Contact l Sitemap

home industries issues reasearch weblog press

Home  » Issues » Trade Justice

US: Bush May Use Trade Pacts for Iraq Leverage

by Paul BlusteinWashington Post
March 18th, 2003

Maybe it's just a coincidence that the Commerce Department announced decisions in recent days to confer "market-based-economy" status on Bulgaria and Romania, two Eastern European countries that support President Bush's tough stance on Iraq.

And maybe a letter sent this week by a top House Republican to Chile's president, exhorting him to bring his reluctant government behind the U.S. position at the United Nations, has nothing to do with Chile's free-trade agreement pending in Congress.

But as those cases suggest, evidence is mounting that the Bush administration and some of its key congressional allies are prepared to use trade concessions for purposes of gaining leverage as diplomatic wrangling over Iraq grows more heated.

Until recently, Washington prided itself on avoiding the use of economic pressure to secure cooperation from foreign countries, with presidential spokesman Ari Fleischer declaring that "no quid pro quos" were being offered. One exception was the U.S. proposal to give Turkey a multibillion-dollar aid and trade package, justified as compensation for the losses the Turkish economy would probably incur from a war in Iraq. That deal is in limbo because Turkey's parliament rejected a bill that would have allowed U.S. troops to attack Iraq from Turkish soil.

Now it appears that trade carrots and sticks are being wielded -- albeit subtly -- in an indication that feelings run so deep on Iraq in some quarters in Washington that rifts on the issue may well affect economic ties.

A prime example is a letter that Rep. Henry J. Hyde (R-Ill.), chairman of the House Committee on International Relations, sent to Chilean President Ricardo Lagos, whose nation is one of the Security Council members balking at a resolution paving the way for war. The letter, dated March 10, makes no explicit mention of the U.S.-Chile free-trade agreement, which U.S. and Chilean trade negotiators struck in December and still needs to be ratified by Congress. But the inference is clear.

"Our two nations are on the cusp of a new relationship based on mutual respect and shared aspirations for a better life for all Americans and Chileans," Hyde wrote. "Mr. President, your strong and unequivocal support on this upcoming [U.N.] vote is vitally important. . . . We should not let the continued deceptions of Saddam Hussein divide us."

Asked if the letter is meant to suggest that congressional approval of the trade deal might get hung up if Chile fails to come around, a Hyde aide said that wasn't the intention. "I would be reluctant to draw a connection between this letter and pending trade matters," he said. "This letter really is intended to express to the government of Chile just how important the situation in Iraq is to the legislative branch."

Congress and the White House may find it difficult to tinker much with the vote on the Chile trade deal because its timing is dictated by law. But trade experts said the Hyde letter is a more substantive use of pressure than the bluster some politicians have hurled about boycotts and sanctions against French and German products.

"This is Chile's number one issue with us . . . and the administration would be foolish not to use it," said Greg Mastel, chief international trade adviser at D.C. law firm Miller & Chevalier. "I'm not sure the administration would take it so far [as to delay a vote]. But I'm sure they don't mind that the concept might be floating around in the heads of the Chileans."

A White House official, speaking on the condition of anonymity, said "we see no connection" between the Chile trade pact and Iraq. But Claire Buchan, a White House spokeswoman, declined to respond directly when asked whether countries' refusal to support Washington on Iraq might lead to repercussions in trade and other economic areas. "The president approaches this as a matter of principle and is hopeful that members of the Security Council will vote to disarm Saddam Hussein," she said.

Russia, which has said it may veto the U.S.-backed resolution, has been the target of more overt warnings from Washington about possible economic fallout, including an interview in a Russian newspaper this week in which U.S. Ambassador Alexander Vershbow admonished Moscow to "carefully weigh all the consequences."

On Thursday a senior U.S. diplomat in Moscow sought to calm the furor stoked by Vershbow's remarks, saying: "We are not making any threats. . . . The leadership on both sides wants to minimize any damage, but you can't completely isolate the wider relationship from any spillover."

For Bulgaria and Romania, receiving Commerce Department designation as market-based economies was welcome because it means the former communist states will have an easier time attracting foreign investment and defending themselves against complaints that they are "dumping" goods into the U.S. market -- that is, selling at unfairly low prices. The announcements followed a trip to those nations from Feb. 27 to March 1 by Commerce Secretary Donald L. Evans, billed by the administration as demonstrating "America's support and appreciation to these countries as part of the Administration's ongoing effort to pursue peace and diplomacy abroad."

Trevor Francis, a Commerce spokesman, disputed any link between the decision and the support given to Bush by Bulgaria, a Security Council member, and Romania. "This is a quasi-judicial process, which takes six to nine months. It isn't at the whim of an elected official," he said. But the U.S. decision on Romania is at odds with that of the European Union, which has not awarded the country similar status.

Washington Post correspondent Sharon LaFraniere contributed to this report from Moscow.





This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.