President Clinton, who won office as a centrist new Democrat, has seen his trade agenda stymied for more than two years by members of his own party who have twice turned back his efforts in the House to win authority to negotiate new global trade deals. Even Republicans, normally backers of free trade because of its support in the business community, have seen a growing split on the issue. While the United States last enjoyed a trade surplus in goods and services in 1975, the deficits recently have been skyrocketing as the Asian economic crisis has dried up export markets for American manufacturers and farmers. Such figures have politicians in both parties worried about a backlash, especially if the economic boom begins to slow and the unemployment level, now at a three-decade low, starts creeping back up. Each country makes and then sells abroad what it produces best and buys from other nations what they produce best.
Consumers benefit from the global competition, which drives down prices.
While workers in noncompetitive industries lose jobs, they find new employment in industries benefiting from the opening of overseas markets. For America, even the existence of perennial deficits was not viewed as a problem because foreigners have been happy to exchange their products for U.S. dollars, which they invest in U.S. financial markets, thus pushing American stock prices higher and helping hold down U.S. interest rates. But those rising trade deficits have triggered a flood of dollars into foreign hands, and some economists have begun to worry what the future might hold should foreign investors suddenly rush for the exits. The new commission, which plans at least four hearings in cities around the country over the next year before issuing its report, brings an assortment of views to its task. Members range from George Becker, president of the United Steelworkers union, to Carla Hills, chief trade negotiator in the Bush administration.