Interpreting NAFTA : The Science and Art of Political Analysis, by Frederick W. Mayer

 

4. Domestic Politics Matters: The Fast Track Fight

For Mexico and Canada, once Salinas and Mulroney committed to NAFTA, the decision was made. For the United States, the situation was different. Under the U.S. Constitution, Congress, not the president, regulates foreign trade. To negotiate a NAFTA, Bush would first need to obtain “fast track” negotiating authority from Congress.

Fast track is the standard process by which Congress delegates authority to the president to negotiate on its behalf and commits itself to both to limited debate (hence “fast track”) and to an up-down vote, without amendment, on the agreement reached by the president. The process had been invented in 1974 for the Tokyo Round of the General Agreement on Tariffs and Trade (GATT). Since then, Congress had granted the president fast track authority for free trade negotiations with Israel and Canada, as well as for the ongoing Uruguay Round of GATT. Historically, Congress had granted this authority with relatively little fight. The process of obtaining negotiating authority had never been the focus of protracted political maneuvering. Indeed, outside the small circle of trade insiders, no one even knew what “fast track” was. Certainly few envisioned this previously obscure process would become a defining issue for the negotiations to follow.

The 1988 Trade Act had authorized the fast track for three years, with a provision that gave the president two more years if he requested it, subject to a veto by a majority of either house of Congress. Bush needed to ask for the extension by the beginning of March 1991. By then, a remarkably diverse collection of interest groups had mobilized to oppose fast track or to insist that conditions be attached to its approval. Predictably, some opposition came from industries that stood to lose in free competition with lower-cost Mexican producers (glass and brooms, for example) and from organized labor, which (rightly or wrongly) felt threatened by the prospect of competition from cheaper Mexican labor. But these predictable interests were joined by a host of organizations concerned about the environment, food safety, family farmers, human rights, worker rights, and other issues—all newcomers to the politics of trade.

Together, the opposition nearly scuttled NAFTA before it began as nervous members of Congress balked at the prospects of facing down angry constituents. In February 1991, fast track looked dead. Only a major effort by the Bush administration succeeded in reversing the tide, and in May, Congress voted to grant the president two years of negotiating authority; the president had won. But the critics had not entirely lost. Their efforts linked new issues to the trade agenda and forced Bush to agree to address the labor and environment issues they had raised. In so doing, they changed the course of the international negotiation and transformed the domestic politics of NAFTA.

This chapter details the fast track fight of 1991, seeking to answer three questions: Why did fast track, a previously obscure procedural matter, become such a heated issue? How were advocates for environment and labor able to force linkage of their concerns to the negotiating agenda? Why, in the end, did the president obtain the authority he sought?

 

Getting Started

At the end of 1990, the Bush administration established an interagency group to coordinate its fast track efforts. The group was chaired by Josh Bolton, general counsel at the Office of the United States Trade Representative (USTR), who had been pushed by Bob Zoellick for the role. Ideally the process would have been run out of the White House, but as Zoellick recalled, “Josh knew substance, knew the Hill, knew the agencies.”

The task facing the administration was created and structured by U.S. trade law: The president needed fast track negotiating authority from Congress before he could begin the NAFTA negotiations. From a presidential perspective, the fast track provided great advantages. Most notably it ensured that once the president negotiated an agreement and proposed legislation to implement it, Congress would be forced to vote on the implementing bill without amendment and within no more than ninety legislative days. Unfortunately for the administration, the fast track process expired June 1, 1991. By the end of 1990, all could see that the NAFTA negotiations would not be completed before the expiration date. But fortunately for the administration, when Congress last renewed fast track in 1988 (primarily for the Uruguay Round of the GATT), it provided for the possibility of a two-year extension. To get it, the president needed to make a formal request on or before March 1, 1991. The extension was automatic unless either the House or the Senate voted to deny it within ninety days.

In the fall of 1990, however, there was little reason for the administration to be concerned about a vote in May. Despite rumblings from labor, there was not much to suggest that the opposition would include more than the usual suspects. Chip Roh, the Assistant USTR for North American Affairs, later recalled the mood: “In November and December we were making early rounds on the Hill, talking with Ways and Means and Finance Committee staffers and other key committees. There was not much interest. Everyone said, ‘That's next year's issue.’; There was nothing to indicate significant problems.”

 

The Opposition

On January 15 a coalition of labor, environment, farm, consumer, religious, and human rights groups held an all-day forum on the Hill to bring attention to their concerns about fast track and NAFTA. Its organizers had not expected to garner much attention. But the Washington trade community packed the room, and C-SPAN was there. The event started a buzz around Washington: Something was going on here.

The traditional view of the trade policy-making problem is that concentrated protectionist interests tend to outweigh the more diffuse consumer interest in free trade. ₁ In the case of NAFTA, however, free trade threatened few economic sectors. Farmers of certain agricultural products, most notably citrus fruit, sugar cane and sugar beets, and warm weather vegetables such as tomatoes, and manufacturers in currently protected labor-intensive sectors such as apparel, brooms, and glass were rightly concerned about increased competition. Compared to the collection of industries who stood to gain from free trade, however—banks and other financial institutions, the big three automakers, corporate agriculture, virtually the whole of American big business—these potential losers did not look like much of a political threat. Where necessary, too, the blow could be softened with promises to negotiate longer transition periods or other measures to deal with special circumstances. ₂ The significant opposition, therefore, came not from the traditional source—protectionist producers—but rather from a new coalition of labor unions, environmentalists, and grassroots groups.

Labor Opposition

Labor unions did not just oppose fast track in the spring of 1991, they excoriated it. The response was partly visceral on the part of the rank and file and partly strategic on the part of the union leadership. Workers' reactions to the prospect of free trade with Mexico were conditioned by their negative experience with U.S.–Mexico trade to date and their general suspicion of the Bush administration. Savvy union leaders recognized the significance of the procedural vote for their ability to influence the terms of the eventual agreement and were determined to make a stand against the extension of fast track.

In 1965, Mexico and the United States established a program intended to help develop the border economies of both countries. The maquiladora program allowed U.S. businesses to locate assembly operations in free trade zones along the U.S. border in northern Mexico and to import components from the U.S. duty free, assemble them in Mexico, and reexport them to the United States without tariff. American businesses began moving operations from the Rust Belt to northern Mexico to take advantage of cheaper labor.

The program began slowly, but when the peso was devalued after 1982, the number of firms grew rapidly. By 1989, around 1500 maquiladora plants in Mexico employed nearly 400,000 workers. ₃ Workers in Mexico earned a fraction of what their U.S. counterparts earned, perhaps one eighth, perhaps less. ₄ The stated purpose of the program was to encourage economic development on both sides of the border and to reduce immigration pressures. For the unions, however, the real purpose was clear: to allow U.S. manufacturers to substitute cheap Mexican labor for expensive U.S. workers.

In the mid 1980s, the AFL-CIO (American Federation of Labor and Congress of Industrial Organizations) began an information campaign about the maquiladoras. Union workers in the 1980s were suffering from layoffs and corporate downsizing. Here was a perfect example of what was really happening. Big multinational corporations were moving jobs to places where workers came cheaper. A November 1986 AFL-CIO News article entitled “Runaways to Mexico Spread Economic Woe,” was typical:

For American business, it's a bonanza. The Mexican government provides soldiers and police to stifle union organizing. On-the-job safety regulations are virtually nonexistent or rarely enforced. But the deal has been costly for an American workforce already battered by the influx of foreign-made goods. In the past decade alone, by the most conservative estimate, the jobs of 90,000 American workers have gone south of the border. ₅

The stories about companies going to Mexico, or using the possibility of a move to force union concessions in negotiations, gave workers a way of focusing their anger about what was happening to them. According to Mark Anderson, research director for the AFL-CIO, workers “connected the layoffs and downsizing in the United States to transfers in production to Mexico in the mid 80s. It was a very visible thing to members. It wasn't theoretical. They knew about Mexico.”

What made matters worse in union eyes was that the Reagan Commerce Department was actively promoting business relocation. In 1986, union protests spurred Congress to cut off funds to the offending program. A private consulting firm took up the slack with the Reagan administration's blessing. In December that year, a group of union activists led by William Bywater, president of the International Electrical Workers union, marched to the Commerce Department demanding to see Secretary Malcolm Baldrige. On the steps, an angry Bywater told reporters what he would say to Baldrige when he saw him: “I'll tell him to keep his nose out of Mexico and pay attention to the United States.” ₆ Baldrige was not available.

By the annual AFL-CIO convention in Bal Harbour, Florida, in February 1988, the maquiladoras warranted an official policy statement from the executive council.

The Maquiladora Twin-Plant Program has resulted in the loss of tens of thousands of U.S. jobs, economic depression along the border and other areas of the United States, and sweatshop conditions in Northern Mexico for hundreds of thousands of young workers—a workforce cynically selected as most susceptible to intimidation and least likely to organize and militantly defend its rights. ₇

The statement marked a subtle shift of emphasis. The early focus of the education efforts was on the cost to American jobs. Gradually, however, the spotlight was turning to the plight of the Mexican workers and to the environmental degradation that surrounded them. The unions focused especially on toxic dumping. The AFL-CIO produced a film about toxic dumping at a Steepen Chemical plant in Mexico and worked with ABC's “20/20” and NBC's “Dateline” on features about toxic hazards. At the annual Bal Harbour meeting in February 1989, the AFL-CIO Executive Council released a report entitled “The Maquiladoras: The Hidden Cost of Production South of the Border.” The report documented toxic poisoning, inadequate waste water facilities, denial of health and safety protection, pollution of drinking water supplies, and endangerment of the ecosystem. ₈ In 1989, too, the union was a founding member of the Coalition for Justice in the Maquiladoras, along with a number of grassroots environmental and citizen groups, including the Texas Center for Policy in Austin; the Border Ecology Project in Nagos, Arizona; and the Quaker American Friends Service Committee. A central focus of the Coalition's efforts was investigating and publicizing workplace and environmental conditions in the maquiladoras.

The new focus on the environment was strategic. Mark Anderson later described the reasons for the shift: “Environment became a means of drawing attention to poor company practices in the border. Nobody cared about a worker losing his job in Illinois. They were much more sensitive to toxic dumping in Mexico.”

It was against this backdrop of awareness of the maquiladoras, of stories about runaway plants, exploited workers, and toxic dumps, that union workers heard President Bush announce his intention to negotiate free trade with Mexico. “All of that activity made this issue different from other issues,” recalls Mark Anderson. “We already had two or three years of education about maquiladoras with our members. When NAFTA surfaced our first reaction was, ‘Bush wants to make it worse. This was piling on.”

In the fall of 1990, unions faced a strategic decision: Would they simply oppose fast track authority for NAFTA or would they hold out the possibility of support (or of more tempered opposition) in exchange for some concessions. Union leaders recognized that simply blocking agreement was not enough. “The irony was that we needed to do things with the Mexicans to deal with the problems on the border,” recalled the AFL-CIO's Anderson. “If we simply defeat[ed] NAFTA, we [wouldn't] make things better. The status quo was no good.” There is some evidence that top union leadership considered making a deal for better worker adjustment assistance. In August 1990, Jules Katz, the Deputy USTR who would be the chief negotiator for NAFTA, called Tom Donahue, Secretary-Treasurer of the AFL-CIO, to tell him that President Bush had decided to go ahead with the negotiations. Donahue warned that the unions would fight. As Katz recalls, “I said, ‘I hope we can work together.’ Donahue said there is a price attached: adjustment assistance. I said, ‘I'm with you on that. I'll fight for it in the administration.’”

It is unlikely, however, that there was ever a serious possibility of such a deal. The more prevalent union view on adjustment assistance, recalled Mark Anderson, was “adjustment to what? Adjustment is an attractive theoretical concept, but if the economy is not producing stuff to increase general employment, it loses its allure.” Donahue and Katz had no further conversations about such a quid pro quo.

The problem for union leadership was that union rank and file was so spontaneously and unambiguously negative that it precluded any possibility of bargaining with the administration. Union leaders are elected officials; they were in no position to make a deal. Steve Beckman, chief strategist for the United Auto Workers (UAW) on NAFTA, recalls:

From the beginning of the fast track debate, this was a visceral issue with members. NAFTA was very much a gut issue. Members understood that it was a direct threat to their jobs. If we had wanted to make a deal we couldn't have.

The union leadership also recognized clearly that fast track limited their ability to affect the terms of the agreement. They had learned from experience with the Canada–U.S. Free Trade Agreement (CUFTA) that once the administration had fast track, it would be able to negotiate what it wanted and force the Congress to take it or leave it. They needed to kill fast track, whether they wanted to push for a better agreement or whether they wanted to block any agreement. By the end of 1990 union lobbyists were on the Hill urging fast track's defeat.

The Environmental Awakening

Although the environmental problems of Mexico were of great concern to many environmentalists, the Washington environmental community was slow to link its interest in these problems to the upcoming trade negotiation. Unlike labor unions, environmental organizations in the United States had no history of involvement with trade negotiations. They had largely ignored the CUFTA. They had no staffers who dealt with trade and environment issues. It is all the more remarkable that from this beginning environmental organizations would succeed in making their issues concerns in the fast track debate and would become important players in the process.

The roots of this success were with a small group organized in the spring of 1989 by Stewart Hudson, a young staffer at the National Wildlife Federation (NWF). Hudson put together an “Ad Hoc Group on Trade and Environmentally Sustainable Development” to talk about the idea that trade, and trade agreements, might be bad for the environment. Of immediate concern was the ongoing Uruguay Round of the GATT. Participants in Hudson's group were worried that international trade agreements were becoming ways of attacking domestic environmental laws, which could be struck down as trade restrictive by unaccountable trade tribunals.

After the Bush-Salinas announcement in June 1990, the group saw a great opportunity. Mexico provided a way to make the connection between trade and environment clear. The maquiladora program, which some depicted as a trial run for a free trade agreement, had resulted in numerous easily documented environmental problems. The population explosion around factories in the program had overwhelmed the local environmental infrastructure, leading to obviously unsanitary living conditions. As these environmentalists saw it, the environmental horrors of the maquiladora demonstrated how free trade without accompanying environmental provisions was harmful to the environment.

Second, the environmentalists argued, companies fleeing environmental regulation in the United States for the “pollution haven” of Mexico illustrated the necessity of making comparable enforcement a part of any free trade agreement. The environmentalists pointed to the case of furniture makers in Los Angeles who had moved to Tijuana to avoid installing ventilation hoods in their factories and to statements by Mexican recruiters of American businesses who made low regulatory compliance costs part of their pitch to attract new investment.

And, third, they believed, Mexico provided a clear example of how trade law might undermine environmental law: the case of tuna and dolphins. The U.S. Marine Mammal Protection Act requires that tuna be caught in ways that do not harm dolphins. In June 1990, a small environmental group filed suit to block imports of Mexican tuna on the grounds that Mexican fishers did not protect dolphins as required by the U.S. Marine Mammal Protection Act. The environmentalists won and imports of Mexican tuna were banned. In October, the Mexican government decided to challenge the ruling on grounds that it was an illegitimate restraint of trade prohibited by GATT, and alarm bells went off throughout the environmental community. If this act could be challenged in this way, environmentalists feared, so too could other environmental, health, and safety standards.

In November, Hudson circulated a draft document laying out the National Wildlife Federation's concerns. The paper made the rounds of environmental organizations in Washington and found its way to several interested Congressional offices. Still, the rest of the environmental community did not rush to get involved. As Hudson recalled, “I couldn't get the mainstream environment groups interested.”

 

Building a Coalition

One of the key early members of the ad hoc group was long-time labor rights activist Pharis Harvey, head of a small outfit called the International Labor Rights Education and Research Fund (ILRERF). Harvey had been involved for years in the effort to get “human rights and labor rights factored into trade.” The effort had been frustrating. Although the 1988 trade act had made the opening of a discussion between labor and trade a negotiating objective, Harvey felt that no one in the Bush administration had taken it seriously: “They just went through the motions with a wink and a smirk. It was clear that this wouldn't go anywhere unless we had broader international cooperation.” When NAFTA came along, Harvey saw an “opportunity to build a regional discussion of the issue and the potential of getting more serious consideration. [NAFTA] was an opportunity to get it into the public debate.”

As the issue of fast track extension approached, Harvey focused on the process itself. The issue was “largely about participation and process,” he recalled. “Most of us viewed fast track as a truncation of the democratic process. [It was] a way in which the administration kept debate closed.” Moreover, he didn't buy the argument that fast track was necessary to NAFTA. “I understand it with GATT when you have 140 countries, but I thought it was overreaching in a bilateral agreement,” he said, forgetting Canada for the moment.

The strategic problem was how to engage the public in the dialogue he desired. Harvey contacted his old friends in Canada who had been active in fighting the CUFTA. They brought a delegation to Washington to talk about how you went about building a broad citizen's coalition. As Harvey recalls, they had two pieces of advice: “First, you need to develop a strong international effort. They felt they had failed because they had no effective counterpart in the U.S. Second, don't just say no. Integration is going to take place with or without you. If you simply oppose you will be dismissed.”

In mid-November 1990, Harvey, Stewart Hudson, and Cam Duncan of Greenpeace decided to hold a one-day forum January 15, 1991, on Capitol Hill to attempt to draw attention to their concerns. Their idea was to have panels on labor, environment, and agriculture issues, with representatives from Canada, Mexico, and the United States on each to demonstrate the international nature of their concerns. Members of Congress, their staffers, and the press would be invited. On November 20, the idea was discussed at a larger meeting of the growing coalition of potential opponents who had met to discuss how best to press for inclusion of various social concerns in the free trade negotiation. The group now included, in addition to the NWF and Harvey's ILRERF, representatives of the AFL-CIO, the UAW, Greenpeace, the Natural Resources Defense Council (NRDC), the Family Farm Coalition, and the Community Nutrition Institute, among others.

On the basis of past experience, neither Harvey nor Hudson expected much of a crowd for their January 15 forum. Harvey's wife prepared coffee for a hundred people. When they walked in that morning, however, more than 400 people packed the room beyond capacity. It seemed that the whole Washington trade community had turned out. In addition to a huge turnout of Capitol Hill staffers and representatives of various nongovernmental organizations, “every trade lawyer in town was there,” recalls Harvey. Hudson described it later as just “dumb luck, the synergy of labor, environment, and other issues coming together.” But he also pointed to a particular Washington phenomenon.

You have to understand that there is an industry in town representing business clients. As I looked around the room, I realized that the [Washington trade lawyers] of the world are our allies. They want it to become an issue! What happens is a buzz. You could just see the memos going out to corporate clients. “There is a big force out there opposing fast track. If you retain us ”

Initially there was almost no media coverage, but C-SPAN had been there and the network would eventually broadcast the forum three times. And word began to get out. The Bureau of National Affairs International Trade Daily reported the event January 20th. Washington insiders now knew about it. The forum hadn't represented a real coalition, just provided evidence of how widespread the opposition was. But on February 12, Harvey and Hudson and other participants from the January forum held a press conference at the Methodist Building on Capitol Hill to announce the creation of a coalition of sixty-two environmental, labor, religious, consumer, and community groups intent on opposing fast track authority unless the administration agreed to address the host of social concerns they represented. The coalition took the name Mobilization on Development, Trade, Labor, and the Environment, or MODTLE. (They would later be dubbed a “motley crew” by editorial writers.) Now there was a real coalition that might cause fast track some problems.

 

We've Got a Problem Here: Rethinking Strategy in the Administration

As the political landscape changed, the administration fast track team was faced with the challenge of reassessing the situation and of devising a new strategy to cope with it.

In January 1991, Nick Calio, Deputy Assistant to the President for Congressional Relations, joined the team. Calio was worried. Because Calio was responsible for the House of Representatives, he knew there was trouble brewing. He was particularly concerned about what position Congressman Richard Gephardt (Democrat, Mo.) would take. As the majority leader and as a long-time player in trade matters, Gephardt could be very influential with House Democrats. If he opposed fast track, it might not win. Moreover, Gephardt was increasingly critical of fast track.

“The agreement was in trouble in January,” Calio recalled. “I knew it was a big problem.” Calio shared his assessment with the Bolton group. Bolton agreed that they had a problem. “I was not exactly the bearer of bad news,” Calio recalled. “They knew there were problems. But they were not attuned to what it would take to win.”

In February 1991, as members of Congress began to focus their attention on fast track, critics drowned out supporters. At hearings in both houses, witnesses representing an extraordinary spectrum of American political institutions gave members as earful as they spoke of their concerns about NAFTA's potential impacts on the environment, labor rights, workplace safety, human rights, drugs, and immigration—in addition to more traditional concerns about economic impacts. At the Ways and Means Committee hearing February 21, the AFL-CIO's Tom Donahue issued a thundering condemnation of fast track for NAFTA:

This is an unusual occasion. It is not every day that a sovereign nation seeks to negotiate an agreement that is certain to destroy the jobs of tens of thousands of its citizens. We believe that the substance of the administration proposal is harmful and ill-conceived, and we believe that American workers will pay for it with their jobs. We are alarmed by the effort to limit discussion and debate, the effort to circumscribe the role of Congress in what will be a wholesale restructuring of the economy of North America. ₉

At the same hearing, David Ortman of Friends of the Earth (testifying on behalf of Friends as well as the National Wildlife Federation and the Texas Center for Policy Studies) said that these environmental groups were not prepared to support fast track unless environmental concerns were addressed as part of the negotiation. Pharis Harvey said “an agreement that deals only with narrowly defined trade and investment rules may have serious adverse effects on the environment, on labor standards, on human rights, on agricultural interests and consumers, both in the United States and Mexico.”

Other members of the opposition coalition also testified. Linda Golodner, of the National Consumers League and the Child Labor Coalition urged that Congress be “given the opportunity to ensure that child labor issues, as well as human rights, environmental, agricultural, and labor concerns are an integral part of any negotiated trade agreement.” Joseph Kinney of the National Safe Workplace Institute said, “it would be a real travesty to put pressure on a regulatory climate that we produced by having unfettered, unthoughtful, in effect homicidal trade relations with Mexico.” ₁₀

House Democrats were coming under increasing pressure to oppose fast track. In their view, they didn't owe the Republican president George Bush anything and they were hearing bad things from the people who normally supported them: labor, environment, citizen's groups, and the like. For members not versed in the details of trade policy, the composition of the opposition gave them pause, at the very least. The Democratic National Committee, responding to union pressure, went on record in opposition to fast track. Members were beginning to stake out positions that the administration might not be able to meet. Meanwhile, Majority Leader Gephardt was sounding more like someone poised to oppose fast track. In a speech to the UAW February 6, he said “I believe every member of Congress should be against the negotiation of a treaty with Mexico that doesn't stand up for the rights of American workers.” ₁₁

Dan Rostenkowski (Democrat, Ill.), Chairman of the Ways and Means Committee, and his Finance Committee counterpart, Lloyd Bentsen (Democrat, Tex.), both supporters of NAFTA and defenders of the fast track process, had been around long enough to know that this was not business as usual. NAFTA appeared to be touching a nerve that was generating opposition from a host of new players in trade politics, many of them traditional Democratic constituencies. Union opposition was bad enough, but when joined with environmentalists and others, the resulting coalition made Democrats very nervous. Both chairmen set up ad hoc whip groups to poll the membership and see what the vote looked like. The preliminary counts were encouraging in the Senate, but the situation in the House was precarious.

Josh Bolton, Nick Calio, and others in the administration had been making the rounds on the Hill and coming to the same conclusion. As they assessed it, their strategic problem had two aspects. First, they needed to find a way to buy time. The opposition had the momentum and control of the debate. Members were beginning to lock themselves in. “In February and March, our main objective was to get members to keep their powder dry,” recalls Calio. Then, second, they had to gain control of the debate and find a way to give members some political “cover,” particularly on the environmental issues. They believed they could win without labor's support and they could win without environmental support, but the combination of labor and environment was formidable. “We could see that environment was a problem if labor was a problem,” Calio recalled. There was, of course, no prospect of winning labor support. The administration concluded that they had to find a way to neutralize the environmental issue.

The new strategic importance of environmental issues gave one group in the administration an important opening. Back in August, Dan Esty, a young assistant to Environmental Protection Administration (EPA) Administrator Bill Reilly, had noted the rising attention to trade and environmental issues. The EPA had never been part of the discussion on trade matters. Here was an opportunity. Esty wrote a memo to his boss. Esty recalled, “I told him, ‘Environment is going to be a big issue with NAFTA. That creates an opportunity for us. Let's make it a top focus.’” Reilly agreed, and gave Esty a green light. Unlike most staffers at the EPA, Esty was no stranger to trade issues. Before coming to the EPA he had been a trade lawyer at Arnold and Porter, a top Washington law firm. He knew Josh Bolton and others at the USTR. Esty suggested that Reilly approach Carla Hills about setting up an EPA-USTR trade and environment working group. Reilly took the idea to Hills, and she agreed that it would be wise to get out in front on the issue. A small working group started meeting late in the fall.

Now with fast track in some trouble, the administration needed to reach out to elements of the environmental community. Esty and Reilly knew where to turn. Reilly had been president of the World Wildlife Fund before coming to the EPA, and he knew the leadership of the environmental organizations. He had been talking especially to his friend Jay Hair, president of the National Wildlife Federation. He had reason to believe that the NWF and other “moderate” environmental groups might come around to support fast track. Those groups saw NAFTA in much the same terms that the EPA did, as an opportunity. On February 19, Esty set up a meeting for the staff at the USTR and representatives of six environmental organizations, including the NWF.

The USTR's Chip Roh later described the meeting as “culture shock.” This was new terrain for both sides. The trade officials knew next to nothing about international environmental issues. The environmentalists knew less about the arcane world of trade negotiations. Nevertheless, the meeting began a dialogue that would continue throughout the rest of the NAFTA process.

The Bolton group had one more problem: convincing the Bush administration to do what needed to be done. The administration's initial response to the environmental charges had been simply to refute them. “Our first reaction was to say: ‘They shouldn't be opposed to this,’” recalled Chip Roh. In January, Carla Hills had been clear that labor and environmental concerns should not be considered as part of the free trade negotiation. Hills had now come around to the view that the administration would need to do more, indicating in her testimony before the Ways and Means Committee on February 20 that the administration was willing to consider bilateral social issues “relating to the environment, drug enforcement, standards in the workplace, and emigration,” and that it was currently studying how to deal with these issues, “whether that be in the trade agreement or in a separate document.” ₁₂

During the last weeks of February, the administration team talked frequently with staffers at Ways and Means and Finance about their respective problems. On March 1, Carla Hills met with Dan Rostenkowski and Lloyd Bentsen to discuss the situation and how to deal with it. Rostenkowski and Bentsen told Hills bluntly that they wouldn't have the votes to pass fast track unless the administration gave them some help in countering labor and environmental objections. Hills understood the situation and expressed willingness to work with the chairmen on this, but she intimated that she was having some difficulty convincing others in the administration to be flexible, most notably Bush's chief of Staff, John Sununu. They agreed that it might be helpful if Bentsen and Rostenkowski went on record with their concerns. Over the next few days, staffs worked to iron out the details. Rostenkowski and Bentsen would write to the president, urging him to consider certain of the problems raised by the opponents of fast track and requesting a report on how the administration intended to respond to them. Drafts of the letter went back and forth. It was cleared with key Republicans on the trade committees.

On March 7, Chairmen Rostenkowski and Bentsen delivered an open letter to the president. The letter stated sympathy for the “legitimate concerns” raised by members of Congress, including “the disparity between the two countries in the adequacy and enforcement of environmental standards, health and safety standards and worker rights.” These issues, it said, should be addressed “either within the agreement itself or through some appropriate alternative context, within the same time frame as the trade negotiations.” The chairmen requested that the president provide an action plan to Congress by May 1. “Such an action plan is essential to the Congress as we deliberate on your fast-track request.” ₁₃

The letter was a stroke of political genius. First, it solved Carla Hill's internal problem. “We needed a vehicle so that we could move forward to start to allay fears of potentially anti-fast track vote,” recalled Calio. A request from the chairmen of the two most important committees in Congress could not be denied. Without Bentsen and Rostenkowski, fast track was dead.

Second, the letter bought time. While the administration considered how to respond to the Bentsen-Rostenkowski request, they could ask members of Congress not to take a position. “The March 7 letter let us say: ‘Wait, we're working on it. Give us a chance,’” recalled Calio. And it made it more difficult for outside groups to attack NAFTA. Although there was never any possibility that the labor unions would support fast track, the administration was talking to them about the action plan. Calio recalled, “It was worth the effort of talking with [labor]. While they were talking, they couldn't blast it.”

Third, the Rostenkowski-Bentsen letter regained control of the issue by framing it in terms that the administration could meet (and the Mexicans accept). The letter carefully mentioned only environment, health and safety standards, and worker rights (it had nothing on wage disparities, for example) and did not insist that these matters be addressed in the NAFTA negotiations themselves. A senior official in the Mexican embassy later said, “It was a very skillful letter. It established a framework that allowed you to control the debate.”

Finally, the gambit undercut Gephardt. Now whatever he decided to do would be defined in relation to the Bentsen-Rostenkowski letter and to the administration's response. As a senior Republican Hill staffer recalled, “We were supportive of the letter because we thought it would put the issue to bed. We were trying to nip [the environment and labor opposition] in the bud. The administration and the Republicans and Bentsen and Rosty all were trying to undercut Gephardt.”

On March 12, Carla Hills was back before the Ways and Means Committee. She thanked Chairman Rostenkowski for his letter and promised that the administration would meet the request. “I agree with your characterization of these issues as legitimate ones that deserve to be addressed in a meaningful way,” she said. ₁₄ So it was agreed that there would be an “action plan.”

Devising an Action Plan

It was one thing for the administration to promise to address environmental and labor concerns, quite another to decide how to do it. “When we agreed to the Action Plan it was a ‘place holder.’” recalls Calio. The administration had until May 1 to decide what should be in the place. For the next month and a half, its contents would be negotiated within the administration, with members of Congress, and with key interest groups.

The heart of the administration's strategy was to use the Action Plan to split the environmental community. “We had a very clear strategy to neutralize the [environmental] issue,” recalled the EPA's Esty. “Our problem was to smoke out the real environmentalism from labor protectionism in the guise of environmentalism.” It was not that the environmentalists directly controlled many votes on the Hill, in the same way that the labor unions did. But they had very high standing with the public and a proven ability to generate favorable press coverage. Members of Congress did not want to be antienvironment. If the fast track vote became defined as a litmus test on the environment, it would be very difficult for members to vote for it. And some members who wanted to help the unions but avoid being labeled protectionist might find it tempting to use the environment as an excuse to vote no. To prevent that, some environmental groups had to be persuaded to give their blessing, not just sit on the sidelines.

Fortunately for the administration, the environmental community was far from monolithic. As the EPA's Esty recalled:

The environmental community breaks down on several fracture lines. Some groups are national in focus. They perceive that they have the ability to shape environmental policy. Other groups are more grassroots. They distrust national processes. The second fault line is between those in the environmental community who think that economic growth can be good for the environment and those who subscribe to the limits-to-growth model in which economic growth translates into pollution.

Esty identified a set of environmental groups that might work with the administration, all large national organizations. On March 9, President Bush summoned the leaders of the National Wildlife Federation, the National Audubon Society, the Natural Resources Defense Council (NRDC), the Environmental Defense Fund (EDF), and the Nature Conservancy to the White House. The hope was that some might endorse fast track—indeed Chief of Staff Sununu's insistence on this matter led NWF's Jay Hair to turn down the invitation. None of the groups were prepared to go that far yet, but the Audubon Society and the NRDC did put out statements implying that they might support fast track if their concerns were addressed.

The White House call also had another effect. To this point, most of the mainstream environmental groups other than the National Wildlife Federation had not really been active on fast track. But, said the NWF's Hudson, “the Bush meeting brought other groups into the picture. When the president of the United States calls you to a meeting, it is a wakeup call. A lot of groups got involved then.”

Over the next six weeks, the NWF's Stewart Hudson, Justin Ward from the NRDC, and others worked with the USTR and the EPA to fashion a deal. The environmentalists laid out several conditions for their support. First, the trade agreement would need to include provisions that protected the sanctity of U.S. environmental laws. Second, there needed to be some mechanism to ensure that Mexico enforced its environmental laws. Third, the administration needed to commit to a plan to clean up the environmental mess on the border. Fourth, environmentalists needed a seat at the table for the negotiations and all future trade talks. The administration was willing to talk about all of these issues. Indeed, the interests of these groups were not far from the interests of the EPA.

As the administration wooed the moderates, the environmental coalition began to fragment. A free trade agreement, particularly one negotiated by the Bush administration, could only make environmental matters worse in the eyes of the more radical environmental groups Greenpeace and Friends of the Earth as well as the Ralph Nader organization Public Citizen, now increasingly active in the coalition. These groups were deeply suspicions of the administration and the business community pushing for free trade. The whole agenda was defined by the very people they had been fighting for years. To them, free trade was just a backdoor way to deregulate. Leadership of the environmental opposition shifted from the NWF's Hudson to Public Citizen's Lori Wallach. As Hudson recalls, Wallach told them: “You people don't know how to run a campaign.” She did. She began working more closely with Mark Anderson of the AFL-CIO, Steve Beckman of the UAW, an outfit called the Fair Trade Campaign, and others out to kill fast track. As the rift in the environmental community deepened, the administration grew increasingly confident that it could break the coalition.

Winning Gephardt's support was proving to be a more difficult proposition, however. Gephardt advocated a much broader agenda for the negotiations. The traditional approach to trade, in his view, was far too narrow and outdated. What was needed was a new approach to trade policy. On March 27, Gephardt sent his own letter to President Bush.

I am prepared to lend my full support to a North American Free Trade Zone if the agreement fights for American jobs and exports, preserves the world's environment, and defends the rights of Mexican workers. I request that you not limit the talks to what used to be traditionally known as “trade issues”—tariffs, trade-related investment restrictions, dispute resolution and the like—but rather that we address North American Free Trade systematically. To do so will require discussing issues like transition measures, wage disparity, environmental protection and worker rights. ₁₅

Gephardt called for an “escape clause” to deal with unanticipated surges in Mexican imports, “a very strict rule of origin,” and measures to ease the transition, deal with wage disparity, the environment, worker rights, and human rights abuses in Mexico. He joined Bentsen and Rostenkowski in calling for a response on these matters by May 1.

Gephardt's letter was taken very seriously in the administration. As Majority Leader and someone to whom many members looked for guidance on trade issues, Gephardt's views could not be taken lightly. Nevertheless, there was disagreement on how far to go toward meeting his broader demands. The Action Plan would address the environmental issues, but these were not really Gephardt's central concerns. The administration was not going to propose a European Community–style social charter or address wage disparities. It might be willing to provide funds for “worker adjustment” programs that would support workers who lost their jobs as a consequence of free trade. The administration was divided on this issue, however. Chief of Staff Sununu argued against doing anything. As Nick Calio recalls, the view was “On policy grounds, why pour money into a program that doesn't work? Also, why should we do this for people who aren't going to support NAFTA anyway?” The political strategists disagreed. “[We] recognized that there were going to be dislocations,” recalled Calio. “And we had to do something to get Gephardt and hold other Democrats. My assessment at the time was that we had to have it [worker adjustment assistance].”

Nonetheless, the initial drafts of the Action Plan did not include labor adjustment provisions. When drafts of the plan were shared with the Hill in late April, however, Bentsen and Rostenkowski made it clear that they wanted worker adjustment. Both liked labor adjustment programs, particularly those controlled by their committees. Moreover, they were convinced that it was a political necessity. They conveyed their strong displeasure to the administration. In a one-on-one meeting with the president on April 23, Gephardt made clear he would need an adjustment provision too. Just before the May 1 deadline, the administration decided to include worker adjustment. The package was complete. Now the problem was to sell it.

Organizing a Campaign for Fast Track

While the administration worked behind the scenes to negotiate a deal on the Action Plan that would win over some environmentalists and satisfy the Democratic leadership, it also worked with its allies on the Hill, in the business community, and with the Mexicans to put together a campaign for fast track. The campaign had two fronts, a direct lobbying effort and a public relations effort.

Nick Calio coordinated the administration's legislative lobbying effort at the White House. He set up a master whip list, rating each member of Congress on the standard 1–5 scale (where 1 = support, 2 = leaning yes, 3 = undecided, 4 = leaning no, 5 = opposed). ₁₆ Every administration contact with members was logged. The consultations were producing information on raw political votes, as well as member concerns. This intelligence allowed for targeted lobbying. If a member had a concern about the environment, for example, Bill Reilly would call. The political intelligence fed back to the policy debate about the Action Plan as well. “All of the information was funneling into our meetings and being assimilated as we moved toward a final policy decision,” recalled Calio.

The administration began working closely with the pro–fast track whip operations in the on the Hill. Rostenkowski set up an ad hoc whip operation in the House. The stalwarts of the ad hoc bipartisan whip group were Bob Matsui (Democrat, Calif.), Bill Richardson (Democrat, N.M.), David Dreier (Republican, Calif.), and Jim Kolbe (Republican, Ariz.). Later, Bob Torricelli (Democrat, N.J.) joined the whip group. Torricelli's addition was considered a coup, because of his close ties to unions and to Dick Gephardt. Chairman Rostenkowski kept a close eye on the situation. Because he was worried about the pressure the unions were putting on younger members, he brought some of them into the whip operation, most notably Tim Penny (Democrat, Minn.) and Mike Kopetski (Democrat, Oreg.). In the Senate, Bentsen's group included Democrats Max Baucus, Bill Bradley, Alan Cranston, Dennis Deconcini, and Phil Graham and Republicans John Chafee, Jack Danforth, Bob Dole, Richard Lugar, and Bob Packwood, together more than half the Finance Committee. The Senate group was much more closely held, with Bob Kyle, chief trade counsel for the Senate Finance Committee, and Brad Figel, his Republican counterpart, the only staffers allowed in the meetings. The Hill whip groups shared information and intelligence with the administration.

The magnitude of the opposition to fast track had surprised the business community, which as a consequence got off to a slow start on its lobbying efforts. Early in the spring, many in the administration were grousing that the private sector wasn't doing its share. In April, however, the business community's effort began to gather steam. At the Business Roundtable, Jim Robinson, the American Express CEO who had been instrumental in efforts to promote the concept of a free trade agreement, prodded his fellow CEOs to begin working on the issue. At a meeting in April, Robinson put on a combat helmet from Desert Storm to make his point. “I want 2000 sorties a day,” he told them. Each CEO was given three members to see personally. Staffers followed up to make sure the assignments were kept. Robinson threw himself into the effort. Before the battle was over, Robinson would see or talk by phone with almost 200 members personally.

The Business Roundtable sponsored the creation of a new National Foreign Trade Council, an ad hoc group of 500 companies and trade associations, and coordinated its efforts with the MTN Coalition, a group of companies largely concerned with GATT; with other business organizations such as the Chamber of Commerce; and with individual companies such as General Electric, whose chief lobbyist, Bob Barrie, was perhaps the most active Washington representative. The lobbying effort concentrated on direct contact with members, but also produced a considerable volume of letters from business leaders, stacks of favorable editorials, and endorsements from an impressive list of opinion leaders. The intent was to leave no doubt that the business community was solidly behind fast track.

The Mexican government mounted its own lobbying effort. Because the Mexicans were new to the Washington game, they hired political expertise. “We don't know the ways of Washington well, so we get people who do,” explained Herman von Bertrab, who headed Mexico's new NAFTA office in Washington. Among those retained by the Mexican government were the prominent Republican lobbyist Charls Walker and the prominent Democratic lobbyist Joe O'Neill (formerly of Lloyd Bentsen's staff). It was awkward for the Mexicans to lobby directly, but these well-connected lobbyists provided good access for them.

Off the Hill, the pro-NAFTA effort sought to counter the widespread negative images of Mexico and NAFTA through a public relations campaign involving editorials, radio ads, speeches, and other events designed to generate positive media coverage. The problem was that NAFTA's opponents had succeeded in connecting trade with Mexico with images of shuttered factories in the United States and environmental degradation in Mexico. News articles making the connection even appeared in papers whose editorial stance favored NAFTA. For instance, the solidly pro-NAFTA Wall Street Journal ran a story in September 1989 in which it reported that the maquiladora program was “helping turn much of the border region into a sinkhole of abysmal living conditions and environmental degradation.” ₁₇ In 1991, the opponents took their opposition to the editorial pages, emphasizing lost jobs, environmental degradation, and the antidemocratic nature of the fast track process. AFL-CIO president Lane Kirkland, for example, writing in the Wall Street Journal on April 18, once again connected NAFTA to the maquiladoras, and that program to the legacy of job loss in the United States:

During the past decade, hundreds of U.S. companies, lured by Mexico's “comparative advantages” of rock-bottom wages and lack of effective government regulations and enforcement, have shut down factories in the States and relocated them to the maquiladora areas. While hundreds of thousands of American workers were losing their jobs to this dislocation, more than a half-million Mexicans working in maquiladora plants were joining the ranks of the most crudely exploited humans on the planet.

The result has been social and environmental conditions along the Mexican side of the border that rival any of the well-publicized disasters of the worst Stalinist regimes. ₁₈

To counter this, pro-NAFTA editorials emphasized job creation and international competitiveness and sought to portray the opponents as reactionary. A Wall Street Journal editorial, for instance, castigated liberals for turning their backs on Latin America:

Thirty years ago American liberals rallied around John F. Kennedy's Alliance for Progress in Latin America. Today many of those same liberals are uniting to defeat a U.S.–Mexico free-trade agreement because it might produce too much progress. The transformation of American “progressives” into a force for reaction is an astonishing event. ₁₉

The vast majority of editorial pages around the country endorsed fast track and offered similar assessments.

Mexico, too, got into the public relations battle. At the behest of its strategists at the public relations firm Bursen-Marsteller, President Salinas toured the United States and Canada early in April, making speeches and proselytizing about NAFTA. Salinas was accompanied by a retinue of cabinet officers and top Mexican businessmen wherever he went. In Austin, the last stop on the tour, Salinas became the first Mexican president to ever address the Texas State Legislature.

Rolling Out the Action Plan

The heart of the administration's strategy for passing NAFTA was the rollout of the Action Plan, a response to the letters from Rostenkowski, Bentsen, and Gephardt. Nick Calio coordinated an elaborate effort to maximize the political gain from the announcement. Because Majority Leader Gephardt was out of town until April 30, the administration chose May 1 as the big day. The week before, key members of Congress and favorable interest group leaders were briefed on the plan's contents.

The day of the announcement, a letter was hand delivered to Rostenkowski, Bentsen, and Gephardt early in the morning. The letter promised an administration “action plan” on labor and environmental issues. The president was “committed to working with the Congress to ensure that there is adequate adjustment assistance and effective retraining for dislocated workers,” and promised to “develop and implement an expanded program of environmental cooperation in parallel with the free trade talks” and “expand U.S.–Mexico labor cooperation.” ₂₀ The president promised to appoint environmentalists to the trade advisory committees and committed himself to formulating a plan to clean up the border.

Bentsen and Rostenkowski immediately applauded the president for his responsiveness. The National Council of La Raza, perhaps the leading Hispanic group, endorsed NAFTA, a coup for the administration. But NAFTA's toughest critics were not won over. The MODTLE coalition held a press conference at the National Press Club to denounce the “inaction plan.” Pharis Harvey, president of the International Labor Rights Education and Research Fund, blasted the plan as unresponsive to the numerous concerns about NAFTA that had been raised, including

environmental destruction, suppression of labor rights and standards, growing wage disparities, increased immigration, dangers of pesticide use, human rights abuses, and the need for adjustment assistance for affected workers in industries. The Administration's so-called “Action Plan” has concentrated on only two of these issues—labor and environmental standards—and on these issues their response is not an action plan, but an inaction plan. On the other issues there is a deafening silence. If this is any indication of how the administration plans to satisfy Congress and the general public, there is strong reason to deny them carte blanche authority to negotiate an unchangeable agreement. ₂₁

Although by now it was apparent that there were strains in the environmental coalition, the mainstream groups that the administration had been assiduously courting did not immediately endorse the plan. This caused some frustration in the administration. On May 8, the president met with a small group of environmental leaders including John Adams, executive director of the NRDC; Kathryn Fuller, president of the World Wildlife Fund; and Frederic Krupp, executive director of the Environmental Defense Fund. The president assured them of his commitment to addressing the environmental issues. Among other things, the president promised to appoint five environmentalists to the advisory committees. The group seemed impressed. Kathryn Fuller told a reporter afterwards:

It is certainly fair to say that all the participants from the environmental community see the president's environmental initiatives in the trade negotiations very positively. For the first time, environmental issues are being intertwined throughout the negotiations and discussions on an international trade agreement. ₂₂

News of the meeting prompted consumer advocate Ralph Nader to fire off a letter accusing the environmentalists of having sold out.

On May 10, Jay Hair, president of the National Wildlife Federation, announced his organization's support of fast track in an editorial in the New York Times. The rift in the environment community was now out in the open. The editorial angered leaders of environmental groups who continued to oppose the treaty, such as the Sierra Club and Greenpeace. They recognized that the NWF endorsement effectively neutralized environment as an issue in the Congress. “At the very least,” said a spokesperson for Friends of the Earth later, “we expected the big environmental groups to stay on the fence. Hair's endorsement was strong enough to hurt our position.” ₂₃

Momentum was now clearly with the administration. But Dick Gephardt had not yet announced a position. His opposition could still make matters difficult; his support would all but assure victory. On May 2, Bush canceled a planned campaign trip to Missouri to avoid appearing with Gephardt's Republican challenger. The administration had been dealing with Gephardt for months, and there was some frustration. As Nick Calio recalled later, “An enormous amount of work went into getting Gephardt. We knew we would have to work hard at it. But we didn't know we were going to have to work that hard.”

Finally on May 9, Gephardt announced his decision. He would support fast track, he said, but he intended to hold the administration to its commitments on labor and environment.

I am not willing to write a blank check to this or any other administration on a trade negotiation. We're saying as clearly as I know how to say it to our government and the Mexican government that if this treaty is insufficient, if it does not adequately address the concerns that have been over and over again offered by many of us, we retain the right and will amend this treaty and implementing legislation. ₂₄

Privately, the labor unions were furious with Gephardt.

The path to victory for fast track extension now seemed secure. Although there remained strong opposition to NAFTA in the Congress, members who were inclined to support free trade agreements now had some political cover on both the environmental and labor issues. A few key voices in the business community who had initially voiced reservations about the agreement were now satisfied. The textile industry was promised a restrictive rule of origin to discriminate against non–North American fabric. The pharmaceutical industry was assured that Mexico would pass a strong intellectual property law before the NAFTA talks even got underway. But there would be one more shoal to navigate, one that only a very few insiders even knew existed.

 

Playing with Rules

By the rules adopted in the 1988 Trade Act, the president would get a two-year extension of fast track authority unless either the Senate or the House voted to deny it to him. The rules made fast track difficult to stop, since failure to act gave the president what he wanted. Moreover, the extension would apply to both NAFTA and the unfinished Uruguay Round of the GATT. That put a lot of pressure on members who, given a chance, might have liked to oppose NAFTA but were hesitant to pull the plug on the unfinished multilateral Round. As the vote approached in the House, opponents now tried a last gambit. They proposed to give members just that chance.

In the House, the Rules Committee has enormous discretion concerning the terms on which a bill will be considered when it reaches the floor. Normally, this power is used to determine the length of debate, the types of amendments that may be offered, and the like. Sander Levin (Democrat, Mich.), a critic of NAFTA and of the fast track process, now proposed that the Rules Committee use its authority to separate the votes on NAFTA and GATT. The fast track is a rule of Congress, self-imposed, and therefore, something that the Rules committee could change, he argued. For a moment, it appeared that Levin might have the votes in Rules to carry the day. The pro-NAFTA forces counterattacked. The Speaker of the House, Tom Foley, made it clear to Joe Moakley (Democrat, Mass.), Chairman of the Rules Committee, that he thought this was a bad idea. Moakley made it clear to the members of the committee that they were not to vote this way. The idea died, and with it the last real chance to defeat fast track.

On May 23, the House voted 231 to 192 against a resolution by Byron Dorgan (Democrat, N.D.) to disallow the president his extension. The next day the Senate followed suit, voting 59 to 36 against Fritz Hollings's (Democrat, S.C.) resolution. President Bush had fast track negotiating authority for two years. Nearly a year after the president had announced that the United States would negotiate a NAFTA, the United States could at last enter negotiations.

 

Interpreting the Domestic Politics of Decision: The Role of Institutions and Interests

This chapter began with three questions: Why did an obscure procedural rule of the Congress become the focus of such intense political pressure? How were advocates of labor and environment able to force those issues onto the agenda and extract concessions from the Bush administration? And why did Congress approve the fast track extension Bush requested?

To answer these questions (indeed, even to ask them) we need a theory of international relations in which domestic politics matters. Unless the fast track fight was irrelevant, just so much fury signifying nothing, international-level theory will not do. But, as will be even clearer in subsequent chapters, the domestic political process through which the United States decided to negotiate did matter, both because fast track authority could have been denied and because the process of obtaining it altered the trajectory of subsequent events.

To interpret the history of the fast track extension requires consideration of both interests and institutions at the domestic level. This was a strategic game among competing domestic interest groups, which therefore can be profitably viewed through a rational choice lens. But domestic institutions also mattered: The game was played according to rules established at an earlier time; at stake were rules to apply at a later time. To explain what happened after the fact (and even more to have predicted what would happen or to have informed strategy in the event) requires an understanding of the complex intertwining of interests and institutions.

To understand what was at stake in the fast track fight, one first needs to understand why the fast track process matters. As seen through a rational choice lens, the fast track rule is an ingenious partial solution to the problem of international trade politics as traditionally understood, which is, in essence, a collective action problem among domestic interests. Fast track authority was necessary (and nearly sufficient) for determining whether or not there would be a NAFTA. Domestic pressure groups recognized the significance of fast track and mobilized in pursuit of their interests.

Thus the politics of fast track can be interpreted as a rational choice process among NAFTA supporters and opponents as well as a critical set of opportunists, most notably several environmental groups, who saw a chance to advance interests on side issues not directly at stake. This configuration of interests and interplay of strategies eventually necessitated a strategic response in the form of a promise by the Bush administration to address environmental (and to a lesser extent labor) issues now associated with NAFTA.

The fast track extension game cannot be understood simply in terms of rational choice, however. To understand the fight over the rule in 1991 and its outcome requires that we understand the institutional context in which the fight took place. In particular, we must see the peculiar rules operating in 1991 that initially created an opening for NAFTA's opponents and in the end worked to their disadvantage. These rules had been established in 1988 on the basis of a contest of interests, but interests operating with imperfect foresight (NAFTA had not even been proposed) and within an institutional context created at yet an earlier time. Institutions cannot be reduced to rational choice processes.

 

The Rules Matter: Effects of the Fast Track Process

As first formulated by E.E. Schattschneider, and as explicated by the mainstream literature on trade policy making ever since, the core problem in international trade is overcoming the tendency of concentrated interests in protection to overwhelm the more general interest in free trade. If policy is made piecemeal, establishing the level of protection one sector at a time, for example, gains to protection will be concentrated for firms in that sector, while the losses will be diffused among unorganized consumers. Given the much greater problem of collective action for the many small losers, the concentrated protectionist interests will be much more successful in bringing political pressure to bear on trade policy makers. Attempts to negotiate away these barriers one by one encounter the same problem: Concentrated protectionist interests are more politically powerful than diffuse free trade interests and thus are often able to prevent international agreement. Comprehensive trade negotiations, those that deal with many sectors simultaneously, help balance the contest of interests by adding together the many small benefits from each sectoral liberalization. But if Congress can subsequently revisit the terms of an agreement one sector at a time, the comprehensive agreement will unravel as concentrated interests block pieces of the agreement one by one.

The fast track process largely solves this problem. Under fast track, the president is required to obtain negotiating authority from Congress before entering negotiations, or more specifically from the two committees with jurisdiction over trade, and to consult regularly with those committees and with Congressional leaders during the course of negotiation. The Congress, in return, agrees to a ratification process (called implementation, because trade agreements are not treaties) that differs from the normal legislative process in three critical ways. First, the implementing bill is written by the president, not by Congressional committees (although they are consulted). Second, the bill may not be amended; Congress can either accept or reject it. Third, the bill must be considered within 90 legislative days after it is introduced (hence “fast track”), unlike normal legislation, which can be bottled up in committee, never put on the calendar for floor action, or in the Senate, filibustered by determined opponents. ₂₅

These features have complex effects. One obvious and initially surprising effect is to shift power from Congress to the president. Under normal legislative process, Congress writes legislation and then forces the president to accept or reject it. Under fast track, the president negotiates an agreement, submits it (or more specifically an implementing bill) to Congress, and compels Congress to accept or reject that. Hence the president can identify the set of possible agreements that would be acceptable to a bare majority of Congress and then commit to the one he or she most prefers, a clear advantage to the president.

If this were the only effect of fast track, it would be astonishing that Congress had adopted it. Normally, Congress is intensely jealous of its institutional prerogatives, but fast track helps solve an intra-Congressional bargaining problem. For most members of Congress, a comprehensive free trade agreement may be preferable to no agreement. But every member would prefer an agreement that reflected that member's parochial interests. For example, a member representing a rural district would prefer an agreement that exempted agriculture, and a member representing a textile-making district would prefer an agreement that exempted textiles. If trade-implementing legislation were handled under the normal legislative process, which provides an opportunity to bargain over the form of the bill before it is introduced or to amend it afterward, each member will be tempted to try to modify the terms of the agreement. “Logrolling” among members of Congress, in which each member buys support for his or her particular modification by agreeing to support changes proposed by other members, may then unravel the comprehensive free trade package. The fast track, however, by ceding to the president the writing of the legislation and by prohibiting amendments, eliminates the possibility of logrolling and forces members to consider the benefits and costs of the whole bundle of issues at once. The problem as formulated here is a classic collective action problem, essentially a multiparty prisoner's dilemma, to which the fast track rule is an institutional solution.

A second benefit to Congress has to do with the effect of the fast track process on the game between members of Congress and outside pressure groups. Fast track ties the hands of members (or, rather, allows the president to tie them) by preventing them from amending the agreement in ways that favor concentrated outside interests. By eliminating flexibility, the rule empowers members in dealing with those interests. ₂₆ With fast track, the member can credibly claim to be unable to respond to special-interest demands. In this way, the fast track reduces the larger collective action problem among interests in the society.

Fast track limits the power of special interests in yet another way. By establishing a self-enforcing calendar for action, the rule ensures that an antagonistic chair cannot block a vote and, in the Senate, that the implementing bill cannot be filibustered. A member who happens to represent a district where losers are concentrated cannot, therefore, block implementation.

Taken together, the benefits of fast track to Congress outweigh its costs and go a long way toward overcoming the trade policy making problem as it has traditionally been defined. Most important for the NAFTA story, fast track makes it possible for the United States to negotiate and implement international trade agreements.

Fast track, however, does not serve every interest. First, some protected commercial interests will fare better in a world with less international cooperation and more trade barriers. Second, to the extent that fast track not only limits the power of narrow commercial interests but also reduces the effectiveness of broader interests—labor unions or environmental groups, for instance—those interests may also fare better without fast track. Third, domestic interests not aligned with the president may not be well-served by the concentration of power that fast track puts in his or her hands.

 

Interests and Institutional Choice

In the spring of 1991, interest groups understood quite well what effect fast track would have on the probability of a free trade agreement and anticipated reasonably well what form that agreement would take. Their actions reflected these understandings. To the question of why fast track became such an issue, we have an answer: because interest groups correctly anticipated the likely outcome of the extension of the fast track rule. The fight over the institution of fast track, therefore, can be profitably viewed as a rational choice process among competing domestic interests.

Consider three sets of interest groups. The first were supporters, including especially business groups, who expected to benefit from any NAFTA that President Bush would negotiate. They understood that fast track made NAFTA possible, and they fought hard for it (although they were somewhat surprised at how hard they had to fight).

The second set were opponents, interest groups who expected to lose from any NAFTA that Bush might negotiate. Unions, some grassroots environmental organizations, and highly protected sectors of the economy all preferred no agreement. They understood that a denial of fast track might be their best opportunity to prevent the agreement and fought hard to defeat extension of the rule.

A third set of groups were in a more interesting strategic position. Regardless of whether fast track passed or not, their interests would not be affected strongly. However, they could gain a lot if they could alter the form of the NAFTA that Bush was likely to negotiate. This set included, most notably, the mainstream environmental organizations interested in focusing attention on border environmental issues and establishing a precedent for considering the environmental effects of trade agreements. For them, the battle over fast track renewal represented an opportunity. By forming a tactical alliance with NAFTA's opponents, these opportunists could gain leverage to advance issues of concern to them. ₂₇

These groups clearly anticipated the effects of the fast track process, but such understanding is not inevitable (although that is often the assumption by rational choice theorists). In this case, the experience of the interested parties with the CUFTA may have been relevant. Fast track authorization of CUFTA had met no significant opposition. When Congress considered the completed agreement in the spring of 1988, however, unions and other opponents discovered that their ability to prevent agreement or to affect its terms had been severely limited by the fast track process. The lesson learned, they were ready this time. Unions and other opponents recognized that the fast track fight was their last best chance to prevent agreement. Business recognized that without fast track, agreement was unlikely. And groups seeking to link their concerns to the negotiating agenda recognized that the fast track fight represented their best opportunity to compel such linkage.

Side Payments and the Logic of Linkage

The creation of the “Action Plan” to deal with environmental (and to a lesser extent labor) issues can be understood as the outcome of a strategic game between a key set of “mainstream” environmental groups, their allies on Capitol Hill, and the Bush administration. In this instance, a particular constellation of interests and configuration of rules made possible a commitment strategy by these environmentalists, which forced new issues to be linked to NAFTA and required a side payment in the form of the Action Plan.

The balance of forces that arose for and against fast track gave the mainstream environmental organizations something of a swing vote. They recognized that if they joined in the fast track debate they could determine its outcome. If some of them endorsed fast track, it would pass; if they opposed it, it would not. That they were in this position depended on the fact that the Democrats controlled both houses of Congress and that Democrats were vulnerable to the strong opposition of labor and grassroots organizations. With a Republican majority or weaker opponents, the support of the mainstream groups would not have been necessary.

Unlike unions and the grassroots opponents, the mainstream groups did not view NAFTA as a significant threat to their concerns. They did, however, see NAFTA as an opportunity to advance their interests. They had long wanted more attention paid to the environmental problems on the Mexican border and to the environmental consequences of trade. Without NAFTA, they had not been getting anywhere on these issues. As opposition to NAFTA grew, they recognized that a credible threat to oppose fast track might compel the administration to address these interests. They formed a tactical alliance with the grassroots environmental opponents and stated their price.

The Bush administration, faced with a credible commitment by the entire environmental community to oppose agreement, reinforced by the public commitments of the chairmen of the two trade committees, began quiet negotiations with the mainstream environmental groups to explore what it would take to obtain their consent. At this point, the side issues had become linked to fast track extension. The Bush administration would only agree to so much on these issues, of course, in part because of ideological opposition but also largely because the business groups supporting fast track extension worried about the precedent of linking environmental issues to trade agreements.

In the end, the Bush administration made a modest side payment to the environmental groups in exchange for an announcement of support for fast track extension. The payment—a promise to address the border issues, to discuss greater cooperation with Mexico on environmental issues, and to put a handful of environmentalists on the trade advisory committees—was of a form that did not significantly diminish the expected value of free trade for business supporters. The support of key environmental groups split the environmental community, neutralized the environment issue for members of Congress, and gave most members enough political cover to support extension. Figure 4.1 provides a more formal graphical analysis of this game. As illustrated, the essential features of the politics of fast track extension can be modeled as a bargain between two players whose support was necessary for fast track's success—business and mainstream environment. The figure shows how a commitment strategy by the environmentalists compelled issue linkage and a side payment in the form of the Action Plan.

It is useful to recognize that the side payment was largely in the currency of an institutional change. The administration did not immediately put resources into the border region or agree to particular forms of cooperation with Mexico on environmental matters (or provide new funding for labor adjustment programs); it promised to put these issues on the negotiating agenda. All parties expected this commitment to be fulfilled, although they may have had different notions of its ultimate implications. This observation is a reminder that the form of a negotiation—who plays, on what issues, by what basic rules—is itself negotiated. These parameters reflect interests and power and may be altered if interests are sufficiently powerful and strategically skillful.

To the questions of why there was a fight, why a side payment was needed, and why Congress approved the fast track extension, we now have one set of answers: because of the particular constellation of interests and the strategies they pursued. This interpretation, focused exclusively on domestic-level rational choice politics, is not the only reason for fast track's success, however. Victory also depended on the particular institutional circumstances in which the game was played.

 

Institutions and the Context of Choice

The fast track fight of 1991 demonstrates that the choice of institutions is often a reflection of interest politics. But this does not eliminate an independent role for institutions. First, an obvious point, if the choice of rule made at one period were not binding (or at least constraining) at a later period, then there would be no reason to fight about rules. Interests could simply renegotiate the rules at a later time. Second, the choice of rules in one period must be made according to rules established at an earlier period. If the two periods are sufficiently separated, the effects of these rules may not be anticipated by the choosers.

The history of fast track illustrates this last point nicely. The congressional game in 1991 was played according to rules laid down in 1988. In the 1988 Omnibus Trade and Competitiveness Act, Congress granted the president three years of fast track negotiating authority, primarily to finish the Uruguay Round of the GATT, with a provision that allowed for an extension of two more years if the president asked for it and neither house of Congress voted to oppose it. These were the rules by which the game in 1991 was played, and they mattered.

Had fast track authority simply been extended for five years in 1988, Bush would not have needed an extension in 1991. He would only have needed to announce his intention to negotiate under existing authority, in which case only a negative vote in either of the two trade committees—House Ways and Means and Senate Finance—where support for free trade was greatest, could have denied him fast track authority. The issue would probably not have been in much doubt; indeed, there would probably have been nothing like the contest that arose over the issue of extension. There would have been much less mobilization of opposition, less of an opportunity to link environmental and labor issues, and no need for an Action Plan.

On the other hand, had fast track had been authorized in 1988 for three years without the extension provision, Bush would have needed new authorizing legislation in 1991 to negotiate with Mexico. Under these circumstances, the president would almost certainly not have obtained negotiating authority for NAFTA. (The enormous difficulty the Clinton administration had in obtaining fast track negotiating authority after it expired in 1994 reinforces this point.) As an ordinary trade bill, this legislation would have been open to amendment and subject to obstruction. Moreover, it would have been possible to authorize of fast track for completing the Uruguay Round of GATT without authorizing it for NAFTA, thus eliminating this important linkage.

As it happened, the rule established in 1988 made the extension process in 1991 itself something of a fast track process, an up-down vote on a previously established bundle in which not only NAFTA but also GATT was at stake. Opponents could not filibuster, could not amend, and could not split NAFTA from GATT, all of which made passing fast track much easier for NAFTA's proponents.

One could argue that the decision in 1988 was itself a rational choice process, reflecting the interests of players who bargained to create the legislation. The particular choice of three years with a two-year extension was a deal struck between those who wanted three years and those who wanted five. But the decision in 1988 regarding the rules for extension was not made in anticipation of NAFTA. Few if any then in Congress expected the extension to be used for a free trade negotiation with Mexico. Had the unions and the other NAFTA opponents understood in 1988 that the extension provision would make it more difficult for them to stop a NAFTA in 1991, they would have fought it more fiercely then. Yet the extension provision was scarcely even noticed. Foresight is not inevitable. Myopia is also logical, because of low interest in future events, because complexity makes it too difficult (or too costly) to assess the impact of rules on future events, or simply because the future is unpredictable.

The further back in time we go, the more difficult it is to imagine that choices made about institutions reflect foresight of their ultimate consequences and the less useful it is to consider the establishment of rules as the first stage in the same game. ₂₈ The 1988 process was itself structured by institutions decided upon still earlier, most notably in 1974 when the fast track process was invented for the Tokyo Round of the GATT negotiations. At each point in time, a bargaining process operating in an institutional context created, among other things, a new institutional structure in which the next bargaining process took place.

Indeed, the whole possibility of a debate about authorization in the United States reflects Constitutional provisions that give Congress primacy in trade matters and create a need for authorization in the first place. Consider, in contrast, the Canadian process. Canadians were as divided about the prospects of a free trade agreement with Mexico as Americans were. Yet the nature of the Canadian political system provided no opportunity for opponents in Canada to prevent their Prime Minister from entering negotiations, and therefore, no opportunity to compel him to make the kinds of promises that George Bush had to make. These basic differences in political systems reflected choices made generations before and were not renegotiable. The designers of these two political systems certainly did not have NAFTA in mind, although their designs affected it.

Does one need to go back to the Constitutional Convention to explain NAFTA? Probably not, although if we were interested in the implications of constitutional choice, we might well find this interesting. For our purposes, and certainly for the purposes of participants in NAFTA, the genesis of rules established earlier is mostly irrelevant except to the extent such understandings provide a basis for assessing the stability of those rules. The analyst must bound the problem, which means that at some point, some institutions need to be taken as given. The task, then, is to understand the implications of those institutions for the game at hand.

 

A Note on Individual-Level Analysis

The preceding analysis has largely eschewed attention to particular individuals. But several players located in key spots in the policy making process adopted strategies that mattered to the outcome. It was not inevitable that someone in the environmental community recognize the opportunity, nor that the chairmen of the House Ways and Means and Senate Finance Committees demand action on the environmental and labor issues, nor that key figures in the Bush administration see the necessity of making a concession. Other individuals in these positions might well have behaved differently. Nevertheless, what mattered most was their understanding of the landscape of interests and institutions in which they operated.

 

Conclusions

The history of the fast track fight in the United States in the spring of 1991 clearly demonstrates a role for domestic process in international affairs. George Bush may have announced his intent in 1990 that the United States enter negotiations, but the United States did not decide to do so until Congress approved fast track negotiating authority in 1991. The political battle is a reminder that nations do not decide things as individuals do. A national decision requires a domestic political decision process.

To interpret the fast track fight, the political analyst needs to consider both domestic interests and domestic institutions. A rational choice lens can explicate the behavior of players and the outcomes of the battle, but it cannot, alone, completely explain the event. Institutions at a given time are partly exogenous and, therefore, play an independent role. To the question of why there was a fight in 1991, part of the answer is because the rules of the game allowed for it. To the question of why new issues were added to the agenda, part of the answer is that the particular rule governing extension of fast track created an opening for pressure groups to compel their addition. To the question of why, in the end, the Bush administration won, part of the answer is that the rules governing the vote in May favored extension.

Together, a consideration of institutions and interests in the domestic arena explains much of what happened in the spring of 1991. One limitation, however, should be noted. Our discussion so far has taken interests to be as revealed and has not inquired into the formation of those interests. If instead of procedural rationality, however, we are concerned with the substantive rationality of positions taken, that is, the extent to which the stance regarding NAFTA coincides with underlying interests, some puzzles appear. In particular, how was it that so many individuals, each with relatively little at stake in the negotiation and relatively little ability to influence its outcome, were able to organize such intense and determined opposition? We will return to this question in Chapter 7.

Figure 4.1. The Action Plan. (A) The values of fast track extension (the expected value of NAFTA) and the range of possible resolutions of the environmental issues as yet unlinked to fast track. The value of fast track compared with the status quo is very positive for business but only very slightly improved for the mainstream groups. The environmental side issue is largely distributive: What gives value to environment takes value from business. Acceptable resolutions lie above and to the right of the two axes, drawn so they intersect the alternative of no agreement. Negotiated separately, the parties “should” agree on fast track but will not agree on any resolution of the side issues.

Figure 4.1. The Action Plan. (B) The effect of the environmental groups' commitment strategy. With commitment, the environmental reservation value (minimum acceptable value) shifts to the right (dashed line). Now only points above the horizontal axis and to the right of the new environmental reservation value line are acceptable. No agreement is possible.

Figure 4.1. The Action Plan. (C) The effect of linking fast track extension and the environmental side issue. Added together, the two issues create a zone of possible agreement to the right of the environmentalist commitment.

Figure 4.1. The Action Plan. (D) The location of the Action Plan along the range of possible resolutions of the environmental issues. The Bush administration chose a point just sufficient to obtain the environmental groups' support. (Two years later, the Clinton administration would choose a point farther to the right on the line of possible resolutions.) This side payment transferred value from the business community to the environmentalists so as to create a possibility for agreement where none existed before, thus creating joint gains.

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Endnotes

Note 1: Classic texts in this tradition include E.E. Schattschneider, Politics, Pressures and the Tariff; Raymond A. Bauer, Ithiel de Sola Pool, and Lewis Anthony Dexter, American Business and Public Policy; and I. M. Destler, American Trade Politics.  Back.

Note 2: A coalition of software, entertainment, and pharmaceutical companies, among others, threatened to withhold their support for NAFTA until Mexico passed a law to address the widespread piracy of intellectual property, but they could be counted on to be supporters once that law was passed.  Back.

Note 3: “Manufacturing in Mexico: on Uncle Sam's Coat-Tails,” The Economist, 16 September 1989, 82.  Back.

Note 4: Comparing U.S. and Mexican wages is tricky, in part because fluctuations in the exchange rate can cause large apparent shifts in the ratio, and in part because of differences in fringe benefits.  Back.

Note 5: Gene Zack, “Runaways to Mexico Spread Economic Woe,” AFL-CIO News, 22 November 1986, 1.  Back.

Note 6: Dinah Wisenberg, States News Service, 3 December 1986.  Back.

Note 7: Statement by the AFL-CIO Executive Council on Mexico and the Maquiladora Twin-Plant Program, 16 February 1988.  Back.

Note 8: AFL-CIO, The Maquiladoras: The Hidden Cost of Production South of the Border, February 1989.  Back.

Note 9: Hearing before the House Ways and Means Committee, 21 February 1991.  Back.

Note 10: Ibid.  Back.

Note 11: David Haskel, “Free Trade With Mexico Under Intense Fire in the U.S.,” Reuters, 17 February 1991.  Back.

Note 12: Hearing before the House Ways and Means Committee, 20 February 1991.  Back.

Note 13: Letter to the president from Lloyd Bentsen and Dan Rostenkowski, 7 March 1991.  Back.

Note 14: Hearing before Senate Finance Committee, 12 March 1991.  Back.

Note 15: Letter from Richard Gephardt to President Bush, 27 March 1991.  Back.

Note 16: This scale has become standard for vote counting in Washington. The general rule was to be conservative in rating members, only putting them in the 1 or 5 categories when they were publicly committed one way or the other. Because members often wish to keep their options open, and rarely wish to offend, getting an accurate count is an art.  Back.

Note 17: Sonia Nazario, “Boom and Despair: Mexican Border Towns Are a Magnet for Foreign Factories, Workers and Abysmal Living Conditions. World Business: A Special Report.” Wall Street Journal, 22 September 1989, A1.  Back.

Note 18: Lane Kirkland, “U.S.–Mexico Trade Pact: A Disaster Worthy of Stalin's Worst,” Wall Street Journal, 18 April 1991, A17.  Back.

Note 19: Wall Street Journal, 29 April 1991, A14.  Back.

Note 20: Letter from President George Bush to Representative Dan Rostenkowski, 1 May 1991. Nearly identical letters were sent to Lloyd Bentsen and Richard Gephardt.  Back.

Note 21: Federal News Service, “News Conference by the Coalition: Mobilization on Development, Trade, Labor and the Environment,” 2 May 1991.  Back.

Note 22: “Inside Track: Greens Put their Trade Case to President,” Greenwire, 9 May 1991.  Back.

Note 23: Gary Lee, “ ‘Fast Track’ Sprint: Frenzied Lobbying on a Treaty Not Yet Written,” The Washington Post, 23 May 1991, A21.  Back.

Note 24: “Gephardt Says He Will Support Fast-Track But Reserves Right to Amend Mexico Pact,” BNA Daily Report for Executives, 10 May 1991.  Back.

Note 25: The law specifies that legislation be reported out of House committees no more than 45 legislative days (days that the House is in session) after introduction, voted upon in the House no more than 15 legislative days after discharge from House committees, reported out of Senate committees no more than 15 legislative days after the House vote, and voted upon in the full Senate no more than 15 legislative days after discharge from Senate committees. Regardless of how quickly the House acts, Senate committees cannot be compelled to discharge the legislation in fewer than 45 legislative days.  Back.

Note 26: See Thomas C. Schelling, The Strategy of Conflict, and Jon Elster, Ulysses and the Siren.  Back.

Note 27: In a sense, the vast majority of business interests were in this position too. They could be expected at the end of the day to endorse agreement, but in the interim they would seek to influence the shape of the outcome. With respect to the fast track extension, however, they did not need a concession to ensure that their interests would be heard during negotiation. Environmental groups did.  Back.

Note 28: For what constitutes an event for social sciences, see William Riker, “Political Science and Rational Choice,” in James M. Enelow and Melvin J. Hinich, eds. Advances in the Spacial Theory of Voting, 163–181.Back.

 

Interpreting NAFTA : The Science and Art of Political Analysis