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A Year After Implementation of Peru Free Trade Agreement, U.S. and Peru Left with Broken Promises, No New Trade Model

Obama's Path Forward, or Bush's NAFTA for 'Nam?

Last night, President Obama's State of the Union speech touched on trade matters. Specifically, he said:

We need to export more of our goods. Because the more products we make and sell to other countries, the more jobs we support right here in America. So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America. To help meet this goal, we’re launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security.

We have to seek new markets aggressively, just as our competitors are. If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores. But realizing those benefits also means enforcing those agreements so our trading partners play by the rules. And that’s why we will continue to shape a Doha trade agreement that opens global markets, and why we will strengthen our trade relations in Asia and with key partners like South Korea, Panama, and Colombia.

According to Reuters:

Daniel Price, a lawyer at Sidley Austin and former White House adviser to George W. Bush, said many would be "puzzled" by Obama's failure to explicitly urge approval of the deals and instead only call for stronger trade ties.

Indeed, corporations have been pushing hard to get Obama to explicitly call in SOTU for completion of the WTO Doha Round in the sorry state in which it exists today, and to pass Bush-negotiated FTAs with Panama, Colombia and Korea, and to adopt Bush-initiated financial service deregulation talks with Asia.

Obviously, they lost on that count. Still, it was surprising that Obama didn't reference his fair trade campaign commitments - especially given the appeal of that issue across the aisle, as shown in recent polls. But Obama's careful phrasing leaves open the possibility that, rather than adopting Bush's trade policies as his own, and pass NAFTA for 'Nam, Obama can push for a different kind of trade model, and try out this new model with our trading partners in Asia and Latin America.

The politics and policy of the latter are what makes the most sense. We lay out some of the way Obama could carve this path forward in our comments on the proposed Asia trade deal (Trans-Pacific Partnership):

The TPP negotiations would be the first entered into by the new administration. For that reason, they provide the opportunity for the administration to translate into action President Obama’s campaign commitments to reform the past U.S. trade agreement model so that pacts can deliver benefits to more people, and so that the various problems he identified with the past model’s foreign investor, procurement, import safety, service-sector, procurement and other provisions are remedied. Indeed, TPP negotiations could be used to correct these problems with respect to past Clinton and Bush administration-negotiated U.S. “Free Trade Agreements” (FTAs) with Australia, Chile, Peru and Singapore.


There were some great comments also posted from Rep. Mike Michaud (D-Maine) and our friends in the National Farmers Union, AFL-CIO, Friends of the Earth, Citizens Trade Campaign, Oregon Fair Trade Campaign and the Teamsters.

Finally, Obama's export promise is a step in the right direction, given our overwhelming trade deficit, and a decline in exports of 19 percent last year. However, by our calculations, a doubling of exports would imply a 15 percent annual export growth rate, sustained over the next five years. That's almost double the annual average from 2004-08. Moreover, if imports grow at their 2004-08, we would still be left with a trade deficit by 2014. That means that we need a trade policy (I dunno... like the TRADE Act) that commits to looking at both sides of our trade balance ledger.

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way2goodcredit

As a Newbie, I am constantly searching on the internet for articles that can guide me. Thank you

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