Saturday, March 13, 2010

NEWSFLASH: USTR Abducted By Aliens

Either that, or someone slipped something funky into Ron Kirk's cornflakes yesterday morning because he - gasp! - repeatedly praised imports during his speech at the Executive Summit of the pro-trade American Apparel & Footwear Association.  Here are the key passages that had me (figuratively) spitting out my morning coffee (emphasis mine):
"You may ask: what does that [National Export] Initiative have to do with my company? After all, most of you are more concerned with imports than exports.  But here's the bottom line: trade policies that make it easier for Americans to export abroad make it easier for Americans to get the global inputs they need to do businesses here at home. We cannot achieve one without the other. We must pursue a comprehensive trade strategy....

"And we are working closely with the American textile, apparel, and footwear industries on a proposal in the Doha Round of global trade negotiations that could reduce costs for suppliers, distributors, and consumers by reducing onerous and divergent labeling requirements....

"We are seeking to resolve outstanding issues on the Colombian, Korean, and Panamanian Free Trade Agreements in an effort to move those forward at the appropriate time. When those agreements go into effect, they will create billions of dollars in new market access for American exporters and new sourcing opportunities for American importers.

"We are beginning negotiations toward a new Trans-Pacific Partnership that will expand U.S. opportunities in the Pacific under a high-standard, 21st century agreement. Among other things, that Partnership could promote the development of efficient production and supply chains that include companies like yours. And in our Trans-Pacific Partnership negotiations, we will be working with countries like Vietnam, the second largest source of American apparel imports, to enhance transparency and improve regulatory coherence. Because such negotiations will enhance American competitiveness in the Pacific....

"In particular, trade preference programs like the GSP, ATPA, AGOA, and HOPE are critical for your sourcing. These preference programs expand the choices available to American industries and consumers while also promoting economic opportunities in developing countries....

"When a shipment of your products arrives in America, an army of workers goes into motion. There's the port worker who unloads your container, the truck driver that carries it to a distribution center or a store, the marketing executive that trumpets its arrival, and the retailer who rings up each individual sale. And that's just domestic sales - every foreign sale you make supports American designers, customs and logistics professionals, and financing and transportation experts."
Crazy, huh?  Kirk even referenced Dan Griswold's great new book, Mad About Trade, about the benefits of trade liberalization for American families and businesses.  Amazing.

Now, granted, in a perfect world such sane remarks from the US Trade Representative wouldn't be noteworthy, and it's not like these passages are really a full-throated embrace/defense of import liberalization, and Kirk was speaking before one of the more pro-trade industry groups in the United States, and he still balanced his good "sourcing" comments with lots of bad talk about "reciprocity" and  "fairness" and "enforcement" and export-led growth and even healthcare(!).  But considering that this is the same USTR who (i) issued a 2010 trade agenda that contained not a single word about import liberalization and its benefits, and (ii) recently wrote with a straight face that his meetings with the AFL-CIO, the United Steelworkers, the Sierra Club, Oxfam, and Global Trade Watch represented a "full range of views" on US trade issues, yesterday's speech is a welcome sight.

Then again, it's not all wine and roses either.  Beyond the aforementioned qualifiers, Kirk's statements make clear that this USTR and this White House aren't protectionist luddites; they're just cynically playing politics with the US trade agenda and, by extension, the US economy.  Kirk's speech shows that this administration understands (at some level) the immense benefits of free trade and domestic import liberalization for American families and businesses - Kirk (or his speechwriter) read Griswold's book for crying out loud!  They're just totally unwilling to pursue a real, just and economically-sound trade policy out of fear of the political repercussions - be they from protectionist members of Congress or powerful, anti-trade political supporters (especially the unions).  And that's a real shame, considering the fact that American companies and workers, and the economy in general, could really use all the help they can get right now.

Who knows.  Maybe this pathetic cynicism will dissolve once the healthcare debacle ends (assuming it ever does!), but I have my doubts.  This is an election year afterall, and 2011 will bring a whole host of new political goals and challenges (and the White House is already prepping for 2012).  And this President just doesn't seem willing to spend any of his precious, and dwindling, political capital on advancing free trade, despite clear evidence that he and his team are well-aware of trade's myriad benefits, and that it's just the right thing to do.  In short, trade's a bargaining chip, not priority, for Obama, and there will always be something prettier for him to buy with it.

And that's sad.


Anonymous said...


Do you have an opinion on China's policy of pegging their currency to the dollar? Does this distort trade flows? Obviously, it does, so the better question might be: should it influence our trade policy with China?

Scott Lincicome said...

I've written a lot about China currency over the last few months:

In short, I think that (a) the RMB isn't nearly as undervalued as the currency hawks claim; (b) a significant appreciation probably wouldn't dramatically alter bilateral trade flows; (c) China's currency policies (mostly) hurt them and (mostly) help the US; and (d) unilateral efforts by the US to force China to appreciate its currency will be extremely counterproductive. China knows it needs to appreciate the RMB for its own sake, and the PRC Govt will do that when it thinks such actions won't significantly hurt domestic employment.