BUSINESS

America's trade hitman

Mickey Kantor’s get-tough policy targets Canada

CARL MOLLINS March 25 1996
BUSINESS

America's trade hitman

Mickey Kantor’s get-tough policy targets Canada

CARL MOLLINS March 25 1996

America's trade hitman

BUSINESS

Mickey Kantor’s get-tough policy targets Canada

CARL MOLLINS

After Trade Minister Art Eggleton met his U.S. counterpart, Mickey Kantor, in Washington early this month—as a dinner guest and in

a two-hour talk the next day—he chose to discuss cross-border commerce in comparative terms. “From everything I hear about trade relations the United States has with other countries, this one is on solid ground,” he said, referring to U.S.-Canada trade. “It is a far more amicable situation.” In that case, other countries must be staggering under the pugnacious trade policies pursued by Kantor, Congress and, lately, President Bill Clinton. As Eggleton spoke to reporters on March 4, the American government worked on border-spanning measures that strike at an array of Canadian businesses, from publishing to poultry, steel and lumber, entertainment and, most aggressively of all, Canada-Cuba commerce.

At the Canadian Embassy in Washington, where Ambassador Raymond Chrétien deals with the often-prickly Kantor on a first-name basis, officials react in diplomatic tones. They point out that the current burst of problems—apart from the punitive U.S. intervention in Canada-Cuba relations—is simply a convergence of the inevitable bilateral disputes bound to afflict the world’s richest two-way trade. The money at stake amounts to a relatively puny portion of the billion-dollar-a-day transborder business. And the current U.S. actions are largely driven by election-

year posturing. As such, Canadian authorities expect some of the harsher elements to dissipate after, or even before, the Nov. 5 presidential vote. So far, says one official, “there’s an awful lot of smoke, but

very little fire.”

At the same time,

Canadian authorities are pressing the Americans in an effort to blow away the smoke and prevent fires. But it is hard to keep up with the incendiary blitz of complaints from Kantor’s office. Last week, before Eggleton had completed a memorandum calling for consultations on the Cuba trade issue, Kantor formally challenged as “an unfair trade barrier” a Canadian tax law to protect Canada’s magazines from so-called split-run American periodicals. Ottawa says they amount to dumped products unfairly competing with Canadian publications. Kantor re-

ferred the case, which directly involves Time Warner Inc.’s Sports Illustrated, to the Geneva-based World Trade Organization. But he made clear that his action is the opening shot in a campaign against “Canadian practices in the cultural commu-

nications area.” He cited “broadcasting, copyrights, direct-to-home satellite regulations, and book distribution.”

That is a familiar field to Kantor. As a Los Angeles lawyer from 1975 to 1992, he was a lobbyist for the U.S. National Cable Television Association. His firm represented other clients in the entertainment industry. And in his role as a prominent figure for years in Democratic election campaigns, including Clinton’s, Kantor has been conscious of the industry’s contributions to the Democratic Party. The Washington-based

Center for Responsive Politics, in a study based on reports to the U.S. Federal Election Commission, includes major contributions to the Democrats from entertainment and communications companies in 1995. Among them: $135,000 from Time Warner, $125,000 from Walt Disney Co., $378,000 from MCI Telecommunications Corp., $275,000 from MCA Inc., $373,000 from Miramax Films Corp., and $100,000 from Viacom International. During 1993, his first year running Clinton’s trade policy, Kantor fought a protracted but ultimately losing

battle with France against its policy limiting the screening of American programs on French television.

Now, in effect, the Americans are exporting problems in their election cam-

paign—no one more so than Kantor. Trade has become an issue now that presidential candidate Pat Buchanan has spent two months railing against free trade as a destroyer of American jobs. And Senate Majority Leader Bob Dole, who is Clinton’s Republican opponent-designate, snipes at the administration for being soft on America’s trading partners. Even Kantor’s rare resort to the World Trade Organization in the Sports Illustrated case, instead of using U.S. law, was said

privately to be intended to demonstrate U.S. trust in the world body when it is under attack from political opponents. Ironically, Kantor himself has often snubbed and affronted the organization and its treaty.

In his dual role as U.S. trade representative and a Clinton electioneering power, Kantor is clearly mindful of the need to counter Republican criticism at election time. His cabinet-level post with ambassador rank was his reward for service as Clinton’s 1992 campaign chairman (Clinton has not yet named his 1996 campaign chief). Kantor often turns even wrist-slaps or minor victories in his America-first trade campaign into media events to plug the Clinton government. His news release about the Sports Illustrated case (leaked in advance to selected newspapers) proclaimed: “Kantor announces challenge of discriminatory Canadian magazine practices; cites Clinton administration determination to defend U.S. industries.”

Meanwhile, Kantor, the state depart-

ment and the White House have been hit by a flurry of Canadian protests, diplomatic notes and lobbying. Eggleton sent Kantor a note on the Cuba case last week, a day after Clinton signed into law the so-called Libertad Act, which threatens foreign investors in Cuba with U.S. lawsuits and some traders with retaliation. Calling for consultations, Eggleton said that Canada “expects that the United States will provide sufficient information regarding the implementation and application of this act to enable a full examination of its potential impact.” That is something that Kantor and his officials may not be eager to do—at least until the sweeping measure, often vague on detail, has served its electioneering purpose among Cuban-American voters and campaign contributors. Next week,

Foreign Affairs Minister Lloyd Axworthy plans to press Canada’s case in the Cuba issue at a Washington meeting with U.S.

Secretary of State Warren Christopher. And he will raise other issues, including a burning U.S.Canada dispute over salmon-fishing rights in

British Columbia’s coastal waters.

On the trade front, issues confronting Eggleton and Kantor include American pressure on Canada over steel exports, with U.S. producers complaining about the volume and pricing of Canadian shipments; an American challenge to Canadian tariffs on imports of American egg, poultry

TRADE?

SOFTWOOD LUMBER:

After years of pressure, Canada bowed last month to U.S. demands for a reduction in exports of softwood lumber.

CULTURE:

U.S. officials are challenging a new 80-per-cent excise tax on Canadian editions of U.S. magazines. In addition, Washington has threatened retaliation if Ottawa tries to block American-owned book superstores.

STEEL:

American trade officials have repeatedly accused Canadian companies of selling steel below cost. The result has been an increase in U.S. steel exports to Canada, and a decline in Canadian exports.

DAIRY, CHICKEN AND EGGS:

The United States is now pressing Ottawa to strike down Canadian tariffs on imports of dairy products, poultry and eggs.

and dairy products; and the monitoring of the most recent settlement of a perennial dispute over lumber. Under that deal, Canadian shippers must curb exports to avoid U.S. retaliation. During the mid-February lumber talks, Ambassador Chrétien had to face down a telephoned Kantor demand for a 20-minute deadline on a settlement. Chrétien went to Kantor’s office, apparently calmed him down, and the accord was completed about four hours later that day. Canadian diplomats and trade officials decline to utter criticism of Kantor’s blustering ways openly. But earlier in the lumber talks, the Canadian federal-provincial delegation were cheered by a diagnosis of U.S. trade policy that found it suffering from “Kantoritis.”

That description, read aloud at the Cana-

dian meeting, was an attack by Washington-based business analyst Reginald Dale in the Paris-based International Herald Tribune. The columnist wrote that “U.S. trade policy is suffering from a bad case of Kantoritis—a debilitating disease whose symptoms include aggression, narrow-mindedness and an inability to see the forest for the trees.” Under Kantor, he added, Washington’s policy “has been progressively reduced to a blunt assertion of the special interests of American business.” Others are almost as blunt. During trade talks in 1993, Leon Brittan, Europe’s chief trade negotiator, accused Kantor of “unilateral bullying.” And Washington political scientist Henry Nau argues that, by attacking allies, “U.S. trade policy is damaging U.S. foreign policy interests and achieving little in the way of economic benefits in return.” In a critique published by the American Enterprise Institute titled ‘Trade and Security,” the George Washington University professor states that trade has been separated from foreign policy at the cost of endangering national and global security. In “a ruthless competi-

tion for economic wealth,” says Nau, the policy “generates endless and escalating disputes with America’s friends, and undermines collective efforts to deal with America’s existing and potential enemies.” Right now, suffering from a scourge of Kantoritis, many Canadians—and people around the world—could say amen to that. □