President Uribe of Colombia meets with President Obama in the White House Monday. The Obama Administration has embraced trade as an impetus for exports and jobs, much more than one would have expected based on the 2008 campaign rhetoric. U.S. Trade Representative Ron Kirk especially has emerged as a consistent and clear advocate of trade agreements to boost the U.S. economy.

Now it’s time for the President to be just as clear, by making this statement: “I call on Congress to enact the U.S.-Colombia Free Trade Agreement as soon as it returns to Washington from the Fourth of July break.”

For more, see this paper from the Heritage Foundation, “President Obama and Colombia’s Uribe Meeting: A Pivotal Hemispheric Encounter.” The National Association of Manufacturers has a fact sheet and materials on the U.S.-Colombia FTA here.

From the Wall Street Journal (subscription), “Trade Official Says No Need To Redo Nafta“:

WASHINGTON — The top U.S. trade official said it isn’t necessary to renegotiate the North American Free Trade Agreement, despite a campaign promise by President Barack Obama to strengthen the pact’s labor and environmental provisions.

“The president has said we will look at all options, but I think they can be addressed without having to reopen the agreement,” U.S. Trade Representative Ron Kirk told reporters Monday in a conference call.

From CQ Politics, “Free Trade Returns to the Table“:

On the heels of the Summit of the Americas in Trinidad and Tobago, U.S. Trade Representative Ron Kirk said Monday that a delegation from Panama will visit Washington this week to try to resolve disputes over the U.S.-Panama trade deal. Kirk added that President Obama hopes to clear remaining obstacles to a separate pact with Colombia.

Ultimately, Obama — who met with Colombian President Alvaro Uribe during the summit — believes that “a resolution of the Colombia trade agreement would be a good thing for both economies,” Kirk said.

And Bloomberg, “Obama works to bolster NAFTA.”
Very positive developments, and Ambassador Kirk is doing a fine representing the pro-growth, pro-trade arguments. When the February trade data come out earlier this month, Kirk issued a news release making the case for more trade and trade agreements, “Ambassador Kirk Says Trade Data Underscores Need to Open Markets to U.S. Goods.” There were ways to spin the data into an anti-trade message, but Kirk — and the Obama Administration — chose the pro-trade angle. Which is, of course, the pro-jobs angle, too.

Former Dallas Mayor Ron Kirk, speaking at the U.S. Conference on Mayors, about his belief in the value of trade, as reported by Reuters:

[Kirk] told the U.S. Conference of Mayors that he hoped to be confirmed by the Senate within the next two or three weeks, and joked that he’d been warned by his 19-year-old daughter he was taking an unpopular job.

“‘Dad, this is cool, except for everybody hates your office and everybody hates the WTO (World Trade Organization). Why would you do this?’” Kirk said, recounting her words in mostly light-hearted remarks to the mayor’s group.

“And in short, I told her because it’s too important. Our economy is too important. The challenges that face our communities are so big that we can’t afford to take anything out of our economic toolbox, including trade,” Kirk said.

On Friday, President Bush signed the proclamation putting the U.S.-Peru Trade Agreement into full effect. Ways & Means Chairman Charlie Rangel (D-NY), the AFL-CIO and various environmentalist groups objected to the signing, as BusinessWeek reports. The groups sent a news release Friday, and we call attention to the AFL-CIO’s argument:

“Peru’s labor laws still fall far short of meeting International Labor Organization standards, and we are deeply disappointed with the Bush administration’s decision to rush implementation without first securing compliance with the agreement’s provisions,” said Thea Lee, Policy Director at the AFL-CIO. “This represents a wasted opportunity and shows poor faith on the part of our own government.”

The AFL-CIO seems awfully intent on subjugating itself to international bodies and foreign organizations, as in its proud declaraton, “Global Unions Will Help Push Employee Free Choice.”

So change the name already: IFL-CIO.

The 111th Congress begins, Presidents ex- and -elect meet. President-elect Obama and his family have sconced to Washington (the Hay-Adams), and he meets this afternoon with Congressional leadership on the economy. More groups lay claim to financial relief and economic stimulus legislation. Or so one anticipates.

Rod Blagojevich. Roland Burris. Norm Coleman. Al Franken. Bill Richardson. Caroline Kennedy. Etc.

The House convenes at noon Tuesday, adopts its rules, and on Wednesday meets in joint session to count the electoral ballots. Also on the floor agenda are two prominent bills passed in the last House, expanding the grounds for suing employers on wage and gender discrimination: The Lilly Ledbetter Fair Pay Act and the Paycheck Fairness Act. For the House floor schedule, see the Majority Leader’s weekly report.

The Senate also convenes Tuesday noon. Even before the nominations are made official, Senate committees begin (pre-)confirmation hearings. Senate HELP Committee hears from Tom Daschle for HHS Secretary on Thursday, and Rep. Hilda Solis for Labor on Friday.

President Bush hosts a private lunch Wednesday for President-elect Obama and the former presidents, Ford, Carter, Clinton and the first Bush. Will they screen Frost/Nixon? President-elect Obama is expected to give a major speech on the economy on Thursday.

Traffic will be HORRIBLE this week in D.C.

House Hearings: House Financial Services kicks off a busy week today with “Assessing the Madoff Ponzi and the Need for Regulatory Reform.” On Wednesday, it meets on “Priorities for the Next Administration: Use of TARP Funds under EESA.” Also Wednesday, House Education and Labor holds a “forum” — not a bipartisan hearing, with authority to act — “An Economic Recovery and Job Creation Plan.” (See this article in The Hill.)

Senate Hearings: On Thursday, Senate Energy and Natural resources holds a hearing on energy security challenges. Also Thursday, Environment and Public Works meets for “Oversight Hearing on the Tennessee Valley Authority and the Recent Major Coal Ash Spill.”

Executive Branch: President Bush and the First Lady have dinner tonight with the Joint Chiefs of Staff and combatant commanders. On Tuesday, he hosts a lunch for UN Secretary-General Ban Ki-moon and Mrs. Ban Soon-taek. Treasury Secretary Henry Paulson speaks Wednesday in D.C. at the Economic Club, “Role of the GSEs in Supporting the Housing Recovery.” U.S. Trade Representative Susan Schwab is in Geneva today and holds a press briefing there Tuesday. She then travels to Las Vegas for the 2009 International Consumer Electronics Show.

Economic Reports: The big report this week comes from the Department of Labor on Friday, December employment figures. For the full week’s list of reports, see this Briefing.com entry.

Perhaps overlooked in the holiday rush, the winter storms and media slumber was the U.S. recognition of Costa Rica’s official entry into Central American Free Trade Agreement, also known as CAFTA-DR (the DR being Dominican Republic). The completion of CAFTA represents an important reaffirmation of trade’s economic value and importance in supporting Latin America’s democracies. We hope the Obama Administration recognizes the opportunities that should be embraced.

Reuters, “Bush clears way for Costa Rica to join CAFTA“:

WASHINGTON (Reuters) - President George W. Bush cleared the way on Tuesday for Costa Rica to formally join a regional free trade agreement between the United States, the Dominican Republic and four other Central American countries.

Bush issued a proclamation that brings the pact into force between the United States and Costa Rica on January 1.

“This step marks an important milestone in our relationship with Costa Rica, building on our strong economic and political partnership,” U.S. Trade Representative Susan Schwab said.

More…

• Presidential proclamation, “To Implement the Dominican Republic-Central America-United States Free Trade Agreement with Respect to Costa Rica and for Other Purposes.“
• U.S. Trade Representative, “Statement of U.S. Trade Representative Susan C. Schwab Regarding Entry into Force of the CAFTA-DR for Costa Rica.“
• The USTR’s website with the text and background of CAFTA-DR is here.

Usually this sort of Christmas week release is designed by the releasing party, in this case the White House, to bury the news. That seems less likely this time, as various delays and process steps ran up against a December 31, 2008, deadline for action. (See this article from Inside Costa Rica for the timeline.)

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.

President Bush spoke to a gathering of the American Enterprise Institute today at the Mayflower Hotel, answering questions from the AEI’s Christopher DeMuth. We appreciated this comment from the President:

I’m worried about protectionism. Protectionism tends to be the twin of isolationism. And I’m worried about protectionism because if you study the economic past, protectionism is what caused the Great Depression to be a greater depression — Smoot-Hawley tariff. If you’re interested in development and helping poor nations become less poor, then you ought to be an advocate for trade. It’s one thing to give out grants, but the amount of wealth generated by trade overwhelms the amount of money that the world gives out in grants.

Which reminds us of this recent comment by Iain Murray of the Competitive Enterprise Institute after Rep. Becerra decided not to become U.S. Trade Representative:

Not only would successful completion of the Doha round bring great benefit to the US, it would be the single best thing Obama could do for international development. The assembled economic superstars of the Copenhagen Consensus found that it would bring $17 billion worth of benefits to developing countries by 2015. However, because the benefits get bigger as those countries develop, projecting them out to the end of the century results in trillions of dollars of benefits, which will translate into such things as increased resiliency to extreme weather events, which means much less damage from global warming (if it happens). A joined-up thinker would make trade his #1 anti-global-warming strategy, if nothing else. Instead, we have a strategy aimed at making people worldwide poorer by raising energy costs.

BusinessWeek, “Obama Said To Pick Xavier Becerra for US Trade Rep”

Is another key economic post about to be filled by President-Elect Barack Obama? Even as he called a Chicago press conference to announce the expected nomination of New Mexico Governor Bill Richardson to head the Commerce Department this morning, Washington was filled with talk that he has settled on a little-known California Congressman to be US Trade Representative. Congressional Quarterly reported that Obama has asked Xavier Becerra , who has represented Los Angeles in the House of Representatives for 15 years, to fill the key post. The US Trade Representative is the government’s primary negotiator on trade agreements such as the now stalled Doha Round—aimed at expanding trade in services and other sectors and reforming agricultural subsidies—or pacts such as those set with Columbia and South Korea which are stuck in Congress.

The story cites a number of business and free-market sources concerned about Becerra’s mixed record on trade — anti-CAFTA, anti-trade promotion authority, but pro trade agreements with Peru and Chile. While he voted for NAFTA, he now expresses regrets. We note that Becerra has been moving up on Ways & Means and had leadership aspirations — recently being elected caucus vice-chairman — making party-loyal votes increasingly important.

We collected Rep. Becerra’s votes on NAM Key Votes related to trade since the 106th Congress (1999-2000).

You can read them in the extended below.

UPDATE (6:20 p.m.): From Reuters:

“Looking at his voting record, he’s certainly not a protectionist and he’s certainly not a total free trader,” said Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers.

“If he were selected, I would not see it as a sign the administration is throwing in the towel on trade. I believe he would have an open mind and be pragmatic.”

Vargo said he was convinced Obama and manufacturers share the same goal of expanding trade, despite some differences.

Statement from Ambassador Susan C. Schwab, U.S. Trade Representative

“While we made good progress during the past week, it is clear that despite our best efforts we will not be able to reach a breakthrough at this time.

“There should be no question, we made important progress. Even today, 5 of the 7 countries in the leadership group were prepared to accept the Friday proposal by Director General Lamy. We gained insights into what members are prepared to offer on services at the signaling conference this weekend, greater clarity on what a modalities package might look like, and saw a constructive attitude in attempting to solve many other issues that have been preventing progress in the negotiations.

“To ensure that the advances we made this week are not lost, the United States will continue to stand by our current offers, but we maintain that they are still contingent on others coming forward with ambitious offers that will create new market access. So far, that ambition is not evident.

“Regrettably, our negotiations deadlocked on the scope of a safeguard mechanism to remedy surges in imported agricultural products.

“Any safeguard mechanism must distinguish between the legitimate need to address exceptional situations involving sudden and extreme import surges and a mechanism that can be abused.

“In the face of a global food price crisis, we simply could not agree to a result that would raise more barriers to world food trade.

“Certain members sought increased flexibilities that would have allowed them to apply tariffs that, in some cases, would exceed their current WTO bindings. This would have moved the global trading system backwards – exactly contrary to the purposes of a negotiation intended to expand trade and economic growth.

“Throughout these negotiations, the United States has been strongly committed and willing to make the tough choices necessary to achieve an ambitious breakthrough. Since the launch of the Round, we have worked tirelessly, traveling hundreds of thousands of miles, spending countless hours negotiating in good faith, all to sustain the Round and bring together a development outcome that would open new markets and create new trade flows.

“The United States remains committed to demonstrating the leadership necessary to achieve an ambitious result. I look forward to conferring with my counterparts in the coming weeks as we work to achieve that outcome.”

-# # #

Updated and bumped to the top.

From a statement from NAM President and CEO John Engler:

I regret to say that, despite incredible efforts on the part of U.S. Trade Representative Susan Schwab, Assistant to the President Dan Price and the entire U.S. negotiating team, WTO members declined to agree on terms that could have provided greater opportunities for trade of manufactured goods.

Time and again at the Geneva meetings, China and India reiterated how they could not lower their barriers, but insisted we must lower ours. Revealing the sort of negotiation he had in mind, Indian Trade Minister Nath, for example, remarked that cars will no longer be made in Detroit and Düsseldorf but in Asia, a process he seeks to foster by maintaining India’s impenetrable barriers against U.S. cars while having virtually open access to our car markets.

The “Special Safeguard Mechanism” demanded by China and India for their agricultural sectors was the final straw. That mechanism would have violated one of the most basic tenets of the world trading system: nations do not violate their tariff bindings by raising tariffs above the legally-bound levels. Once an exception is made, no matter how small, the entire world trading system could begin to unravel. The Doha Round was supposed to move world trade forward, not backwards.

 It is regrettable that China and India in the end refused to stick with the rules and wishes of the majority of countries. However, we must face the reality of what they did. It is important to note, however, that other developing countries, especially Brazil, made it plain during the Geneva talks that they were prepared to enter into give and take negotiations, and that is a positive development.

For Frank Vargo’s reports from Geneva, please go here.

See also USTR statement, news coverage.