Tuesday, August 7, 2012


The national election in the United States is still three months away, but all the attention – and news reporting – is turning to the campaign.
Trade – with the exception of the North American Free Trade Agreement a quarter of a century ago – has not been a major issue in any national campaign. For the most part, Democrats and Republicans see trade – both exports and exports – as good for the economy.

President Obama.

Candidate Obama is out in the hustings campaigning full time by mostly attacking his opponent rather than defending his accomplishments. That’s because there has been none. The recession continues strong and deep.
But recently Candidate Obama has grasped the catch-phase of wanting to be America’s "in-sourcing" President. He has continued to blast former Massachusetts governor and rich private businessman Mitt Romney as the "out-sourcing" candidate, who made his millions by helping US companies move overseas and taking jobs from Americans.

President Obama has little else to talk about when it comes to trade. His accomplishments over the past four years have been zilch.

When a Presidential candidate has to resort to the "trade" card in campaigning, you can assume that things are indeed desperate.

Now to Mr. Romney.

Apparently Washington Trade Daily had an impact on the Romney campaign a couple of months ago when it published a detailed interview with chief trade campaign advisor Carlo Gutierrez. His answers to our questions were extensive and detailed.
We learned that the article dusted up some controversy within the campaign between those – unlike Mr. Gutierrez – who want candidate Romney to steer away from details on specific issues until necessary.
Just last week Mr. Romney seemed to side with Mr. Gutierrez – and some others in the campaign – by mentioning in a speech in Golden, Colorado, that he would push for free trade with Latin America.
If Mr. Gutierrez – and WTD – is to be believed, expect a real business approach to economic growth, with a lot of focus on tax reductions and trade. Aside from the renewed approach to trade with Latin America – an idea first raised by President Reagan – you can expect Mr. Romney to re-start the nation’s trade engine. Mentioned by Mr. Gutierrez in the interview were closer US trade ties with the fast-growing economies of the Association of Southeast Asian Nations and even a free trade agreement with Japan.

How to tell.

The best scenario for President Obama is that the November 6 election outcome will be very close. But one thing is certain, whoever wins the Presidential "gold" will likely have to deal with a difficult and split Congress.

Political pundits often describe the second term of any sitting President as focusing on foreign policy. They suggest Mr. Obama would naturally turn to international economics and trade rather than repeat failed US military foreign adventures in exotic areas of the world.
What to look for –

US Trade Representative Ron Kirk will not be around for the second term – something he has already said.
Should the White House pick the President’s current chief international economic advisor, Michael Froman, for the post there is hope. There was a lot of "rumor" talk around Washington about a year ago that Mr. Froman – who has demonstrated a positive interest in a forward-moving trade policy – would replace Mr. Kirk at that time. But Mr. Obama is loathe to do away with any of his cabinet members – no matter how badly their performances. So Mr. Kirk stayed on.

(In fact, at that time a high-ranking US trade official asked WTD in confidence – and almost in desperation, but in earnest – when Mr. Froman was coming on board. WTD had no good news for that negotiator.)

If it’s Mr. Froman, you can expect somewhat of a turn around – which could be described as a resurrection from the moribund US trade policy of the past four years.
If it’s someone else – say current Deputy US Trade Representative Demetrios Marantis – look for more of the same in the second term.
A second-term President Obama might even leave the post vacant, since he is still personally committed to a "go-nowhere" plan to build a super trade department, essentially doing away with USTR.

If it’s Romney, look for retiring California conservative Republican David Dreier to assume the USTR post. The current House Rules Committee chair and strong free-trade advocate has been expressing those wishes to friends in Washington for quite some time.
Another big plus for a resurrected US trade policy would be the selection of Sen. Rob Portman of Ohio to be Vice President. Mr. Portman was President Bush’s US Trade Representative and is well respected by pro-trade advocates in the United States and foreign diplomats who knew him during his one-year stint from May 2005 to May 2006. Apparently, he is on Mr. Romney’s short-list of candidates.

Actually a lot hangs in the balance for US – and global – economic recovery.

Jim Berger

No comments:

Post a Comment