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Trade partners express relief at Bush re-election

Even foreign governments critical of George W. Bush's stance on other issues will be breathing a discreet sigh of relief at what his re-election means for US policy on international trade.
/ Source: Financial Times

Even foreign governments critical of George W. Bush's stance on other issues will be breathing a discreet sigh of relief at what his re-election means for U.S. policy on international trade.

Although they castigated Mr. Bush for raising steel tariffs and signing a subsidy-laden farm bill in 2002, many U.S. trade partners view him as preferable to John Kerry, whose protectionist campaign rhetoric troubled them.

Most observers expect a second Bush administration to pursue a relatively predictable and broadly liberal trade agenda that will focus, at least initially, on completing unfinished business left over from its first term.

The president's hand will be strengthened by increased Republican majorities in both houses of Congress, achieved at the expense of Democratic legislators beholden to labor unions, environmentalists and other groups hostile to free trade.

That should make easier his task of securing next year extension of the hard-won legislative authority needed to continue participating in the Doha world trade round and other international negotiations.

Mr. Bush may also be emboldened to seek early congressional approval of recent trade deals with countries in central America and elsewhere. Democratic resistance has so far deterred the White House from sending them to Capitol Hill.

The president's stated commitment to free trade will face an early trial when the U.S., along with the European Union and Canada, is obliged to scrap long-standing quotas on textiles and clothing imports from developing countries at the end of the year.

U.S. textiles producers are lobbying the White House intensively to extend the measures or replace them with other barriers, to prevent a threatened influx of cheap clothing from China.

However, the Bush administration made only small concessions to those demands during the election campaign, suggesting it may continue to take a firm line after it is returned to power.

Yet to be tested is the future U.S. attitude to the Doha talks and trade relations with the EU. Robert Zoellick, U.S. trade representative, worked hard to achieve progress on both fronts, in close co-operation with Pascal Lamy, EU trade commissioner.

However, both men are due to step down shortly and it is unclear whether their successors will share the same goals, commitment and personal chemistry.

Time bombs are ticking away under U.S.-EU trade relations. Washington is challenging in the World Trade Organization government support for the European Airbus and EU policy on genetically modified foods, while Brussels is pressing the U.S. to comply quickly with WTO rulings against a number of its trade laws.

All predictions about U.S. trade policy depend on the state of the economy. If growth slowed sharply and unemployment rose, renewed protectionist pressures could soon follow.