TIME: Almanac 1995

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<text id=93TT1164> <title> Mar. 15, 1993: Trade Warrior </title> <history> TIME--The Weekly Newsmagazine--1993 Mar. 15, 1993 In the Name of God </history> <article> <source>Time Magazine</source> <hdr> ECONOMICS, Page 51 Trade Warrior </hdr> <body> Clinton plans to play tough with foreign competitors, and a proudly undiplomatic lobbyist is primed to be his enforcer--even if the French stomp their "little feet" By DAN GOODGAME/WASHINGTON He wears pinstripe suits with suspenders and is addressed as "Mr. Ambassador." But Mickey Kantor is no diplomat. Take, for example, the way he described French negotiators who have fought to retain barriers to American farm exports: they have "held their breath and stomped their little feet," he said in an interview last week. Publicly, he has threatened retaliation against half a dozen "unfair" trade practices by the Europeans, the Japanese and others. And in response to foreign officials who sputter about his "bullying" tactics, he says with a tight smile and easy Tennessee drawl, "I think our message is getting through." A political wheeler-dealer who was Bill Clinton's surprise choice to be U.S. Trade Representative, Kantor had little experience in the acronymic arcana of GATT and NAFTA and other trade agreements. Yet he has proved a remarkably quick study, in the manner of a crack litigator mastering a complex brief. He is, by training and nature, an aggressive lawyer and lobbyist. Kantor sees himself not as a peacemaker but as a warrior who, as he puts it, "hates to lose." (Those who beat him at tennis have learned to watch out for his flying racquet.) He has represented migrant farmworkers and lobbied on behalf of giant oil and aerospace companies. Now, he says, he has two new clients: Bill Clinton and "the American worker." So don't expect the occasional tiffs over Chablis and microchip exports--which occasionally punctuated the relatively laid-back approach to trade during the Bush and Reagan years--to be settled quite so amicably in the future. President Clinton has, like many moderate Democrats, publicly straddled the trade-off between creating export jobs at home and subjecting U.S. workers to increasing competition from abroad. His speeches gently emphasize the goal of free trade one day, while sounding off against "unfair" competition the next. But behind closed doors, a tough new policy is emerging, and Kantor is primed to play its bad cop. The stakes are rising, as an American economy that was virtually self-sufficient in the 1950s and 1960s has become increasingly dependent on exports for economic growth. Just in the years between 1986 and 1990, the number of Americans who produce goods for export jumped to 7.2 million from 5 million. Export-related jobs have grown throughout the economic slump, and they pay about $3,500 more a year than the average American job. If Kantor is successful in negotiating lower trade barriers, says Senator Max Baucus, a Montana Democrat influential on trade issues, he "will create more new jobs in America than any other Cabinet member." On trade, as with music and much else, Clinton's and Kantor's differences with their predecessors are not only political but generational as well. George Bush and his closest advisers were raised in the Great Depression and seared by World War II, and they blamed both calamities in large part on what Bush called "those Smoot-Hawley days"--a reference to the protectionist 1930 U.S. tariff that crippled the world trading system. Under Bush, says one of his former economic advisers, "the Europeans and Japanese knew that if they held out long enough, we wouldn't retaliate in any serious way, out of fear that we might trigger another escalation of trade barriers like in the '30s." Those fears are not shared by Clinton and Kantor. With the cold war over, they are more inclined to give economic and trade issues priority over foreign policy. They also view Japan and the European Community as equals in all but military terms and expect equal treatment for U.S. exports. Under the new regime, if other countries fail to honor agreements on market access, the reaction will be swift. "We don't believe it's particularly negative to take action," says Kantor. "We may have confrontations or fights, but that's natural...It doesn't mean you have to have a trade war. That's silly." It may be silly, but it frightens America's trading partners, who have become used to relatively open access to the world's biggest market. Kantor is not shy about playing on those fears. Last week he and Clinton allowed an important deadline to pass without asking Congress to extend their authority to negotiate an agreement to reduce global trade barriers. The move was clearly intended to wake up the Europeans, from whom the U.S. wants assurances that they are serious about negotiating "instead of jerking us around the way they have for the past six years," as a Clinton adviser puts it. Kantor also promised, in a speech to the Semiconductor Association last week, to hold Japan to its commitment, made to President Bush, that it would open its market to U.S. computer chips. The idea was that American semiconductors--which claim 53% of the world market outside Japan--would be allowed at least 20% of Japanese sales. That is not happening, and so Kantor is moving quickly to put teeth into a new set of rules. Otherwise, he warned, there would be "a rising tide of resentment, a feeling among many Americans that they are getting the short end of the stick." That was precisely the emotion Clinton played upon last month during a visit to Boeing, the troubled aerospace giant, which plans to shed 28,000 jobs. "Very little of that is your fault," Clinton told workers. Instead, he blamed the layoffs on sales that Boeing has lost to Airbus Industrie, a European consortium that does not produce passenger jets as efficiently as Boeing, yet often undercuts the U.S. firm's prices with the help of $26 billion in subsidies from four European governments. Kantor says he would prefer to reduce such foreign subsidies through negotiations. But that desire is being backed up by a threat: the Administration is willing to match any foreign subsidies that undermine American high-tech industries by funding expensive research and development for companies like McDonnell Douglas and Boeing. More ominous is Clinton's suggestion that the same sort of aid might be extended to U.S. automakers and other industries--unlike Boeing--whose managements and unions have contributed heavily to their own problems. During the campaign Clinton seemed to endorse Detroit's demands for sharply higher tariffs on popular Japanese minivans. And Kantor last Friday flew to Detroit to hear about other "help" that the automakers want. Kantor's detractors are worried that he and Commerce Secretary Ron Brown, another lawyer-lobbyist and political operator, are using trade and industrial policy to buy business and labor support for Clinton's re-election. His admirers, however, say that Kantor's political skills are essential to win approval for Clinton's complex trade policy in Congress. Those skills, they say, were proved when Kantor took charge as chairman of Clinton's campaign during the Gennifer Flowers scandal and helped steady and revive both the candidate and his youthful staff. Kantor's role was diminished during the general election, though he was credited with negotiating a presidential-debate format favorable to Clinton. Kantor, 53, was born in Nashville, Tennessee, where his family ran a furniture store near one of the sites of the Grand Ole Opry. He became a star shortstop on the baseball squad at Vanderbilt, and served four years in the Navy before studying law at Georgetown. While at the Los Angeles law firm of Manatt, Phelps, he helped elect politicians in the city and state and then represented clients--including Occidental Petroleum and Lockheed--in their dealings with government. He has usually supported liberal Democrats with strong ties to corporate interests: Los Angeles Mayor Tom Bradley, former Vice President Walter Mondale, former California Governor Jerry Brown, Senator Alan Cranston and Clinton. Kantor has known considerable personal tragedy; he lost his wife in a passenger-jet crash in 1978, and a 17-year-old son in a fiery auto accident 10 years later. He has two grown children, and a nine-year-old daughter by his second wife, former NBC reporter Heidi Schulman. An early riser, Kantor runs about five miles each morning and is at his office, in a small building a block from the White House, by 7. For all his intensity as an advocate and negotiator, Kantor has a shambling charm that can be disarming. He was, for example, spotted making an early departure from a book party in Washington last week, absent the usual coterie of handlers and instead lugging his briefcase and dry-cleaning into the soggy night like any other commuter. He uses self-deprecating humor, sometimes muttering about his mistakes--"Kantor muffs another one!"--as if he were a play-by-play announcer. But Kantor still has the sharp reflexes that served him well as a shortstop, and he's determined that nothing is going to get past him in his new position. </body> </article> </text>