A New Emphasis on Trade – or Against Trade?

By December 22, 2008Trade

From Agence France Presse, “Obama signals major shift in US trade policy“:

CHICAGO (AFP) — President-elect Barack Obama has signaled a major shift in US trade policy with a new emphasis on enforceable environmental and labor standards to prevent a “race to the bottom.”

But while these progressive policies may satisfy some critics, they could further complicate stalled WTO negotiations and serve as an excuse for greater protectionism as the United States slips deeper into its worst financial crisis since the Great Depression.

“The incoming president will face more political pressure for protectionism than any other US chief executive since 1930,” said outgoing US Under Secretary of Commerce Christopher Padilla.

“How president-elect Obama responds to this pressure will define the course of the global economy — and America’s economic identity — for a generation,” he said.

The AFP story notes the pending appointment of former Dallas Mayor Ron Kirk, generally pro-trade but no trade expert, as U.S. Trade Representative.

Kirk was introduced last Friday along with U.S. Rep. Hilda Solis (D-CA), as the Labor Secretary in an Obama Administration. Solis has always voted in line with organized labor’s positions, which means opposition to free-trade agreements, that opposition often disguised by demands for labor and environmental add-ons to FTAs. You can read her official statements critical of trade from her House website, here and here. (Today’s Wall Street Journal editorializes on organized labor in political ascendance today in “Quantum of Solis,” highlighting labor’s goal of gutting the Department of Labor’s oversight and transparency programs.)

Secretary of Agriculture Ed Schafer commented on nascent protectionism in an interview on this week’s “America’s Business with Mike Hambrick.” (Interview and highlights here.) Asked about anti-trade sentiment, the Secretary responded:

It’s a huge mistake. Protectionism at this point of time really has a long term effect of holding back your markets, of destroying your markets. We saw it happens in the ‘70s with the grain embargo. It was 10, 15 years before you got it back in shape after we kind of dissed the global marketplace. But the free flow of goods and services right now is what we need. We need opportunity. The American products, as far as quality and consistency, can compete with anybody, anyplace, and when we have opportunities, we simply make the sale. And so our efforts on trade, in my opinion, ought to increase, not decrease.

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