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Obama Trade Policy Turns Toward the Center

President Barack Obama seems to be adopting a pro-trade agenda.

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WASHINGTON — President Obama has tempered his tone on trade.

After a campaign during which he adopted a tough stance on some key issues — including China’s currency and the North American Free Trade Agreement — Obama now seems to be adopting a pro-trade agenda many believe will lead to expanded global commerce.

Caught in the maelstrom of a worldwide economic downturn and embarking on a new diplomatic approach to mend the image of the U.S. with foreign leaders, Obama appears to be moving toward the center, as most presidents have done throughout history. Many trade veterans said the Obama administration so far has carefully walked a line that is neither overtly pro trade nor protectionist.

As an illustration of his evolving trade policy, Obama said in a proclamation last week that he plans to negotiate “future trade agreements to create opportunities for all Americans,” which counters some of the speculation from industry groups the new president would not embark on new trade deals based on his previous tough positions.

The president also said he is “developing a plan of action” for three pending free trade agreements with Panama, South Korea and Colombia that were negotiated by the Bush administration, and reiterated his support for advancing the Doha Round of global trade talks that has faltered for several years.

Trade experts said Obama will likely pursue a more liberal trade agenda as part of a broader foreign policy strategy.

“When you are president you appreciate more fully that trade is an important foreign policy tool of alliance building, as well as a projection of American values and American power,” said Charlene Barshefsky, who was U.S. Trade Representative in the Clinton administration from 1997 to 2001 and is now a partner at the Wilmer Hale law firm in Washington. “I do not for a minute believe that [Obama’s] overall economic policy will be protectionism.”

Historically, that is in line with the approach of most other presidents in modern times.

“All modern presidents, and now given the nuanced change, even Obama, have all been free traders — Democrats and Republicans alike,” said Marick Masters, professor of business and director of labor programs at Wayne State University in Detroit.

To that end, Obama has built a team with pro-trade leanings, said Mickey Kantor, who was USTR under Clinton from 1993 to 1996 and is now a partner at the Washington law firm Mayer Brown. New USTR Ron Kirk and Commerce Secretary Gary Locke were “open traders their entire political careers,” Masters said.

Obama also appointed others with a record of supporting open trade, he noted, including the director of the White House’s National Economic Council Larry Summers, Treasury Secretary Timothy Geithner and White House chief of staff Rahm Emanuel, who worked for Clinton during the negotiation of NAFTA.

“The administration is full of people with a full understanding of the benefits of trade,” Kantor said.

Nonetheless, Obama is walking a tightrope on trade and the success or failure of his agenda will depend largely on Democratic leaders in Congress, who control the House and Senate.

 

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