Earlier today, USTR Ron Kirk suggested that multiparty
regional trade agreements might be an emphasis of the Obama Administration’s
second term. Kirk emphasized that the President “has more of a bias toward multilateralism
than anything else.” Some have reacted to
this announcement as suggesting a shift in policy – from a bilateral to a more
multilateral approach toward trade agreements. I’m not so sure.
Yes, in Obama’s first term significant bilateral
treaties were signed with South Korea, Colombia and Panama. But, the negotiation of these agreements
began in earnest 5 years earlier under the Bush Administration. That they were implemented in 2011, after
some additional trade-related policy concessions were made to the President and
Congressional Democrats, does not necessarily indicate that these agreements reflected
the Administration’s ideal approach to trade policy.
Kirk’s announcement might also be significant
in that it signals an emphasis on trade policymaking more generally. Many criticized the Administration for a lack
of attention to trade policy in the early years of Obama’s first term.*/** Whether the critiques are justified is an open
question. On the one hand, there was the
high-profile application of new tariffs to select tire products; there was also
a domestic content component to the stimulus bill, etc. But, let’s say trade policy was generally
on the back-burner early on. After all,
Ron Kirk himself essentially admitted as much.*** Would this really be that surprising? In the wake of the financial crisis and severe
recession, would we expect the Administration to be especially aggressive in
pursuing trade agreements of any sort? In
addition to the obvious preoccupation with stimulus legislation, there is also a
long line of political economy literature finding that constituency preferences
for trade liberalization are reduced in economic downturns (this applies to
both interest group and individual-level preferences).
With respect to individual-level preferences,
I recently came across a Pew Research Center survey which found that public
support for free trade waned at the onset of the global crisis. In the seven years leading up to the
financial crisis, about 44 percent of U.S. respondents were of the belief that
free trade agreements like NAFTA and the policies of the World Trade
Organization were good for the U.S. economy.
In April 2008, opposition to free trade grew, and only 35 percent of
respondents answered that free trade agreements had a favorable impact on the
economy. While the figure subsequently
rebounded to previous levels, the recession appears to have had a negative
(albeit temporary) impact on views regarding free trade.
If the USTR’s recent announcement does
indicate that there will be a renewed focus on trade policymaking, maybe this shouldn’t
surprise us at all.
*Reuters.
2011. “Fifty economists have written to ask U.S. President Barack Obama
to ‘step up to the plate’ on World Trade and champion a last gasp deal on the
moribund Doha round of world trade talks.”
Sept. 21, 2011.
**Sistema Económico Latinoamericano y del Caribe
(SELA). 2010. U.S. Trade Policy under the Obama Administration: Implications for SELA Member
States. March 2010.
***http://www.dallasnews.com/business/columnists/jim-landers/20121210-former-dallas-mayor-ron-kirk-from-listening-to-action-on-trade-pacts.ece
