Who Is Pandering Here?
Listening to President Obama speak before the Business Roundtable yesterday, I nearly choked on my Coke. He sounded almost as wary of surging protectionist sentiment as Francis Fukuyama in a duty-free shop.The necessity of resisting trade skepticism, Obama said, was a lesson from the 1930s, when countries fell into a deadly cycle of predatory tariff hikes and currency devaluations. America needs a “strong statement that encourages trade,” Obama insisted.
Perhaps from Obama's pick for U.S. trade rep? No such luck. At his confirmation before the Senate Finance Committee earlier this week, Dallas Mayor Ron Kirk sounded like he was ready to rip up a series of carefully negotiated trade agreements then and there, unless other countries bowed to the parochial concerns of American unions. Kirk assured senators that he didn’t have “deal fever,” signaling a break with the Bush administration’s rather modest efforts to expand international trade. Instead, he would focus on prosecuting other countries in international trade court and on adding “benchmarks” to deals still awaiting congressional action. Benchmarks? Judging from his testimony, he almost certainly meant adding new conditions to trade agreements, which will slow or even stop them from proceeding. Now that’s a strong statement on trade.
So who was pandering, Obama or his soon-to-be trade rep? During the campaign, observers guessed that Obama really got it. And after wrapping up the Democratic nomination, he acknowledged that his anti-trade rhetoric had been “overheated.” But the administration's enduring incoherence on trade allows other countries -- and Congress, for that matter -- to assume that Obama doesn’t care much about the issue and wouldn’t really mind if they loaded economic rescue packages with odious sops to domestic industries. That hurts everyone, not least of all the American exporters who helped prop up the economy before the financial crisis dealt its latest blows.
And Obama’s position can only be opaque for so long. With an increasingly aggressive group of protectionists in Congress, he will eventually have to take a stronger stand. Let’s hope we get Thursday’s Obama rather than Monday’s Kirk.
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