Obama Unveils Long-Awaited Trade Agenda

by Leroy Baker, Tax-News.com, New York

04 March 2009

The administration of US President Barack Obama has issued its long-awaited policy stance on the issue of global trade for the coming year, which will see the government attempting to progress three key, but stalled, free trade agreements, albeit with its own political stamp on them.

A document published by the Office of the US Trade Representative on March 3 states that the administration will "promptly, but responsibly" address the issues surrounding the Colombia, Korea and Panama Free Trade Agreements. These agreements were negotiated and signed during the George W. Bush administration but were left unratified by Congress as lawmakers argued over the strength of labor and environmental protection provisions.

The document also revealed that the Obama administration would review the implementation of America's FTAs and bilateral investment treaties "to ensure that they advance the public interest."

"The Bush administration has left a legacy of numerous pending agreements and negotiations," the document notes. "We will conduct extensive outreach and discourse with the public on whether these agreements appropriately advance the interests of the United States and our trading partners."

The policy document also confirms that Obama intends to review the North American Free Trade Agreement (NAFTA), a trilateral trade pact between Canada, Mexico and the US, to identify ways in which NAFTA could be improved "without having an adverse effect on trade."

"We will do this in a collaborative spirit and emphasize ways in which this process can benefit the citizens of all three countries. And, we will consider proposals for new bilateral and regional agreements when they promise to deliver significant benefits consistent with our national economic policies. If new negotiating authority is required, we will seek that from Congress," the document states.

Obama was largely silent on the issue of trade during the 2008 election campaign, but when he did address the issue it sent protectionist alarm bells ringing across the world, especially given that his economic policy is built on a solid 'America first' platform. However, it seems that trade policy under Obama will attempt to achieve the best of both worlds - free trade on the one hand and fair trade on the other - an objective that many are likely to dismiss as an impossible goal.

"Our agenda is to combine the best elements of previous trade policies, especially a rules-based system of global trade, with a determination to make trade policy a powerful contributor to the President’s national economic agenda for revival of the global economy and renewal of growth that benefits all people," the document informs, adding: "If we work together, free and fair trade with a proper regard for social and environmental goals and appropriate political accountability will be a powerful contributor to the national and global well being."

The publication of the policy doument was broadly welcomed by the National Foreign Trade Council (NFTC), a leading business organization advocating an open, rules-based global trading system, although it warned that the attempt to marry free trade principles with a social responsibility agenda will be a difficult and potentially risky juggling act.

“We welcome the agenda so early in the administration, particularly the indication that the administration is prepared to move forward on the Panama FTA and develop a path for progress on the other two outstanding agreements with Colombia and Korea. We also share the Administration’s support for an ambitious Doha Round agenda," President Bill Reinsch commented in a statement issued in response to the policy proposals.

However, Reinsch goes on to caution that: “While we support the laudable social goals articulated in the document, we need to remember that just as trade policy cannot be the solution to all of our domestic economic problems, neither can it solve all the social problems of other nations as we perceive them."

He added: "Trade agreements are reached by negotiation, which means each side must demonstrate flexibilities in order to reach agreement. We certainly do not expect an administration at this point to reveal where its flexibilities may lie, but would remind policymakers that they will inevitably have to address the priorities and concerns of potential negotiating partners."

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