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Hastert thinks he has the Democrats cornered because his whip operation is telling him that 188, and perhaps more, GOP Congressmen will vote to give Bush expanded trade negotiating powers. Thus, if only 29 House Democrats support the administration, a minuscule 15% of their membership, Bush will win the House showdown. Unfortunately, as of now, only 7 House Democrats publicly back fast track. Since 1993, free traders have known that if their cause was going to have trouble in Congress, it would be on the House floor. In recent years, the House floor has been the sight of several decisive trade showdowns, including NAFTA, the first WTO agreement, and providing permanent most favored nation status to China. In fact, the House defeated the last fast-track proposal in 1998 by a vote of 180-243. Only 29 Democrats voted then to give Democratic President Bill Clinton fast-track powers. On these earlier key trade votes, however, the Senate has gone along by comfortable majorities. A House win now, therefore, likely leads later to a Senate win by a margin of 60-40 or better. Bush would use his
new powers to create a Free Trade Area of the Americas (FTAA) and to complete
another round of global trade liberalization talks that just got underway
earlier Sticking it to your opponents is fun, of course, but as investors we'd prefer it if the GOP found other issues with which to go after the Democrats. THE
HEALTHY NAFTA EXAMPLE Congress might also learn the wisdom of Beatle George Harrison's song lyric, that "life goes on within you and without you." Trade Ministers from 34 Western Hemisphere nations have met six times since June 1995, and have produced a draft free trade agreement (FTAA). Western Hemisphere Trade Ministers can continue to narrow their differences while they wait for Bush to get the votes in the House. Investors should anticipate that a FTAA will become law before President Bush must face the voters in 2004. More than 800 million people will participate (over twice the size of the European Union). The effective date for the new agreement is expected to be January 1, 2005. It's worthwhile to
consider what could happen south of the border when the FTAA comes into
effect. Fortunately, there is a naturally occurring social-science experiment
to evaluate: There are several ways that investors can play the coming South American trade surge. They can invest in individual equities on foreign bolsas. They can purchase American Depository Receipts, which trade in tandem with their foreign counterparts on American stock exchanges, from an ever growing list of possibilities. A current list for Peru, for example, can be accessed at site-by-site.com. Alternatively, investors can gain diversified exposure by purchasing closed-end country funds, here or in London — many of which trade at discounts to net asset values.
— Stuart
J. Sweet is president of Capitol Analysts Network, a political risk-management
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artisan politics returns
to Congress this Thursday when the House votes whether to provide fast-track
trade negotiating authority to George W. Bush. House Speaker Denny Hastert
(R., Ill.) wants to force House Democrats into a no-win choice: give Bush
a pivotal win or be unmasked as false friends. 
