Reprint permission from the June 3, 2002 issue of Crain's Chicago Business.
Although Chicago's economy is still sputtering, the city's next great growth spurt is already within reach, one inevitable result of geometrically expanding international trade opportunities.
After Chicago's first recession in a decade, business inventories are starting to return to normal, new factory orders are being booked at a healthier clip and durable goods production is on the rise. But the city is not the manufacturing hub it was 20 years ago, and the inventory bounce won't mean as much as one would hope.
So, where will Chicago's companies find their edge? Part of the answer is to do more business beyond our shores.
The city is bound to benefit from the political courage of congressional leaders who have been fighting for 15 months to expand President George W. Bush's trade powers to negotiate greater market access for U.S. goods, services and investment. The trade package they've crafted is enormously controversial and, even after its likely enactment into law by July 4, more conflict undoubtedly lies ahead.
Trade promotion, or "fast track," authority will generally require Congress to vote new trade pacts up or down without fussing with them. In exchange for the uncharacteristic passivity, it will reserve the right to more oversight than it otherwise might exercise.
Fast track's supporters see it as a common-sense compact between the president and Congress. They believe it will help trade negotiators strike deals that will enjoy the strong support of Congress and the American people.
But the congressional debate over the trade measure was strident, and it mirrors a raging national argument about the social costs and benefits of free trade.
Fast track's opponents predict that agreements to lower trade barriers will be negotiated at the expense of hard-won social and environmental protections. They warn that developing countries will be overwhelmed by imports, their productive capacities will be undermined and their employees will be put of out of work.
They are concerned that the governments of developing countries, fearing reprisals from their trading partners, will cut back on education, health care and other essential services. And they complain that basic labor rights will be manipulated by richer and more powerful countries for their own protectionist purposes.
The anti-globalization cause has unexpectedly been advanced by Oxfam, a British group whose mission, ironically, is to advocate development.
In its provocative new report, "Rigged Rules and Double Standards," Oxfam fairly criticizes the trade liberalization policies of the World Bank and the International Monetary Fund, which, in the 1990s, punished poor countries by forcing trade upon them. In China, for example, sweatshop conditions can easily be traced to trade-generating foreign direct investment.
But trade shouldn't be blamed for governments' decisions to tolerate the infringement of workers' rights or, for that matter, pollution. Nor, on the other hand, is free trade a panacea.
Fast track's most vocal proponents pretend that it is the litmus test of America's international leadership. Yet it's really only a procedural tool to clothe a president with credibility while his administration negotiates tricky multinational trade deals.
President Bush has called open trade a "moral imperative." It isn't, of course, but his well-intentioned hyperbole shouldn't be dismissed out of hand. Trade promotion authority is a very good thing, and so is the opening up of free markets.
Marc J. Lane is a Chicago lawyer and financial planner and an adjunct professor of law at Northwestern University School of Law. He can be reached at [email protected]