoshi, a former Democratic governor of Hawaii .

            Clinton even brought one man to ACTPN who could share his pain: Dr. W. David Leak, the chairman of Pain Net Education, Inc., based in Westerville , Ohio . Leak apparently came to the administration’s attention when he worked with Clinton ’s healthcare guru, Ira Magaziner, on the president’s (failed) healthcare program. When he got the ACTPN call from an aide to then-U.S. Trade Representative Mickey Kantor, Dr. Leak asked, “What do I have to do with international trade?”

            Not much. It soon became clear that Clinton ’s diversity ploy didn’t work. Instead of building a consensus on trade, the president helped wreck it. As the WTO’s December, 1999 ministerial meetings in Seattle approached, ACTPN became embroiled in internal bickering, its members unable to agree on what a new round of multilateral trade negotiations should look like. The panel split over divisive issues like antidumping, workers’ rights, and the environment — reflecting part of the broader ambivalence in the White House that ended up ruining the Seattle ministerial.

            It is difficult to review the list of the new Bush appointees without thinking that USTR Zoellick — who watched the Seattle debacle closely — is determined to restore ACTPN’s focus.  

            By and large, ACTPN has been stripped of the rabble rousers. In their places are credible representatives of the private sector. Not all of the appointees have always toed the Bush line on trade when the president has pandered to protectionists. It looks like Bush and Zoellick have made a serious effort to reach out to people who will help them sell a genuine trade-liberalizing agenda.

            A brief glance at some of the ACTPN members who will help set the tone:

            Steven Rollie Rogel is the CEO of Weyerhaeuser Co., a sophisticated multinational. Weyerhaueser — which has operations in both Canada and the United States — was distinctly unhappy with the president’s tariffs on Canadian lumber. By conrast, Clinton ’s ACTPN included John Dillon, the protectionist-inclined CEO of International Paper, who has lead the anti-Canada (and anti-consumer) softwood lumber war.

            Richard Rivera, the vice chairman of Darden Restaurants (Red Lobster, Olive Garden) is worried these days that the Commerce Department will slap on antidumping tariffs on shrimp imports, which would hurt American consumers along with his restaurant chain. Free trade is important to companies like Darden, which need to source their seafood in the global marketplace.

            Wythe Willey is the president of the National Cattlemen’s Beef Association. Okay, Willey is no free-trade purist, considering the embarrassment that the U.S. has beef quotas. Still, the cattlemen enjoy a great deal of respect in farm circles. And they are effective, particularly when compared to the protectionist tilt in the American Farm Bureau Federation. In Willey, Zoellick and Bush have turned to one important farm group that will be trying very hard to make the WTO’s Doha Round work.

            Larry Liebenow, who runs Quaker Fabric, has been outspoken about the harmful effects of trade protectionism on his industry. The American Textile Manufacturers Institute must be furious.

            Grace Nichols, the president and CEO of Victoria ’s Secret Stores (owned by the Limited), knows firsthand the unsexy economic effects of textile quotas and tariffs.

            Walter Bernard Duffy Hickey, Jr. is the chairman of Hickey Freeman Co., Inc. Here is a company that is a wonderful example of the benefits of trade — Hickey Freeman imports wool from places like Italy , and then makes suits that are exported around the world.

            Jean-Pierre Rosso is chairman of CNH Global, which makes tractors and combines. This is a sophisticated business entity. CNH is also one of the few American companies that has taken real steps to educate its employees  about the virtues of international trade. If every member of the Business Roundtable or the National Association of Manufacturers would suddenly become as serious about trade education, America ’s free-trade coalition would soon come off life-support. (Alas, for the hopes of the WTO’s Doha Round, few CEO’s seem to understand this.) 

            Richard Wardrop, Jr., the CEO of AK Steel Corp., refused to support the Bush steel tariffs last year. And in 1999, Wardrop also was the only U.S. steel executive to object to the Emergency Steel Guarantee Loan Program for the industry’s weak sisters. “AK Steel is solid proof that U.S. steelmakers can be globally competitive without a government handout,” the company boasts on its website. AK has also dropped its membership in the protectionist American Iron & Steel Institute. It is difficult to interpret Wardrop’s appointment to ACTPN as anything but a slap in the face to the steel lobby.

            This is the first real sign that I have seen that Zoellick really is serious about advancing as much free trade as his political masters will let him get away with.

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