Clinton's Art of the Deal

By Janice Castro

Shifts in history aren't usually this well orchestrated, even in Germany. Last week the Allies formally ended their 49-year occupation of Berlin, withdrawing the last of their troops; Chancellor Helmut Kohl, U.S. Secretary of State Warren Christopher, British Prime Minister John Major and French President Francois Mitterrand marked the occasion by delivering heartfelt speeches about friendships forged in conflict. But even as ordinary Berliners were toasting the departing American soldiers, a few blocks away Germany's business leaders were greeting a star-studded U.S. corporate delegation eager to get the new era of peace and prosperity off to a lucrative start. Among the Americans: General Motors ceo John Smith, IBM chairman Louis Gerstner, Goldman Sachs chief Stephen Friedman, Motorola's Robert Galvin, Morgan Stanley's Richard Fisher and Dwayne Andreas of Archer-Daniels-Midland. Said U.S. Ambassador to Germany Richard Holbrooke: "For almost five decades in the postwar period, the relationship ((between the U.S. and Europe)) was basically military. The departure of the troops from Berlin represents the beginning of an emphasis on trade and economics."

Very simple economics: "Buy American." For all the arguments about whether Bill Clinton is a New Democrat or an old one, when it comes to pushing U.S. business interests abroad, no recent President has demonstrated Clinton's willingness to roll up his sleeves and dive into the sometimes grubby details of international dealmaking, or "national export policy," as it is styled by the Administration.

Clinton, in fact, is earning a reputation as Closer in Chief. If George Bush was famous for getting out the Filofax and phoning world leaders in pursuit of diplomatic goals, it was Bill Clinton who picked up the phone last summer and talked King Fahd of Saudi Arabia into buying $6 billion worth of Boeing and McDonnell Douglas civilian aircraft, and then got the Export-Import Bank to sweeten the deal so that European rival Airbus could not steal it away. Last May the President helped AT&T close a $4 billion deal for Saudi telecommunications modernization. He intervened again last June to persuade the Brazilian government to award a $1.4 billion radar project to Raytheon.

Whereas other Presidents might have viewed such direct involvement as unfair interference with the free market -- or maybe just declasse mercantilism -- Clinton, the putative populist, has turned out to be a natural in the role of salesman. It is not, of course, a selfless role: Administration officials maintain that by boosting U.S. exports, 13 million new American jobs can be created by the year 2000. To drive home the point after the President helped close the Boeing deal, Vice President Al Gore visited a Boeing plant in Seattle to announce the good news to cheering workers there.

Corporate leaders are now clamoring for seats on Commerce Secretary Ron Brown's plane whenever he ventures abroad to drum up trade. Brown -- glad- handing, glib, a kind of uber-Jaycee -- is focusing his efforts mostly on such large emerging markets as Indonesia, South Korea and Latin America. China is the biggest prize: during the next five years, as it struggles to industrialize as rapidly as possible, the People's Republic is expected to go on a $1 trillion shopping spree for foreign technology. Leading a group of 24 U.S. business executives on a whirlwind trip to China two weeks ago, Brown helped net deals worth nearly $6 billion. The agreements included a commitment by Shanghai Airlines to purchase 11 Boeing 757 passenger jets ($1 billion), a telecommunications contract for AT&T ($500 million) and a $1 billion deal for the New Orleans-based Entergy Corporation to build an electric-power plant. While some of these transactions had been in the works for more than a year, sources close to the negotiations said the Chinese side did not sign off on them until Brown's road show came to town.

It remains to be seen how much Clinton will reap politically for his team's efforts at succoring Big Business. Since his Inauguration, the Democratic Party has received record amounts of "soft money" donations, largely from corporate givers -- some of whom, perhaps not coincidentally, have accompanied Brown on his jaunts. Yet businessmen and -women say they remain uneasy with an Administration that seems to understand their needs on the road but is all too willing to criticize -- or tax -- them in order to pursue domestic initiatives. Complains Bruce Josten, the U.S. Chamber of Commerce senior vice president for policy: "One day the President is bashing pharmaceutical companies. The next day he is breaking down doors to sell exports in China and Saudi Arabia. This Administration talks very pro-business in some respects, yet Secretary of Labor ((Robert)) Reich will go to an AFL-CIO convention and say, 'Your agenda is our agenda. We need bigger and stronger unions.' That leaves business confused." Well, maybe so. But when Ron Brown starts packing his bags, some of the most powerful executives in corporate America start packing theirs.

With reporting by William Dowell/Hong Kong, Suneel Ratan and Adam Zagorin/Washington and Bruce van Voorst/Berlin