President Heads to Asia, Commerce Secretary Downplays Trade

By November 13, 2009Economy, Trade

Commerce Secretary Locke is a stalwart supporter of expanding trade, so these comments are especially disappointing. From Associated Press, “US commerce secretary: Trade pacts must wait“:

SINGAPORE (AP) — Trade agreements with South Korea, Colombia and Panama won’t be put before Congress until it grapples first with President Barack Obama’s pressing legislative goals, the U.S. commerce secretary said Friday.

Commerce Secretary Gary Locke said Obama has an ambitious high-priority legislative agenda focusing on health care, financial regulation and alternative energy.

“Trade agreements are going to have to wait,” he said at a luncheon hosted by the American Chamber of Commerce in Singapore. “Right now, the administration is focused on a very aggressive and very tight legislative agenda.”

This is a bad message in many ways, and its timing is terrible.

Postponing action invites permanent inaction on the trade agreements. President Obama’s legislative agenda is never going to be finished. That’s the nature of legislative agendas. If the President succeeds in winning Congressional approval of health care, financial regulation and cap-and-trade legislation, the resulting higher taxes, increased regulations and expanded power of the federal government will produce so many unintended consequences that legislative fixes will be demanded. At the same time, changing conditions in Iraq and Afghanistan will continue to require an executive branch agenda for Congress.

Delays are also deadly. In his remarks to the Japan Society of Indiana on Wednesday, NAM President John Engler noted:

The United States and Peru signed a Free Trade Agreement in December 2007. That’s the last bilateral trade agreement the U.S. has actually put into effect.

Since then, the EU, Canada, Korea and Japan have jointly completed or are negotiating 31 separate Free Trade Agreements that cover 80 countries.

The United States already standing on the sidelines as other countries create more advantageous trade relationships with one another. Now the Administration would have us head back to the locker room.

The message also undercuts the President as he prepares to meet major trade partners and competitors in Japan, China and Korea. How can he pressure the Chinese to correct the trade imbalance (see yesterday’s post) when the Administration is at the same time saying trade is not one of its priorities? Most observers say the votes are there to enact at least the Colombia and Panama FTAs, and inaction thus appears guided by other domestic political considerations, which is to say, playing up to organized labor. It’s difficult for the President to tell China’s leaders to pay less attention to its own domestic politics on trade when it’s domestic politics appearing to determine the Administration’s trade agenda.

Finally, jobs. President Obama announced plans for a December “jobs summit” this week and there’s talk of another stimulus bill to boost jobs creation.

But delaying action on these pending free trade agreements takes one of your game-changing jobs-creating players off the field. In his Indianapolis remarks, the NAM’s Engler reported key facts: “Last year, Indiana exported $27 billion of goods. About 90 percent of those exports were manufactured goods. Nearly one in every five Indiana factory workers owes his or her job to exports.”

That’s a jobs agenda right there — exporting more. Get back in the game, Mr. President, and make the free trade agreements a priority.

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