President Obama
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Posted Tuesday September 28, 2010
From WWD Issue 09/28/2010
WASHINGTON — The Obama administration is walking a fine line as it looks to strengthen its trade credentials.
The administration is balancing a goal of doubling exports in five years to $3.14 trillion and moving forward with free trade initiatives against stepped-up enforcement of existing trade agreements. It is also reviewing the U.S. relationship with trade partners.
It’s been 20 months since President Obama took office, following a long campaign leaning toward protectionism, and his trade agenda has evolved into a bifurcated strategy — emphasizing enforcement by bringing cases against illegal trade practices to the World Trade Organization, and moving slowly on free trade agreements negotiated by the Bush administration that it felt were not strong enough in areas such as labor rights on the one hand, and opening markets for U.S. exports on the other.
The centerpiece of the President’s trade agenda so far has been the National Export Initiative, which aims to double exports in five years.
In its first annual report to the President, his “export promotion cabinet” made several recommendations on how to achieve the goal, such as providing more access to export financing credit for small and medium-size businesses, removing trade barriers to U.S. exports and passing a free trade agreement with South Korea.
“One part of the National Export Initiative and overall strategy is to further liberalize trade and enforce our existing trade agreements and trade rights,” said Mike Froman, deputy national security adviser for International Economic Affairs at the White House. “With regard to the FTAs, the president has directed U.S. Trade Representative Ron Kirk to work with the Koreans with the objective of resolving outstanding issues for his trip to Seoul in November and then bring it to Congress as soon as possible thereafter, assuming we can resolve outstanding issues.”
He was less specific about the timing on trade deals with Panama and Colombia.
The President’s trade agenda also encompasses export promotion such as government-sponsored trade events and negotiations on a regional Asia-Pacific trade pact known as the Trans-Pacific Partnership with seven other nations.
“They’ve modestly ramped up the rhetoric without ramping up the substantive action that has to go along with the rhetoric to turn it into some sort of reality,” said Phillip Swagel, a visiting professor at the McDonough School of Business at Georgetown University, and director of the school’s Center for Financial Institutions, Policy and Governance. “To me, it is a little schizophrenic in trade with an administration that knows an open trade regime is part of a modern economy but has not done more and is not willing to really commit.”
Gary Hufbauer, senior fellow at the Peter G. Peterson Institute for International Economics, said the President has put trade liberalization aside to focus on working with international partners in various forums to get the world economy back on track after the global financial crisis.
“Most people would say he will get more optimistic and in a constructive mood about trade,” said Hufbauer. “The administration has pinned a lot on doubling exports, and the President and his economic team see [the strategy as being] led off with doubling exports and jobs and then we can explain the FTAs as a way of getting there.”