Companies Give Cautious Welcome To US Trade Enforcement Initiative

by Mike Godfrey, Tax-News.com, Washington

22 July 2009

The business lobby has welcomed the Obama administration’s renewed determination to enforce world trade laws to the benefit of America’s producers and consumers, but has cautioned that such a policy should go hand-in-hand with expanding opportunities for free trade.

Responding to a recent speech by US Trade Representative Ron Kirk, in which he outlined that Washington would be taking a more aggressive stand against trading law violations by treaty partners in areas such as illegal tariffs, National Foreign Trade Council (NFTC) said that completing pending trade agreements and negotiating new trade deals should also be a priority for Obama.

“Stronger enforcement is a good thing, and Ambassador Kirk has zeroed in on several of the important areas where there is a lot of work to be done,” said NFTC President Bill Reinsch. “At the same time, a comprehensive trade policy needs more than one leg. We also need to be actively promoting American products and pursuing trade agreements, both multilateral and bilateral, that will expand trade and thereby help our economy grow and create new jobs. We look forward to hearing about the other legs of the Administration’s trade policy soon.”

“In particular, we encourage the Administration to redouble efforts to conclude a global trade deal and enact outstanding bilateral trade agreements, as well as to pursue innovative strategies that would unlock new markets for US businesses and workers. For example, the United States should take a leadership role in promoting trade in green technologies and introducing new ideas into the global trading system like a next-generation information technology agreement,” Reinsch added.

The United States has free trade agreements with Columbia, Panama and South Korea waiting to be ratified, all of which were signed under the last Bush administration, but were blocked by the Democratic majority in Congress over labor, environmental, and, in the case of Panama, banking secrecy concerns.

Beyond the completion of existing agreements however, the Obama administration has shown little enthusiasm for expanding its bilateral or multilateral free trade agreement network. Indeed, Kirk told the Senate Finance Committee in his nomination hearing earlier this year that he did not come to the job with “deal fever.”

“We're not going to do deals just for the sake of doing some,” he informed the committee.

Kirk’s speech was also given a qualified endorsement by the US Chamber of Commerce.

“Ambassador Kirk is right to use all the tools in his enforcement toolbox, starting with consultations, which have already helped his team settle some long-running disputes,” said Commerce Senior Vice President for International Affairs Myron Brilliant.

However, when it comes to playing by the world trade rules, the Chamber noted that Washington does not always practice what it preaches.

Enforcement cuts both ways,” observed Brilliant. “The United States has not always lived up to its own commitments under trade agreements, as we’ve seen in the case of cross-border trucking with Mexico. Retaliatory tariffs have already cost thousands of American jobs. Keeping our own trade commitments gives us credibility when we call on others to keep their own.”

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