Big Sky Hopes
May 26, 2011
By Dean Kleckner: Chairman, Truth About Trade & Technology
A place called Big Sky can find room for anything but small ambitions. Yet the Asia-Pacific trade ministers who gathered at this resort community in Montana last week sounded distressingly pessimistic.
In a statement joined by U.S. trade representative Ron Kirk, they expressed “collective deep concern” over the fate of the World Trade Organization’s Doha round, adding that “only a major substantive breakthrough” can salvage these global trade talks.
Kirk added his own special note of gloom when he said that he was just “reasonably confident” that America’s three pending free-trade agreements would win congressional approval in the near future. He also warned that slow progress on the Trans-Pacific Partnership (TPP) could delay its next important step until 2012.
The lack of cheer was unsettling because Big Sky is such a scenic and hopeful setting. I see it each winter on my annual snowmobiling trip to Yellowstone National Park. This is truly God’s country--a place that should brighten spirits rather than darken moods.
The despair over Doha is of course old news. Expectations bottomed out a while ago, even though WTO chief Pascal Lamy still shows up at confabs like the one in Big Sky.
By contrast, Kirk’s sudden and unwelcome hesitation on the free-trade agreements was a surprise, but also perhaps an honest appraisal given the Obama administration’s latest gambit: The White House says it won’t submit trade deals with Colombia, Korea, and Panama for legislative approval unless Congress first agrees to spend about $2 billion per year on Trade Adjustment Assistance (TAA), a federal program to help workers who lose their jobs due to foreign competition.
TAA means well. As with so many government initiatives, however, its effectiveness is questionable at best. The Heritage Foundation has pointed out that the most recent version of TAA wound up subsidizing retirement benefits for companies that had gone bankrupt “no matter why they went out of business.” So TAA doesn’t appear to provide a safety net as much as engage in another round of spending first and asking questions later.
As Washington bumps against the debt ceiling, shouldn’t it try a different approach?
Even more troubling are the politics of this new demand. Not long ago, President Obama was singing the praises of international trade and boasting of its potential to create new jobs. Yet his continuing inaction speaks louder than his words--and Nebraska Senator Mike Johanns, who is also a former secretary of agriculture, rightly accused the Obama administration of “moving the goal posts” on free-trade agreements that apparently enjoy strong bipartisan support.
Once again, Washington holds the common interest hostage to the demands of partisanship.
Kirk’s comments on TPP were troubling as well. Right now, nine Pacific Rim nations are formally involved in the trade group. It began with Brunei, Chile, New Zealand, and Singapore. They were followed by the United States, Australia, Malaysia, Peru, and Vietnam. The sooner these countries come together, the sooner the U.S. economy will benefit. Delay is the enemy.
Expansion of TPP would create one of the world’s most important trading blocs. It would also represent a great achievement for the White House, which has promised to double U.S. exports by 2015 but so far lacks a signature accomplishment in the arena of trade diplomacy.
The potential agreements with Colombia, Korea, and Panama were negotiated primarily by the Bush administration. If Obama wants a positive legacy on trade, he has to push for TPP.
The good news is that TPP could even become an even larger success than currently advertised.
Before suffering from the devastation of an earthquake and tsunami, Japan had indicated its interest in the group. The island nation is now struggling to rebuild, but it still possesses the third-largest economy on the planet--and its political leaders remain committed to the idea of joining TPP, even though their recent ordeal has quieted their public enthusiasm.
The United States must fill the silence with a strong voice on trade--one that says the sky is the limit, in Big Sky and beyond.