The Truth about Trade
Dean is Chairman Emeritus of 'Truth About Trade & Technology, a nonprofit advocacy group led by a volunteer board of American farmers.
Strengthening the State of the Union
Jan 21, 2011
For President Obama, last year’s State of the Union address was a conversion experience. The man who once had talked about quitting NAFTA announced that he had become a born-again free trader. He outlined a set of specific plans and objectives for the United States to pursue as it seeks to improve its place in the global economy.
This year’s speech, scheduled for next Tuesday, probably won’t contain a similar free-trade surprise. But it will give the president an opportunity to deliver a progress report on what he has done over the last 12 months--as well as a chance to outline the steps he’s taking to meet the goals he set for himself and his administration.
He can begin with an excellent piece of news. In 2010, U.S. exports grew by about 17 percent--one of the fastest rates of growth on record.
Obama doesn’t deserve much credit for this accomplishment. It has more to do with business cycles and the productivity of American workers than anything his administration has done.
But if he wants to brag a little, that’s fine with me. Last year’s export growth puts the president on track to meet the most ambitious goal he outlined a year ago, when he said he wanted U.S. exports to double in five years. Hitting this target in 2015 will require similar rates of growth over the next four years--and the only way that can happen is for Obama to work with Congress and adopt a series of trade measures that will make it easier for Americans to buy and sell goods and services across borders.
So I say let him boast a bit next week, bask in the applause, and leave the Capitol with a revived commitment to do what it will take. Perhaps new White House Chief of Staff William Daley, who helped President Clinton win approval of NAFTA in 1993, will give his boss a pat on the back.
Obama simply can’t allow the United States to coast any longer. Earlier this month, the annual Index of Economic Freedom gave the United States its lowest score in a decade. Its rank among the countries of the world dropped from #8 to #9.
A significant reason for the slip is that we lost points in the category of trade freedom. “Anti-dumping and countervailing duties laws, ‘buy American’ procurement rules, high out-of-quota tariffs, services market access restrictions, import licensing, restrictive labeling and standards, and export-promotion programs and subsidies add to the cost of trade,” said the report.
The way forward is clear: Obama must make good on his pledge in last year’s State of the Union to push for congressional approval of free-trade deals with Colombia, Panama, and South Korea. One effective strategy might be to take up the proposal of Speaker of the House John Boehner and combine all three pacts into a single up-or-down vote. The State of the Union address, when Obama stands just a few feet in front of Boehner, will provide an excellent venue for embracing this idea and forging a bipartisan consensus in favor.
Obama also can discuss the steps he has taken to solve an ongoing trade dispute with Mexico. For years, the United States has blocked Mexican long-haul truckers from driving on U.S. highways. In doing so, it has failed to meet a condition of NAFTA. American farmers and ranchers have paid a painful price in retaliatory tariffs on everything from strawberries to Christmas trees. Since August, pork producers have seen their sales to Mexico fall by 11 percent. As a long-time pork producer myself, this simply cannot go on.
Thankfully, the Obama administration may be on the verge of correcting this blunder with a new approach developed by Secretary of Transportation Ray LaHood. During next week’s speech, Obama should lay out the job-creating benefits of selling to Mexico as well as how resolving the dispute will reduce transportation costs and save American consumers hundreds of millions of dollars.
No matter what the president says, however, it’s actions rather than words that count. By this time next year, the president will need to show results.