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The Truth about Trade

RSS By: Dean Kleckner, AgWeb.com

Dean is Chairman Emeritus of 'Truth About Trade & Technology, a nonprofit advocacy group led by a volunteer board of American farmers.

At Last

Oct 20, 2011

 By Dean Kleckner: Des Moines, Iowa

 
At last!
 
After five years of exhausting struggle, Congress finally has approved a trio of free-trade agreements with Colombia, Panama, and South Korea. They’ll create thousands of jobs in the United States, lower prices for consumers, and generate billions of dollars in business opportunities for American-made products and commodities.
 
All told, the agreements will provide a much-needed jolt to an economy that suffers from an unemployment rate of more than 9 percent. Think of this trade package as a jobs bill that doesn’t require the federal government to spend more money or to drive itself deeper into debt.
 
There’s plenty of credit to go around.
 
Let’s start with President Obama. He campaigned for the White House as a protectionist who threatened to renege on important international obligations, such as the North American Free Trade Agreement. After his election, however, Obama felt the weight of the responsibility that comes with occupying the Oval Office--and he had the courage to change his mind on trade, even though it also required him to stand up to powerful special interests within his own party.
 
At times, the president frustrated his newfound allies. Some of us questioned his devotion to the cause of trade. In the end, however, he made good on his commitments, even persuading the UAW to get behind the agreement with South Korea, which is America’s most significant trade deal since NAFTA.
 
Now Obama can claim a substantial victory that will help him achieve his goal of doubling American exports by 2015.
 
His predecessor also deserves high praise. President George W. Bush and his trade representatives negotiated these deals. Without their vision and effort, the pacts with Colombia, Panama, and South Korea never would have become realities.
 
If this were a baseball game, Bush would be the starting pitcher who earns a win and Obama would be the closer who gets a save in a bipartisan triumph.
 
The middle innings, however, were more than a little dicey, due to the obstructionism of Democrats in the House of Representatives, led by Nancy Pelosi. For years, their firm opposition was an insurmountable hurdle. Whereas a number of Senate Democrats appeared ready to join their Republican colleagues in approving these trade agreements, House Democrats behaved as a disciplined bloc of protectionists. While they were in power, they exercised a functional veto over the enabling legislation. Then voters swept them out last November, solving the problem of partisan gridlock.
 
I’m still puzzled about why the passage of these trade agreements took most of the year. With the political pieces in place by January, they could have been approved months ago. Perhaps it shows that gridlock really is alive and well in Washington. Yet this happy ending also reveals that it’s possible to overcome the most entrenched habits of politicians. Last week’s series of votes are better late than never.
 
So what’s next for U.S. trade policy? Obama has talked up the Trans-Pacific Partnership, a potential accord that could improve ties between the United States and a number of countries that surround the Pacific Rim. This would be a remarkable and worthwhile accomplishment, though it’s probably best understood as a long-term objective.
 
In the near term, the most important accomplishments may be defensive. Lawmakers must resist the protectionism that always tempts them during economic hard times and election years. One bad idea already is chugging through Congress. The Senate just approved a bill that would allow the federal government to identify nations that undervalue their currencies, define them as illegal subsidies, and slap special duties on their products.
 
The legislation has a single target: China.
 
As a law, this policy would produce two results. First, American consumers would pay more for products made in China. Second, China would retaliate against American-made goods and services, hurting our exports.
 
Here’s another thought: Instead of igniting a trade war with Beijing, what about negotiating a free-trade agreement?
 
Now that Obama has shown he can close a bilateral deal, maybe he should show us that he can start one.
 
Dean Kleckner chairs Truth About Trade & Technology (www.truthabouttrade.org).
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