Obama's new tune on trade
Candidate Obama opposed new free-trade agreements and wanted to renegotiate NAFTA. A global slump has changed his mind.
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Perhaps the "road map" to Obama's overall trade policy will emerge by the end of summer, when the president is expected to deliver his major speech on trade. Though no date or venue for the talk has been set, unofficial word is that it could be timed to complement the Group of 20 summit that the United States will host in Pittsburgh on Sept. 24 and 25.Skip to next paragraph
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In addition to sharing his vision of a comprehensive trade policy, Obama could use such a speech for a more practical purpose. A broad trade-policy address "may be needed to set the stage before any kind of congressional debate can take place," Schott says.
In other words, the administration doesn't want to say "no" to the countries the Bush administration negotiated trade pacts with, Schott says, "so they are going to have to find a way to get the Congress to say 'yes.' "
Already, some Democratic members of Congress are shouting their opposition to any new trade agreements. They're also unveiling what is likely to be their battle theme: that the negotiated free-trade agreements (FTAs) were already wrong for the Bush years and would be an even bigger mistake for an America with high unemployment and struggling workers.
After Mr. Kirk told Congress last month that he was working "furiously" to win approval of the Panama trade pact, Rep. Michael Michaud (D) of Maine said, "The Panama FTA takes us in the wrong direction at a time when our energies should be devoted to getting our economy moving forward again."
Representative Michaud, who is chairman of the House Trade Working Group, criticized the "recycling" of Bush-era accords and added, "We need to change our model."
If a Democratic president facing stiff opposition from his own party on trade issues sounds familiar, it's because President Clinton found himself in the same predicament over NAFTA in 1993. In fact, Obama seems to be following a Clinton example in pursuing approval of another administration's controversial trade accords, says Mr. Orden, who is also a professor of agricultural and trade policy at Virginia Tech in Blacksburg.
"Clinton came in and negotiated side agreements to NAFTA without reopening the whole accord, and now we see Obama doing something very similar," he says. Obama is opting to leave the Panama and other negotiated trade pacts untouched, while entering discussions with the governments in question to produce the kinds of concessions or additional points that might persuade Congress to go along, Orden says.
As for any effort to broadly redefine trade policy, Obama should beware of what happened to Mr. Clinton, Orden also says. "Clinton tried to bring the language of the environment and labor relations into world-trade proceedings, and he ended up frightening the developing countries and setting things back for some time," he says. In the same way, Obama could unwittingly build a "thorns nest" with a trade speech that rubs developing countries the wrong way, he adds.
It's not just the governments of developing countries that will be up in arms, Ms. Tharin of COHA says, if Obama follows through on "new directions" in trade.
"The World Bank and other international institutions, the big corporations and other elites see a strengthening of what we've already been doing as the way to get out of the economic downturn," she says.
"If he really does try to come up with a 'new framework,' " she adds, "I expect to see a battle."•