June 4, 2010

June 4, 2010 | Commentary on Trade

Less Talk, More Action

President Obama and U.S. Trade Representative Ron Kirk talk a good game of free trade. But so far, the administration has delivered nothing but protectionism.

The administration inherited three all but finalized free-trade agreements (FTAs). Yet despite repeated pledges to nail down pending pacts with South Korea, Colombia and Panama, there has been no discernable progress. The following is a recap of where these deals stand:

KORUS: On May 18, Mr. Kirk met with South Korean Trade Minister Kim Jong-hoon and "reaffirmed his commitment to work closely with Minister Kim on addressing the outstanding issues surrounding the U.S.-Korea FTA so it can move forward." Yet later that day, when asked if anyone from the administration had ever called him requesting specific fixes to KORUS that would help Mr. Obama make good on his pledge to move it forward, Mr. Kim replied, "My phone has not yet rung."

Colombia and Panama: The trade ministers of both countries were supposed to attend the same May 18 U.S. Chamber of Commerce trade conference attended by Mr. Kim, but neither did. It turns out they were busy elsewhere, signing new FTAs. Panama initialed a deal with Canada, while Colombia inked an agreement with the European Union.

In today's fast-moving international economy, standing still is a recipe for American decline. Yet according to Congressional Quarterly, "for the first time in more than a decade, the House and Senate appear likely to let an entire Congress go by without approving a free-trade agreement."

Unfortunately, the administration and Congress have done worse than just stand still. They've actively backtracked, adopting protectionist measures that soothe special interests but leave the vast majority of U.S. companies and their workers even more handicapped in our highly competitive global economy.

One major step backward was the insertion of "Buy America" procurement provisions in last year's $787 billion "stimulus" bill. They delighted Big Labor but incensed our trading partners - especially Canada. The move led many Canadians to question America's reliability as a NAFTA partner and sparked talk of imposing tariffs or other retaliatory measures aimed at U.S. goods.

The U.S. trade representative has had to spend more than a year trying to mend fences with our northern neighbor, which also happens to be our largest trading partner. Last week, Mr. Kirk's shop announced it finally had reached agreement with Canada on some changes to the procurement procedures, but still the administration waffles. Mr. Obama promptly announced he would not sign the agreement until it has been "reviewed by domestic stakeholders in both countries."

Free trade took another step back in the fiscal 2009 omnibus spending bill. Congress approved a provision killing a pilot program that permitted a handful of Mexican truckers access to U.S. highways.

The provision allowed Mr. Obama to make good on a campaign promise to the Teamsters union. But it was a stick in the eye to one of America's closest trading partners. Within weeks, the Mexican government retaliated by slapping tariffs on 89 U.S. agricultural and industrial products that account for $2.4 billion in annual sales to Mexico. The U.S. Chamber of Commerce estimates the retaliatory measures have cost 25,000 American jobs so far.

Since the truck-ban debacle, Mr. Obama says he is "hopeful of fixing" the dispute each time he meets with Mexican President Felipe Calderon. There have been three presidential meetings in 13 months. No resolution yet.

Our nation's struggling economy needs a boost, and that's just what free trade provides. What's needed is action - and fast. Congress could start by approving those three pending FTAs with Korea, Panama and Colombia. And the administration should show some real international leadership, too. It could begin by jump-starting the stalled Doha trade talks to lower trade barriers around the world.

Such actions would benefit far more U.S. workers, companies and consumers than any number of protectionist measures.

James M. Roberts is a research fellow at the Heritage Foundation's Center for International Trade and Economics.

About the Author

James M. Roberts Research Fellow For Economic Freedom and Growth
Center for Trade and Economics (CTE)

Related Issues: Trade

First appeared in The Washington Times