- Don Bonker
WASHINGTON, D.C. — In his State of the Union address, President Obama pledged his support of free-trade agreements and to double American exports over the next five years.
Unfortunately, it amounts to more rhetoric, for he cannot deliver on either pledge.
As in the Bush years, all trade agreements are dead-on-arrival in the Congress. Obama must know that, as his fellow Democrats greeted his endorsement of trade agreements with incredulity.
The president is not about to press the issue in an election year, when his party’s prospects are so dependent on the support of labor unions, who view Democrats voting in favor of trade pacts as just short of treasonous.
The president’s promise to double export growth over the next five years is illusory at best. In a fiercely competitive global economy, it is going to take a lot more than a few minuscule trade agreements and creating an export promotion cabinet.
America’s staggering trade deficits underscore years of profligate consumer spending that benefited China and other exporting nations — usurping U. S. companies that once enjoyed pre-eminence in international markets.
Until now, the Administration had no trade policy nor showed any leadership on the issue, but what the president presented is little more than patchwork over an anemic segment of our economy.
What is needed is a smart grid strategy and bold leadership in mobilizing a trade offensive, but there is little evidence that either exists despite the president’s call for a new national export initiative.
On policy, what the president offered differs little from the Bush years — enforcing trade agreements, reforming export controls, helping farmers and small businesses export more, shaping the agenda at the World Trade Organization (WTO) and pressing forward on the stalled free-trade agreements.
To his credit, Obama placed the emphasis on exporting more rather than the path of protectionism.
What is lacking is leadership within his Administration. On trade negotiations, his choice as U. S. trade representative, Ron Kirk, is without any experience in international trade and yet he is expected to assert leadership internationally.
The President’s third pick to head the Department of Commerce, Gary Locke, is a competent manager who must preside over an array of federal programs, including the Census Bureau, but has little time and lacks the political will to champion export promotion.
If the president is to achieve his lofty goal of doubling exports in five years, it will require bold leadership not unlike what Malcolm Baldrige displayed during the Reagan years.
Renowned for his rodeo feats, the Secretary Baldrige, upset over the trade deficit and slumping exports, took the “bull by the horns” to make America more competitive globally.
He got President Reagan’s backing to create a Department of International Trade & Industry that would merge the Commerce Department and Office of Trade Representative, but the idea proved unpopular with Congress and the powerful agriculture lobby. Mr. Baldride’s mission was cut short by his untimely death when he was competing in a rodeo team roping event.
As chairman of the House Subcommittee on International Economic Policy and Trade, I co-sponsored the bipartisan Baldrige legislation and added a provision that would give the Commerce secretary authority over the three government agencies most important to exporters — the Export-Import Bank, the Overseas Private Investment Corporation (OPIC) and the Trade and Development Administration (TDA).
These agencies are critical because they provide the financial assistance so essential to entering and competing in foreign markets, yet they operate as independent agencies with distinct, if not outdated, mandates that existed long before we were in a competitive global economy.
President Obama’s proposed National Export Initiative should spur an overhaul of the Commerce department’s trade functions similar to the Department of Agriculture’s Foreign Agricultural Service (FAS), which is superior in every respect when it comes to helping U. S. companies compete abroad.
Promoting exports is the right course compared to the Bush Administration’s preoccupation with free-trade agreements that were controversial and did very little to address the country’s trade deficit or improve its competitive position.
Why dither over trade pacts with small countries while ignoring America’s leadership at the WTO. Is it not better to have an agreement that applies to 153 countries than with one country the size of Colombia?
Unless the U. S. asserts more leadership at WTO, that organization will cease to be a viable force to leveling the playing field in international trade. Is it not better that America provides that leadership than China or India?
After one year in office, President Obama finally has revealed something of the Administration’s new trade policy. Now the question is will Congress give him the tools to make it happen?
Rep. Don Bonker served as a moderate Democrat in the House of Representatives from 1975 to 1989. As a senior member of the House Foreign Affairs Committee and Chairman of the Subcommittee on International Economic Policy and Trade, he became one of the leading trade legislators on Capitol Hill. During his tenure in Congress, Bonker authored and was a principal sponsor of significant trade legislation, such as the Export Trading Company Act and the Export Administration Act. He current is the President and CEO of the International Management and Development Institute, on the board of the Foundation for U.S.-Russia Business Cooperation, and is Executive Vice President of APCO Worldwide, a global communications firm based in Washington, DC
