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enforce American-style standards will slow economic growth in the target countries and

make those standards all the more difficult to attain.

The only real effect of tying trade to standards will be to arouse the resentment of

less developed countries. In August, the Rio Group of Latin American countries issued a

statement at their meeting in Paraguay that trade should not be intertwined with labor and

environmental demands. At the ministerial meeting of the World Trade Organization in

Singapore last December, a decisive majority rejected the proposal of the United States to

saddle the WTO with policing international labor standards.

Compromise language approved by the Senate Finance and House Ways and

Means committees in early October 1997 would allow the president to negotiate trade

deals under fast-track authority in which the parties agreed not to loosen environmental

and labor standards to gain an advantage in trade. Specifically, the Ways and Means

version of the bill approved by the committee on October 8 states that a principal

negotiating objective of the United States in the area of labor and environment will be "to

ensure that foreign governments do not derogate from or waive existing domestic

environmental, health, safety, or labor measures, including measures that deter

exploitative child labor, as an encouragement to gain competitive advantage in

international trade or investment."

At best this language is unnecessary. As the OECD study indicates, fears of a

"race to the bottom" are overblown. At worst the provision would reduce the ability of

governments to adapt their regulatory structures to meet changing economic conditions

and social preferences.

A clean fast-track bill, one without any reference to labor and environmental

standards, would not preclude the United States from pursuing labor and environmental

agreements through other channels. But it would prevent the president from abusing the

fast-track process by attaching labor and environmental legislation to a bill that cannot be

amended by Congress.

The driving purpose of the fast-track process is to open global markets to trade

and investment. Adding labor and environmental agreements to the agenda, especially if

they involve imposing sanctions for noncompliance, would have just the opposite effect,

providing yet another pretext for protectionism.

The Success of NAFTA

Despite what opponents of fast-track authority contend, the North American Free

Trade Agreement has been a success by any measure. Trade among the United States,

Canada, and Mexico has flourished since the passage of NAFTA, benefiting American

consumers and exporters. Since 1993, two-way trade with our NAFTA partners has

increased by 44 percent, to $421 billion in 1996. That compares with a 33 percent

increase in American trade with all other countries.10 Mexico has now become America's

second largest market for exports, just ahead of Japan and behind only Canada.

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