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After almost a year of waiting for a signal of President Obama's intentions on trade policy, Dec. 14 saw a letter from his trade representative, Ron Kirk, stating the administration's intent to enter negotiations on a trade agreement — called the Trans-Pacific Partnership, or TPP — with seven Asian nations in March 2010.
While this is the first positive move on trade since Obama's inauguration, those hopeful that it represents a broader shift away from his protectionist missteps earlier this year will likely be disappointed.
First, the TPP deal might not be worth the effort. Four of the seven current parties (Australia, Singapore, Peru and Chile) already have preferential trade agreements with the U.S., and the other three (New Zealand, Brunei and Vietnam) are not particularly economically significant, Vietnam possibly excepted.
Moreover, the real economic benefits TPP does offer are by no means guaranteed.
Free trade with New Zealand, for example, could bring real benefits to U.S. dairy consumers, who currently pay well above the world market price for dairy products in a sop to American dairy farmers.
However, the U.S. dairy lobby will likely follow the sugar lobby's precedent with the U.S.-Australia FTA by insisting on an industrywide carve-out before any talks even began.
Obama's record on standing up to powerful special interests that benefit from protection — witness his capitulation to organized labor on the Chinese tire decision in September — is not good.
Second, if the administration were as committed to "enhancing U.S. competitiveness and our share of job-creating economic opportunities" as it says it is, it would be working harder to clear the trade decks by pushing the trade deals with Colombia, Panama and South Korea that the previous administration has already negotiated.
The fact that the Obama administration would seek to start new negotiations with fewer economic benefits on the table instead of expending any political capital on controversial agreements already signed is not encouraging.
Ambassador Kirk insists that the administration is taking a long-term view of the potential for the TPP to become a trans-Asian agreement, with the eventual participation of Japan, China and others.
It is true that a broader Asian agreement would indeed be more worthwhile than the deals already pending. But that's the sort of pipe dream that the administration can ponder in the comfortable knowledge that such an outcome would happen on someone else's watch and after the exhibition of someone else's political courage.
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Posted By: veryfedup(25) on 12/28/2009 | 10:18 PM ET
Since when are Peru and Chili in Asia.
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