Clinton Administration Opposes World Bank Proposal to Boost Poor Nations' Exports

The Clinton administration has expressed opposition to a World Bank proposal aimed at increasing exports from the world's poorest and most indebted nations. The proposal, advocated by the World Bank and International Monetary Fund, seeks to allow developing countries to sell goods to the US and other Western nations without facing tariffs or import quotas. This move could provide a significant economic advantage to these countries, surpassing the administration's efforts to have Congress forgive their debts as they undergo economic reforms.

Key Takeaways:

• The Clinton administration is opposing the World Bank proposal due to concerns that it would undermine the support for the Africa trade bill and China's entry into the World Trade Organization.
• The administration fears that committing to unrestricted imports from the most indebted nations could threaten the passage of the Africa bill and China's entry into the WTO.
• The World Bank and I.M.F. proposals would have essentially undercut the Africa bill's protections for American companies, committing the US, Europe, and Japan to unrestricted import of clothing, footwear, or other goods from the most indebted nations.
• Administration officials stated that doing the right thing in this situation is not easy, and they cannot even get more modest measures through Congress.
• The US has a long record of support for and delivery of preferential trade privileges for least-developed countries, but the administration's stance on the World Bank proposal is an example of the complex economic tensions that will be on display in Washington.
• Labor unions and others in Congress have argued against further opening of American markets at a time of record trade deficits, making it difficult to pass policies that benefit poor nations.
• The Africa trade bill, which passed the Senate but stalled in the House, includes requirements that African nations buy American fabrics to export clothing duty-free, making the opening relatively worthless to African weavers or small manufacturers.

Statistics:

• $13 billion: The amount of goods poor African nations export to the US each year, about the same amount of goods Japan exports to the US in a month.
• 10%: The percentage of trade that is protected by tariffs or quotas, restricting the ability of poor nations to export goods.
• 60%: The percentage of the world's population that lives in poverty, highlighting the need for policies that promote trade and economic development.

Sources:

• The New York Times
• World Bank official
• Senior World Bank official
• France, Japan, and the United States as reflected in the World Bank and I.M.F. proposals.