Saturday, March 5, 2011

Crushing the Ridiculous "GOP is Stalling US Trade Policy" Meme Once and For All

US trade policy is a mess right now.  Preference programs and worker retraining programs have expired and pending FTAs with Korea, Colombia and Panama - completed and signed more than four years ago - remain unratified.  And, of course, when the stench of failure wafts into the room, Washington's fingers quickly start pointing.  Thus, several "news" outlets have picked up on a new White House (and congressional Democrat) talking point accusing House Republicans of essentially holding the US trade agenda "hostage" by refusing to consider only the US-Korea FTA (or any other trade legislation) until USTR provides concrete assurances as to when the Colombia and Panama FTAs also will be submitted to Congress.  But does this particular blame-game withstand even the slightest of scrutiny?

Short answer: No.

In a great new op-ed AEI's Phil Levy looks at the history of the FTAs in Congress and thereby provides a thorough evisceration of the silly notion that Republicans are holding things up:
This story can perplex anyone who has not followed the issue over its long history: Republicans favor free trade, so they are blocking the Korea FTA, and the White House is holding out on setting a firm deadline for the Colombia and Panama FTAs, while the secretaries of State and Treasury say these should be done by the end of the year. What’s going on?

The story goes back four years to 2007, when Democrats claimed control of both the House and the Senate. The Bush administration had negotiated and signed four FTAs: Peru (April 2006), Colombia (November 2006), Panama (June 2007), and South Korea (June 2007). Congressional Democrats roundly criticized these agreements and demanded a new approach.

White House negotiators sat down with congressional leaders and reached an accord on May 10, 2007 (the date became memorialized as the agreement’s name). President Bush committed, among other concessions, to expand the coverage of labor and environmental issues in U.S. FTAs. In turn, the Bush team thought it had secured a promise that all four pending FTAs would come up for a vote.

The labor and environmental provisions of the agreements were revised, per White House promises, but only the Peru FTA came up for a vote (and was approved). It turned out to be one-and-done. When the Bush administration submitted the Colombia FTA, then-House Speaker Nancy Pelosi commanded a rewrite of the rules governing FTAs and blocked a vote.

Since then, U.S. trade policy has been dormant. President Obama, both in office and as a candidate, said that he approves of the idea of free trade agreements, but that these pending deals are flawed and need mending. Such criticism never delved into particulars. The audience was left to imagine what the flaws might be and to speculate about the magnitude of the required fixes.

This long period of nebulous discontent with the pending FTAs seemed to draw to a close last year. In June 2010, President Obama announced that he would conclude a revision of the South Korea FTA at a previously scheduled November summit in Seoul. Trade aficionados eagerly anticipated the unveiling. What would these revolutionary reworkings of trade agreements look like? What kind of momentous changes had the Obama trade team been secretly cooking up over the years?

Oddly, the June announcement was not followed promptly by a list of demands for revising the Korea FTA. As late as October 2010, the Koreans were still complaining that they had not received a formal U.S. proposal. The delay ended up embarrassing President Obama, as agreement was not reached in time and he was compelled to stand up in Seoul and declare that he and his counterpart had failed. Only on December 3 did the two sides finally settle, after what totaled less than two months of serious talks....

It is worth remembering that, in economic terms, the U.S. trade relationship with Korea is substantially bigger and more complex than those with Colombia or Panama. The brevity of actual negotiation with Korea and the limited nature of the changes suggest that the administration’s delay on the other agreements has been due more to political concerns and a lack of resolve than to substantive criticism.

The experience with the May 10 agreement and repeated empty promises of future progress have made Republicans wary of another one-and-done, in which Korea would pass but then the trade agenda would stall once more. Calls for broader trade progress have been bipartisan. This week, 67 of the 87 freshman Republicans in the House signed a letter calling on the president to move forward with all three pending FTAs by July 1, when Europe’s FTA with Korea comes into force. Senate Finance Committee Chairman Max Baucus (D-Montana) issued a statement: “The administration needs to quickly resolve all outstanding issues so Congress can approve all three free trade agreements as soon as possible this year and help create more jobs here at home.”

Perhaps as a result of pressure in the current standoff, Washington Trade Daily reports that U.S. Trade Representative Ron Kirk will now present specific demands and a timeline for Panama and Colombia at a March 9 Senate Finance hearing. If so, the list of particulars will arrive only four years, three months, and 15 days after the Colombia agreement was signed.

Who has been stalling whom?
Excellent stuff.  I'd only add one other point - and something that's obvious to anyone who understands how FTAs are implemented in the United States: under US law, the President, and he alone, determines when Congress will consider an FTA's official implementing legislation.  Thus, President Obama alone controls the agreements' timing and has controlled it for the past 26 months.  So when he and his party had complete run of Washington, they could've implemented only the KORUS (as the White House now wants), but, with an eye on the 2010 elections, they did absolutely nothing instead.  Now, the President has a little less control of Washington, but he has an extremely trade-supportive (and rightly-suspicious) GOP that wants little more than to get all of these deals done as soon as humanly possible.  And yet the FTAs still collect dust, despite the indisputable fact that all three long-delayed agreements could easily pass both chambers tomorrow with bipartisan (and overwhelming Republican) support.

So, yes, this is a hostage situation, but it's the White House, not the GOP who's holding all of the hostages.  After 26 months of stalling, the President now wants to release only one hostage and still restrain the other two (in order to appease the political gods).  House Republicans aren't willing to leave those other FTAs hanging, so they're using the tiny amount of leverage that they have - the knowledge that the President doesn't want his "special hostage" (KORUS) to die - in an attempt to save all three hostages.  So the fate of the KORUS is still in the President's hands - where it has been since his inauguration - and he alone decides if the agreement lives or dies.  But he now has to make that decision on the Republicans' terms.

Put another way, the President is still driving the KORUS bus; the GOP is just giving him an acceptable roadmap to getting it, and the rest of the US trade agenda, home.

Hopefully, the President will finally get behind the wheel and start driving.


John B. said...

"Thus, several "news" outlets have picked up on a new White House (and congressional Democrat) talking point accusing House Republicans of essentially holding the US trade agenda "hostage" by refusing to consider only the US-Korea FTA (or any other trade legislation) until USTR provides concrete assurances as to when the Colombia and Panama FTAs also will be submitted to Congress. But does this particular blame-game withstand even the slightest of scrutiny?"

A better question is whether your analysis stand up to scrutiny. House Republicans are not asking for "assurances" about Colombia and Panama. They have issued an ultimatum: the House will not consider Korea unless Colombia and Panama come up with it. That's extortion in my book.

Scott Lincicome said...

That's pretty laughable, John.

See, e.g., here:

and here:

Now, see if your description of this process or mine is more accurate (hint: it's mine). And then check to see who's still running the show, USTR or Dave Camp (hint: it's not the Republican).

I suggest that you stop reading/believing Sandy Levin's press releases and start reading the, you know, actual news (i.e., NOT the NYT, natch).