Published October 21, 2011
President Obama signed off Friday on the first three -- and possibly last -- free trade agreements of his administration, deals with South Korea, Colombia, and Panama that could be worth billions to American exporters and create tens of thousands of jobs.
The three deals were years in the making, and the difficulty of bringing them to fruition make it unlikely there will be another bilateral trade agreement during Obama's current term.
Obama signed them with none of the ceremonial fanfare that normally accompanies such triumphs. Republicans, while supportive of the deals, continue to find fault with Obama's trade policies. And nearly three-fourths of House Democrats voted against the trade measures.
The agreements will bring to 20 those countries that have free trade relations with the United States.
Trade won't go away as an issue, as the administration pushes ahead with a major Pacific rim trade pact, Congress and the White House scuffle over China, and Republicans take aim at Obama's policies during the presidential campaign.
But, "I don't see this administration coming up with new free trade agreements," said National Foreign Trade Council president Bill Reinsch. "For the next six months we ought to go after trade liberalization in manageable pieces."
Republicans accuse the administration of moving too slowly to find new free trade partners, resulting in U.S. exporters losing out to foreign rivals. The administration says it is promoting free trade, but wants to assure that the other side is playing by the rules, that basic worker and environmental rights are observed, and that deals promote U.S. job growth.
"From day one," U.S. Trade Representative Ron Kirk told The Associated Press, the guiding principle has been not just to complete the three trade agreements but "to develop a new paradigm for trade, and rebuild and restore America's confidence in our trading policy."
He added that the administration was on track of reaching Obama's goal, set early last year, of doubling U.S. exports over a five-year period.
Trade officials, in justifying their approach, point to the 83 Senate votes for the South Korean deal, which was renegotiated by Obama to expand access for U.S. vehicles in Korea. That was the highest total ever for a free trade vote.
The accord with South Korea, America's seventh-largest trading partner, is estimated to support 70,000 jobs, and the signing capped a singular moment of triumph for a president who over the past year has seen his jobs agenda blocked on every front by unified Republican opposition. This time Republicans were his eager partners, urging him to move even faster to complete the long-delayed trade deals and move on to new ones.
Obama also signed legislation extending a program, a Democratic favorite, to help workers hurt by foreign trade. Yet the quiet signing ceremony and a low-key reception in the Rose Garden for those who might benefit from the agreements reflected the unpopularity of free trade pacts among Obama's core labor supporters -- and the uncertainty of his future trade policy.
Supporters say the three deals are a winning proposition for American businessmen and farmers who now face high tariffs in those three countries, while those countries can ship goods to the United States with few or no duties. The deal with Korea could boost exports by $10 billion, erasing the current trade gap. Exports could go up another $1 billion a year to Colombia, one of the U.S.'s strongest allies in Latin America.
The three deals were initially signed in the George W. Bush administration but were slowed down as the Obama White House renegotiated changes and haggled with Republicans over the worker aid program. Democratic opposition was strongest against the Colombia deal because of that country's record of violence against labor leaders.
The U.S. Trade Representative Office is now shifting its attention to the Trans-Pacific Partnership, an economic alliance that would link the United States with Brunei, Malaysia, New Zealand, Vietnam and four countries that are already free trade partners -- Australia, Chile, Peru and Singapore. Going beyond cutting tariffs, the alliance would tackle such areas as financial services, intellectual property rights, government procurement, investment and conservation.
Kirk said negotiators had been "making really good progress" and they hoped to have the broad outline of an agreement when leaders meet in Honolulu next month for the annual Asia-Pacific Economic Cooperation forum.
"TPP is the one game in town and there is going to be a lot of focus on that," said John Murphy, vice president for international affairs at the U.S. Chamber of Commerce.
But in a world filled with acronyms, TPP would have a tough time getting congressional approval without TPA. Trade promotion authority, also known as fast track, gives the president the authority to negotiate trade deals that Congress can either accept or reject, but cannot amend. That authority expired in 2007 and Obama, tied to Democrats and labor groups who oppose further free trade agreements, has not pushed for its restoration.
Last month Senate Republicans tried to revive TPA, but the measure was defeated on a largely party-line vote. Democrats argued that the TPA law has to first be rewritten to reflect changes in such areas as digital services and the environment.
Kirk also emphasized the importance of getting other countries to abide by existing trade rules. "Enforcement has been paramount to the work we have done on market access," he said, adding that "if we could get China to a better place where they were really opening up their markets," it would be a major windfall to U.S. exporters.
Mitt Romney, currently viewed as the strongest contender for the GOP presidential nomination, said in a trade policy speech this month that he would work to reestablish TPA and promote more free trade agreements. He also singled out China, saying that as president he would take punitive actions if China continues to unfairly subsidize its domestic products and manipulate its currency.
The Obama administration was cool to legislation passed by the Senate last month that would make it easier to impose higher tariffs on China if it continues to keep its currency undervalued as a way to make its exports cheaper.
Lori Wallach, director of Public Citizen's Global Trade Watch, a group that has strongly opposed past trade agreements, said Obama may have to get tougher on China if he is to defend Ohio and other states where workers hit by foreign trade don't agree with his promotion of free trade.
She said Obama has already lost ground among Democrats, noting that a greater percentage of House Democrats, 71.4 percent, voted against Obama on the trade deals than on any other legislation since he took office.
Among other prickly subjects in the coming year, Russia is close to being accepted into the World Trade Organization, but U.S. businesses wouldn't benefit from lower Russian tariffs unless Congress repeals the Cold War Jackson-Vanik law that barred normal trade relations with the Soviet Union because of its policies on Jewish emigration. And the U.S. still has to make sure that South Korea, Colombia and Panama are ready to carry out their trade agreement commitments, a process that could take months.
But the Chamber's Murphy said they are for now putting aside their frustrations over trade. "This isn't the moment for that. This is a week for sunny optimism."