For the past year, U.S. Trade Representative Ron Kirk has been the Obama administration’s equivalent of the Maytag repairman—a capable official with nothing to do. That is about to change.
As part of a broader push for job creation, the president yesterday unveiled an ambitious strategy for doubling U.S. exports over the next five years. Key elements include $2 billion more in export financing, an easing of export technology controls and a new Cabinet office to promote sales of U.S. products abroad. Obama also picked W. James McNerney, CEO of Boeing—one of America’s export champions—to chair the President’s Export Council.
The flurry of activity around trade is belated but welcome, since surging exports have been one of the few sources of job growth lately. It may also put to rest lingering doubts about Obama’s commitment to expanding trade.
During the 2008 campaign, candidate Obama sounded economic nationalist themes and indulged in ritual NAFTA-bashing. He even vowed to reopen that treat to get a better deal for U.S. workers, deeply alarming Canada and other trading partners worried about mounting protectionist sentiment in the United States.
But if Obama’s new push is reassuring to pragmatic progressives, anti-trade activists are donning their battle gear. Lori Wallach, president of Global Trade Watch, recently told Bloomberg News that the Obama administration must deal with the import side of trade to create U.S. jobs and increase innovation.
Obama yesterday invoked America’s economic travails to short-circuit a family squabble among progressives over trade. “We are at a moment where it is absolutely necessary for us to get beyond those old debates…Those who once would oppose any trade agreement now understand that there are new markets and new sectors out there that we need to break into if we want our workers to get ahead.”
In another positive development, House New Democrats this week released a trade agenda of their own. It emphasizes support for small business exports, the need to crack down on intellectual property theft, and, echoing a key PPI theme, the strategic benefits of expanding trade and economic opportunity across the Middle East.
Both the president and the New Dems call for efforts to rekindle progress on the stalled Doha round of global trade talks, and perhaps most controversially, for closing the deal on pending bilateral trade agreements with South Korea, Colombia and Panama. This is bound to provoke a reaction from anti-trade Democrats who see trade as a threat to U.S. jobs and wages. They have a powerful ally in the new House Ways and Means Chairman, Rep. Sandy Levin, a longtime trade skeptic.
Trade is not a panacea for America’s job woes. But as Obama and the New Dems understand, lowering foreign barriers to trade is integral to any credible strategy for U.S. economic growth and innovation. It’s also essential for the United States to resume leadership in forging a rules-based global trading system to keep everyone honest and prevent countries from adopting mercantilist strategies.
Finally, and most important for the long-run, boosting U.S. exports is also critical to re-balancing the global economy. Just as we export more and import less, Asian export powerhouses, especially China, need to import more and spur domestic consumption. Obama’s trade initiative is a small but vital first step toward moving world flows of trade and finance toward a sustainable equilibrium.
