Grassley Calls for Multilateral, not Bilateral Trade

June 19, 2001

Sen. Charles Grassley (R-IA) Monday criticized the view that if federal trade negotiators don't have the authority to complete multilateral trade pacts, it is better to move forward with bilateral trade agreements. To do so would mean trade promotion authority would not have to be approved by Congress this year.

"I strongly disagree with this argument for two reasons. First, it is simply not good trade policy. The economic impact of bilateral FTAs are limited. Second, a bilateral FTA strategy can hurt the very foundations of the multilateral trading system. The same product gets different treatment depending upon where it is made and where it is sold. This can undermine the global trading system," he told the Global Business Dialogue Conference on the World Trade Organization in Washington.

"We need to make sure that the multilateral system stays strong. A successful WTO round will lower trade barriers in over 140 countries. These countries represent over 95 percent of world trade. A successful round will spur global economic growth. It can help lay the basis for a new era of prosperity," Grassley added.

TPA is part of a "comprehensive negotiation strategy," he said. He quoted U.S. Trade Representative Robert Zoellich who said "these (bilateral, regional and multilateral) issues are complementary. By moving on multiple fronts, we can create a competition in liberalization that will promote open markets around the world."

Grassley said, "Unfortunately, some policy makers argue that we can do one without the other. They say we can negotiate bilateral agreements now and wait for progress in the World Trade Organization or the Free Trade Area of the Americas until later. They also say that we can do these FTAs without Trade Promotion Authority. This conclusion is based on the belief that the political consensus for TPA simply does not exist in the U.S. Congress."

But the nation "cannot shape global trade unless we are empowered to sit at the global trade table. A trade policy that relies on bilateral trade agreements is ad hoc. It is settling for second best. It is shirking from the international trade challenges of the 21st century. We can do better."