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Working In These Times

Wednesday, Mar 17, 2010, 3:33 pm

Will Obama Pursue Promised New Approach to Trade, or Continue Bush Model?

BY David Moberg

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Chile's Foreign Minister Ignacio Walker, New Zealand's Trade Minister Jim Sutton, Singapore's Trade and Industry Minister Lim Hng Kiang and Brunei Princess Hajah Masna join hands in South Korean on June 2, 2005, six months before a trans-Pacific free-trade agreement between their four countries came into force.   (Photo by KIM JAE-HWAN/AFP/Getty Images)

As President Obama prepares for his trip to Asia next week, his administration’s trade negotiators are busy in Australia this week in the first round of talks about a new Trans-Pacific Partnership Trade Agreement (TPA). 

Although the idea originated in the Bush administration, labor officials and other progressive critics of past trade deals see the TPA talks as a test of whether Obama will develop a new model for such agreements, as he promised on the campaign trail.

“This is a great opportunity for the administration to show how they’re going to reform trade policy or whether they’ll continue with the past policies,” says AFL-CIO deputy chief of staff Thea Lee, a longtime trade policy expert. “It’s not clear at this point what they will do. But there’s a high level of anxiety.” Public Citizen’s Global Trade Watch Director Lori Wallach struck the same note: “As a candidate Obama committed to specific trade policy reforms. This is where the rubber hits the road. We’ll se if we get a new model of trade as Obama promised or revert back to the Bush model following NAFTA.”

Fair trade advocates have reasons to worry. Obama already has backed off promises to re-negotiate parts of NAFTA and has urged Congress to approve Bush-negotiated trade agreements with South Korea, Panama and Colombia, an egregious violator of worker rights. And when Rep. Michael Michaud (D-ME), chair of the House Trade Working Group, asked U.S. trade representative Ron Kirk (a longtime supporter of NAFTA and similar trade deals) a series of questions about how TPP would protect worker rights and good jobs, “We did not get any clear answers or commitments from him on any of these,” he said.

TPP talks involve four countries with which the U.S. already has bilateral trade agreements–Chile, Peru, Australia and Singapore, as well as New Zealand, Brunei and Vietnam. They grew out of a four-way trade deal–“the Pacific Four,” including Singapore, Chile, Brunei and New Zealand.

Many analysts see the TPP talks as a way for the U.S. to be included in and heavily influence any broad new Asian trade agreement, implicitly challenging intra-Asian agreements such as the recent China-ASEAN (southeast Asian) trade deal that might be dominated by China and Japan. From that perspective, TPP is just a preliminary to the U.S. trying to open talks involving all of the 21 nations in the Asian-Pacific Economic Cooperation. “The idea of the Obama administration is to use this [TPP] as the framework for an APEC-wide trade agreement,” says AFL-CIO global economic policy analyst Jeff Vogt.

In its own right, TPP would only slightly expand the economic openings for the U.S., since its free-trade agreements cover already 86 percent of the TPP’s gross domestic product.

The Obama administration’s decision about whether to confront China over its manipulation of its currency to keep it undervalued carries far greater influence on global trade and prospects for growth of the U.S. economy and jobs.  Rebalancing China’s currency policy will do far more than any trade deal to advance Obama’s recent pledge to double exports in the next five years.

But TPP talks will give a clue about how seriously Obama will follow the model laid out in the TRADE (Trade Reform, Accountability, Development, and Employment) Act that Michaud and others have sponsored and that groups like Global Trade Watch and Citizens Trade Campaign take as their model.  TRADE would mandate periodic review by the Comptroller and Congress of all trade agreements, prohibit expedited approval of trade agreements unless they included a long list of labor, environmental, public health, and other standards, and require renegotiation of past agreements to meet those standards. 

Fair trade groups also want to limit the rights given to corporations in earlier treaties, such as investor rights to sue governments over any interference in their profiteering, private corporation rights to compete for public services, and restrictions on government selectivity in procurement contracts. They want TPP and other trade deals only to involve democratic governments, which immediately poses a problem about including Brunei and Vietnam.

Polling suggests the public supports most of the fair trade agenda, and from a political point of view, Obama and the Democrats would certainly gain by putting good jobs and worker rights at the center of their trade agenda, not corporate protection and “free trade.” Also, while Republicans in Congress might support the old model of trade deals, Wallach argues that politically Obama can’t promote a trade agreement that has only minority Democratic support, especially in the House.

The big questions TPP talks raise are not so much economic as political and policy-oriented. The political people around Obama see the need for a new approach to trade, Wallach says, but the president’s economic and trade advisors are still old-school, NAFTA supporters of a politically and economically losing strategy.  So the big question—probably not to be answered after even this week’s talks—is, as Wallach asks, “Will this be the first Obama agreement or just a continuation of the Bush model?”

David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy. He can be reached at davidmoberg@inthesetimes.com.

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