President-elect George Bush marked a significant new era in trading relations between Canada and the United States last week. At a packed Washington, D.C., news conference held to introduce high-level appointees to the new administration, Bush announced that Washington lawyer Carla Hills will replace Clayton Yeutter as the U.S. trade representative. Hills, a wellknown Republican, was formerly secretary of housing and urban development in President Gerald Ford’s administration. And Bush, addressing the problem that Hills has no direct experience with international trade, said that she “stands for free trade and fair trade.” Canadian interest in Hills, 54, is high. One of her prime responsibilities will be the implementation of the Free Trade Agreement between Canada and the United States—when the FTA takes effect next year—and she will likely have a major impact on trade relations between the two countries. Said Richard Belous, trade expert with the Washington-based research and policy institute National Planning Association: “She will set the tone of the relationship.”
Hills’s influence is a result of her position as a favorite with secretary of state-designate James Baker, who is widely cited as the secondmost powerful figure in the Bush administration. As secretary of the treasury in the Reagan administration, Baker guided the FTA through Congress. Last week, Bush staff members told Maclean’s that Baker has instructed Hills to place smooth implementation of the pact among her top priorities.
Hills has a reputation as a good negotiator, but as a trade representative she is an unknown quantity. Still, respect for her skills is widely based. Richard Anderson, president of Canadian public affairs consulting group Government Research Corp., described her as a “pragmatist and not an ideologue.” Added Anderson: “She is likely to be tough, but I would be hard pressed from the Canadian point of view to identify any signs of trouble.” Belous called Hills’s appointment “key” and he added that “much will depend on how [she] interprets things.” He said that he was “a little surprised by her appointment because her background is not in trade,” adding, “Still, I expect Carla Hills to be a very quick study.”
But Hills’s connections in industry and finance have already raised concerns about potential conflicts of interest. Known for her expertise in antitrust law, she is married to Roderick Hills, chairman and managing director of Manchester Group Ltd. Manchester is a Washington-based merchant banking organization that manages international business transactions. Connections with Carla Hills’s own law firm, Weil, Gotshal & Manges, could also be a potential source of problems for the new trade representative.
Some firm members—not including Hills—are lobbyists for Japanese manufacturer Matsushita, a company that could be involved in trade disputes with the United States.
To defuse objections to her appointment, both husband and wife have pledged that they will abide by Bush’s new standards of ethics for his administration, which include spouses and which are designed to avoid conflict of interest. And at last week’s news conference, Carla Hills said that “if there
is any conflict of interest, Rod has said he will remove himself from the position of conflict.” Hills, the mother of four, is the product of a privileged background. She is the daughter of Los Angeles millionaire Carl Anderson and was raised in Los Angeles and spent her summers on a 25-acre farm in nearby Burbank. She was educated at private schools before attending Stanford University and then Yale Law School, where she graduated 12th out of a class of 167. She has been heavily rumored as a future candidate for the Supreme Court. An accomplished tennis player and eager traveller, Hills has also just finished writing her third law book.
Hills must be confirmed by the Democratcontrolled Senate, but no significant opposition is expected. Last week, Senate finance committee chairman Lloyd Bentsen of Texas questioned Hills’s lack of trade experience. But other senators, including Democratic whip Alan Cranston, praised her sharp mind and negotiating abilities. Added Cranston: “This is an outstanding nomination of an outstanding person.” In dealing with the still-unknown complexities of the FTA, Hills will have ample opportunity to test her widely praised skills.
PATRICIA CHISHOLM with WILLIAM LOWTHER in Washington
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