Credit: <a href="">wonderferret</a> (<a href="">CC</a>).
Credit: wonderferret (CC).

Policy Innovations Digital Magazine (2006-2016): Commentary: Obama's Grade on Trade: B

Feb 9, 2010

The Obama administration is earning a "B" on trade policy so far, mostly on the grounds that no news is good news in this area. Some analysts might feel it is more accurate to give the administration an "incomplete."

To evaluate President Obama's trade policy, it is important to remember some context. In recent decades, advocacy for a corporate globalization agenda has been a bipartisan pursuit. Arguably, the Clinton administration was more aggressive, and certainly more effective, in pushing major trade deals than the Bush administration. After all, the passage of NAFTA and the creation of the World Trade Organization happened on Clinton's watch, not Bush's. When Obama took office, many fair-trade advocates worried that he might take up the Clinton mantle and that his White House would behave in a manner very similar to that of the last Democratic administration. That this has not happened so far is encouraging.

During the Bush years the White House worked to create a large number of bilateral, one-on-one trade deals with other countries, most of which represented incremental expansions of the neoliberal NAFTA model. Several of these, including deals with Colombia, Panama, and South Korea, were negotiated by the Bush administration but never passed through Congress. They are now leftovers on Obama's plate. While his administration is under tremendous corporate pressure to push forward these lingering trade pacts, it has thus far resisted.

"With Bush we had defensive trade battles, an average of one a year, his entire time in office," says Todd Tucker, Research Director with Public Citizen's Global Trade Watch. That fair-trade forces have not had to spend their time fighting off new neoliberal trade deals under Obama is "certainly a change, and that's a good thing," he argues. "Harm prevention is a really important step forward."

On another positive note, Obama has been good in terms of opening dialogue with actors who did not get the ear of the last administration, and fair-trade advocates now enjoy significant access to the office of U.S. Trade Representative (USTR) Ron Kirk. The administration has also included progressive voices in advisory groups designed to help shape trade policy.

One example was a subcommittee formed by the administration's Advisory Committee on International Economic Policy to review investment-related aspects of trade treaties. This subcommittee was co-chaired by AFL-CIO Policy Director Thea Lee and included Sarah Anderson of the Institute for Policy Studies. In her analysis of the subcommittee's final recommendations, Anderson emphasized the heavyweight presence of private sector lobbyists on the committee. But she also noted that her seat at the table "was one of many signs of the new opportunities for advocates of progressive change in Washington."

While these developments were positive, there were also worrisome signs on the trade front during Obama's first year. Most notable were the occasional rumblings that the administration might ultimately cave to business and return to pushing some of the stalled trade deals. In early November, Obama reportedly told a group of business leaders in a closed-door meeting that he wanted to pursue a more aggressive approach on trade policy. Speaking about the agreement with South Korea in November, the president stated the he "[wants] to get the deal done" before the end of 2010, and USTR Kirk similarly stated that the administration was "not standing still" with regard to the deal.

In his 2010 State of the Union address, Obama further vowed to "continue to shape a Doha trade agreement that opens global markets, and... strengthen our trade relations in Asia and with key partners like South Korea and Panama and Colombia." Were he to act on these pledges to expand the WTO and enact the stalled bilaterals, his grades would plummet.

Beyond the uncertain fate of the leftover trade agreements, President Obama has yet to implement the promises for trade reform he made on the campaign trail. As a candidate, Obama made repeated criticisms of the "free trade" model. He argued in March 2008, "I voted against CAFTA and never supported NAFTA. NAFTA's shortcomings were evident when signed and we must now amend the agreement to fix them." He vowed to add "binding obligations to the NAFTA agreement to protect the right to collective bargaining" and "binding environmental standards so that companies from one country cannot gain an economic advantage by destroying the environment." So far the administration has yet to reopen discussions on either CAFTA or NAFTA.

At this stage, Obama could push for an "A" grade by supporting the TRADE Act [PDF] , a piece of legislation introduced in the Senate by Sherrod Brown of Ohio and in the House by Representative Mike Michaud of Maine. The majority of House Democrats support this act. If passed, it would require a review of existing trade pacts such as NAFTA and the WTO, and it would spell out guidelines for making labor and environmental protections central parts of future trade deals. The TRADE Act is exactly the kind of policy the administration should implement, and it is consistent with what Obama said he would do during the campaign. As of this writing, the White House has yet to take an official stance.

Mark Engler, a writer based in New York City, is a senior analyst with Foreign Policy In Focus and author of How to Rule the World: The Coming Battle Over the Global Economy (Nation Books, 2008). He can be reached at Research assistance provided by Arthur Phillips.

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