WASHINGTON — Mickey Kantor knows all about bruising battles with Congress to get a major trade deal passed — he was U.S. Trade Representative under President Bill Clinton from 1993 to 1996 when the North American Free Trade Agreement was passed.
NAFTA is once again coming into the spotlight — and not in a good way — as presidential candidates, including Hillary Clinton, point to the trade agreement as a cautionary tale and the reason they are opposed to the Obama administration’s own legacy-defining deal, the Trans-Pacific Partnership trade agreement, which aims to remove barriers to trade to encompass nearly 40 percent of the world’s gross domestic product.
Kantor, now a partner at the Washington law firm Mayer Brown, talked about the prospects of Congress ratifying the 12-nation TPP, his thoughts on Hillary Clinton’s opposition to it and the impact of the presidential election on TPP and the debate over global trade.
WWD: What are the prospects for TPP? It has run into some opposition on the Hill. Do you think it can pass this year?
Mickey Kantor: I think it can. I think the time to do it is during the lame duck session. It makes it easier politically for a number of folks to vote for it. Also, it will be beyond the heated and somewhat uninformed rhetoric of the campaign regarding trade. That makes a big difference.
It is enormously important that we do it for a number of reasons, not the least of which is we have never, the United States, turned down or defeated a trade treaty. Our international relations, our connections to other countries, how we influence the rules, not just trade but other areas, would be severely harmed if we turn down this treaty.
WWD: There are national security arguments made for this agreement. If, for whatever reason, the agreement fails and is never ratified by enough countries, where does that leave the U.S. in the global trade realm?
M.K.: It leaves us as a laggard, as a follower, as someone who will not write the rules. If we don’t write the rules, if we don’t create a rules-based trading system, someone else will and you can guess who that is going to be.
We need to provide leadership. We need to work with China. There is duopoly in the world in China and the United States, the two greatest powers on earth. The way we connect most positively is trade — the movement of people, the movement of goods and services, the movement of money. It would be a serious setback for the U.S. and Asia if we were to turn this treaty down.
WWD: There has been a lot of antitrade rhetoric and it is at fever pitch at this point. Has that damaged at all the prospects for TPP? Has it slowed it down this year?
M.K.: It has certainly slowed it down and made it more difficult. There is no doubt about it. Most of what you hear is uninformed and wrong. It is astonishing to contemplate that one of these [candidates] could sit behind that big desk in the Oval Office and be faced with the reality that we live in a globalized world driven by technology and we need to create the rules of the road if we’re going to have a rules-based trading system.
WWD: Is it a surprise to you that someone like Hillary Clinton has come out in opposition or is it part of presidential primaries as we’ve seen historically?
M.K.: Some of it is driven by the primaries. Hillary Clinton, who happens to have been my friend for a long time — almost 40 years — has always been somewhat of a trade skeptic. She was not exactly a supporter of NAFTA. She was obviously not going to say anything negative because it was one of her husband’s major priorities as president. Therefore, she was not going to say anything, but she and I had probably a number of arguments about it.
Now, she has voted for trade treaties and against trade treaties. When I was USTR, we did 200 treaties in four years. Were all of them perfect? Of course not. They need to be updated. The world changes. People are looking at it now in retrospect. Therefore, of course NAFTA is not perfect. We did the best we could with Canada and Mexico. They were not sitting at the table as supplicants. We had to negotiate with them what was in the best interests of everyone and get it done. So in the end, has it been as big a success as we articulated? Probably not. But was it critical to do? Yes it was. It’s not even a question.
WWD: What would the world be like with Donald Trump as president, who has been leading the antitrade rhetoric and calling for imposing tariffs on China? What happens if we become a more isolationist country?
M.K.: You can’t be isolationist in a global economy. Here’s the challenge: Donald Trump [doesn’t] understand when [he walks] into that office the first thing that happens is [he] will change [his] rhetoric, [his] approach and [his] support for trade treaties. I guarantee you. No president since the Second World War has opposed trade treaties. Not one — no Republican, no Democrat.
People tell us we’ve not been tough enough or not focused enough or not made treaties work. It’s just not true or actually accurate.
Let me say it again, all of these — NAFTA, the Uruguay Round and others — need to be continually updated. I think that’s one of the weaknesses we’ve had is that we’ve not gone back and continued to update these treaties. We learn from them. There are things we don’t cover or they are not written well enough. Maybe the investment provisions need to be looked at more carefully. Maybe we need to look at what we do not just on the environment and labor but on corruption — make an anticorruption standard that is part of a trade treaty, enforce them.
WWD: Do you think this administration has lost the argument with the American public about the economic benefits of trade since we have heard so much concern coming from everyday Americans? Have they lost that argument?
M.K.: When we started the NAFTA debate, way back in the dark ages of 1993 — the debate over ratification — only one-third of the American public supported NAFTA. President Clinton, Vice President Gore, others weighed in and fought for it. They went to the public, especially the president. By the time we got to the vote, 66 percent supported NAFTA.
How did it jump so much? People don’t know much about international trade treaties. American people are very smart. They may not pay attention all the time. When they heard Clinton and Gore articulate what this was about, why it was important, they came around very quickly.
WWD: Will the same hold true for this one, TPP?
M.K.: I believe if the president continues to emphasize TPP and talk about it in broader national security terms, economic terms and in political terms about how important it is, it is clear to me we can bring the public around and the Congress.
WWD: If the deal is not passed this year, do you feel it’s lost or is there still an opportunity next year?
M.K.: Oh boy. There will be an opportunity and, depending what happens in the election and who is president, I would be very concerned if it didn’t pass this year.
WWD: Do you feel it has enough votes or that they can work to get enough votes for it?
M.K.: I think it’s close right now. I think it is better off after the election and before the next president is inaugurated — in a so-called lame duck session — than it would be right now.
WWD: If it slides to next year, are the prospect a little dimmer?
M.K.: Not dimmer, but I think different. We don’t know what is going to happen in this election. We don’t know what the Congress is going to look like. I think that it becomes more problematic only because there are so many unknowns. That’s why I think not dimmer, but just different.