Does Robert Zoellick Deserve a Place in History?

In a puff piece on U.S. Trade Representative Robert Zoellick in the March 31 issue of Business Week, reporter Paul Magnusson noted that "Zoellick's father, an Army veteran of World War II and Korea, surrounded his son with uniforms and insignia. Zoellick's offices are filled with pictures of Civil War generals and naval battles. On trips to Africa, he can recount famous battles from the Boer war and the Zulu uprisings." Zoellick's interest in military history is apparently sincere. On the first anniversary of the September 11 terrorist attacks, he attended a memorial service at a military museum in Port of Spain, Trinidad. He was at a meeting of the Caribbean Community Ministers of Trade. He mentioned his tour of the museum in his speech to the delegates as a reminder that "the Caribbeans are a crossroads of history."

What he did not mention was that the military history of the Caribbean is dominated by battles over the control of trade routes and the ownership of plantations and factories during the centuries of the great European empires. Instead, he stressed trade as a peaceful system of regional integration. This implies that Zoellick is one of those who see history as something to escape from rather than to learn from; a source of amusing tales of adventure, but not a source of insight into human nature and the "endless waltz" of world affairs which is based on competition.

It has been often said that the difference between an armchair general and a real strategist is that while the hobbyist is enthralled by the thunder of the guns, the professional thinks in terms of logistics. It has been true since Clearchus of Sparta said in 401 BC, "Without supplies neither a general nor a soldier is good for anything." By extension, this becomes another enduring maxim: "The sinews of war are infinite money," stated the Roman statesman Cicero. By the time of the struggle for the Caribbean, Louis XIV's Finance Minister Jean Baptiste Colbert understood that "trade is the source of finance, and finance is the vital nerve of war."

America became the world's greatest power by first becoming the world's greatest economy, a position it attained over a century ago when its manufacturing surpassed the combined output of the three leading European powers, England, Germany and France. The shifting of world finance to New York and the creation of the global dollar standard was the natural result of decades of trade surpluses.

Today, however, U.S. manufacturing is in crisis. Though the thunder of American guns seem to dominate overseas events, the domestic economy teeters on a "double-dip" recession. On July 3, the Labor Department reported that the unemployment rate jumped to 6.4 percent in June as the number of people looking for work but unable to find it surged past the 9 million mark for the first time in 10 years. The single largest factor in the rising unemployment number is that manufacturing continues to lay off workers. Industry has been shedding jobs for three years, with total factory employment declining by 2.6 million since July 2000. Telecommunications, once ballyhooed to be the "new economy" replacement for manufacturing, has lost some 202,000 jobs since the 2001 recession began.

Nearly everyone now understands that the notion of a "post-industrial" economy, so highly touted by free trade advocates during the 1980s and 1990s, has led to a dead end. On July 8, Commerce Secretary Donald Evans said he was sending officials out across the country to hold round-table discussions on manufacturing and job creation: "President Bush has made economic growth and job creation a top priority of this administration, and he understands that you can't address those two priorities without taking a serious look at manufacturing." "Manufacturers have always reflected the best of American business, showing resiliency and high productivity. This administration will do all it can to ensure that manufacturers can compete and win in the global economy."

But here is the rub: a fatally flawed approach to trade policy is at the center of America's economic woes. Representative Don Manzullo (R-IL), Chairman of the House Small Business Committee noted at a recent hearing that high-skilled jobs - software designers, engineers, architects, and radiologists to name a few - are following factory jobs to cheap Asian labor markets. "I hate to use the word 'protect,' but the national industrial base, including the tool and die industry, has been savaged, and the government won't wake up to the fact that it is crucial for national security," said Manzullo, adding. "Every time we try to bring these problems to the attention of the people in the Pentagon, it just falls on deaf ears. No one gets it."

A prime example of those who "don't get it" is USTR Zoellick, whose job it is to run trade policy in ways that create advantages for American-based industry. But Zoellick behaves as if completed disconnected from reality. Zoellick spends his time jet-setting around the world, making speeches about the wonders of "free trade" and attending endless conferences, but to no end. The trade deficit has mushroomed out of control without Zoellick seeming to notice. Indeed, Zoellick seems completely encapsulated in his own little world.

He has completed work on two "free trade agreements" with Chile and Singapore, but as an analysis by the U.S. International Trade Commission concluded in both cases, there would be virtually no impact on the United States because these two foreign economies are so small relative to the American economy. The Singapore economy (GDP) was worth only about $106 billion in 2001, and the Chile economy was $153 billion. Trade, of course, is only a fraction of GDP. In 2002, Singapore was Americas 11th largest export market and one of the few places were the United States had a surplus ($1.4 billion). Chile was America's 34th export market with which the United States ran a $1.2 billion trade deficit. Neither number is impressive given that the U.S. trade deficit in 2002 was over $470 billion in goods.

Zoellick's record is one of big talk about airy notions like "free trade" but no action—and apparently not even any concern, regarding the real world problems of declining American industry and mounting trade deficits. That means future American historians will not treat him kindly, if they notice him at all.

William R. Hawkins is Senior Fellow for National Security Studies at the U.S. Business and Industry Council.


Lighten Up, Francis!
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I have the highest respect for the intellectual capacity of USTR Zoellick.

However, even the people with the highest amount of intellect and the most impressive array of sheepskins on the wall from Ivy League institutions, have been rolled in the dank, dark trade alley ways of the world by clever, street-smart protectionists such as the Sun-tzu tactical legions from China and Japan. And they often never knew what hit them. (That's OK. By the time the trade figures for the industry sector they so cleverly engineered a wonderful and "fair" bilateral or multilateral agreement are in, they are long since gone and have usually left federal government to go on to make big bucks over on K Street, often for foreign interests. But who cares then?)

That is, because by-and-large, these pointy headed bureaucrats who can't park their bicycles straight, focus almost TOTALLY on the procedures of negotiations and the legalisms and print. They care nothing about RESULTS.

A failed trade agreement negotiated and signed, is not a victory. Trade agreements with so many loopholes which never address(ed) the informal trade barriers everywhere, that result in loss of American jobs or market share, are likewise GREAT for the USTR homepage, but are not "victories."

Some of these genio-in charge of trade in D.C., Democrap and GOP alike, may NEVER learn. That's OK. The accolades and awards look good on a mahogany wall.

We need a whole new USTR Dept. in the Executive Office of the Pres., IMHO

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