How Trade Impacts US Jobs and the War on Terrorism ; the Bush Administration Weighs Competing Factors as Talks Involving Developing Countries Begin in Cancun

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With the war on terrorism its No. 1 priority, the Bush administration will have an opportunity at international trade talks starting Wednesday to highlight the link between poor-country development and global security.

The United States stands to gain in terms of both its image abroad and long-term security interests if countries that have been the seedbeds of terrorists get a better shake at prosperity through international trade, experts say.

A long-elusive agreement reached recently between the US and a group of developing countries on access to low-cost medicines patented by US pharmaceutical companies could demonstrate how additional deals can be reached, particularly in the thorny area of farm trade. The drug accord, in fact, is seen as breathing life back into global talks that trade ministers from World Trade Organization (WTO) countries will convene in Cancun, Mexico.

Yet as the Bush administration takes trade as a tool against terrorism to the world stage, it is watching over its shoulder how the issue of international trade and job losses is playing at home. With trade hitting some specific constituencies - in Southern textile and Northern steel states, for example, and in Florida's orange groves - the White House risks taking a hit on the jobs issue in states that will be key to the 2004 presidential election.

"There'll be reluctance to do anything incredibly bold with the presidential [election] cycle coming up, but the world situation today demands looking at trade policy not just as commercial policy but as foreign policy with ramifications for national security," says Brink Lindsey, director of the Cato Institute's Center for Trade Policy Studies in Washington.

Pivotal moment

The Cancun meetings mark the midway assessment point in a trade negotiating round that is supposed to result in some landmark benefits for developing countries by December 2004. These countries want a better shake for their farmers and access to pharmaceuticals, in exchange for developing nations opening their markets wider to the service industries of wealthy countries.

But with progress slow, some key developing countries had started predicting Cancun would be a bust much like the ill-fated WTO talks of Seattle in 1999. The US focus on terrorism and global turmoil over the war in Iraq were not seen as helping - even after President Bush linked development and terrorism's defeat in a speech in Mexico last year.

The problem for the Bush administration is that jobs and job losses are tangible, while the links between trade and terrorism are indirect. In addition, security benefits from increased prosperity in poor countries are reaped long term. "There may not be a clear or immediate link, but as President Bush himself has said, these poor and failed states are like a cauldron where poverty and disease, frustration and resentment of the world can brew and come back and bite you," says Eugenio Diaz-Bonilla, a trade expert at the International Food Policy Research Institute (IFPRI) in Washington.

While no one expects the US to make sweeping concessions in international trade, there is a growing sense that America's security interests must be addressed in part in the trade realm. …