Out of Africa
SOUNDBITE
Spring's dominant trade story was the fight over permanent trade relations with China. But one week before the China vote, President Clinton signed another bill to expand trade among the United States, Africa, and countries in the Caribbean. The Trade Development Act of 2000, which combined the African Growth and Opportunity Act and the Caribbean Basin Trade Partnership Act, abolishes tariffs on clothes made in Africa with American yarn and fabric and increases the limits on other textiles from Africa.
Washington Editor Michael W. Lynch talked with the bill's co-sponsor, Rep. Edward Royce (R-Calif.), in late May.
Q: Why a trade bill directed at Africa?
A: We have endeavored to reduce tariffs around the world. In 1950, the average tariff, worldwide, was 40 percent. Today, it's 4 percent. The exception to that rule has been trade with Sub-Saharan Africa, where the average tariff on textiles is still 18 percent.
Q: You've been at this for years. Why did it pass now?
A: Our arguments about moving Africa from aid to trade made it difficult for people to say, "We're all for foreign aid to Africa, but we're against opening our markets to African goods. Don't let them sell any cloth or textiles in the United States." It's difficult to argue that the only approach we could have to Africa is one of dependency.
Q: Supporters of trade always highlight increased exports, not the benefits of inexpensive imports. Why is it so tough to sell trade based on the idea that if people elsewhere can do something more efficiently, we ought to let them?
A: People don't immediately grasp comparative advantage. It took Adam Smith a generation to convince the British Empire that mercantilism wasn't in its interest. We've had the same resistance even with the evidence right before our eyes: the lowest unemployment numbers and the greatest creation of wealth in recent U.S. history.
I've joked with colleagues that if I put in the Smoot-Hawley Act today, we could find a number of representatives who would co-sponsor it before they realized it was the same bill that helped set off a worldwide depression. This is a struggle that has gone on for years, and will continue to go on. What I saw in Seattle convinces me that there is tremendous pent-up hostility that is directed not just at trade but at liberalizing markets and technology. There is this reactionary element in society. This is a battle of ideas.