GAO Finds U.S. Market Share Dropping in Certain FTA Partners
Post-Crisis Cage Match at the WTO

Export Cabinet Report Ignores Job and Export Predictions of Bush Trade Deals

The Obama administration released its Report on the National Export Initiative last week, with 74 pages of plan on how to make the president's plan of doubling exports in five years a reality.

These agenda items range from the no-brainers (overseas trade missions) to the non-starters (passing Bush's NAFTA-style trade deals).

These trade deals pose a major political problem for Democrats in an election year, as Lori Wallach wrote in Huffington Post last week. But they also are unlikely to perform as promised by the president's Export Promotion Cabinet: as our recent report shows, exports to our FTA partners are growing less than half as fast as those to our non-FTA partners.

Moreover, key parts of the report give a fairly misleading interpretation of the likely job and export implications of Bush-era, leftover trade deals.

For instance, on pages 3-4, the report explores areas where "the Export Promotion Cabinet has made significant progress to implement" the president's goal. On example is:

Reinforced efforts to remove trade barriers... At the G-20 Summit in Toronto, President Obama announced that he had instructed Ambassador Kirk to begin discussions with his Korean counterpart to resolve outstanding issues with the United States - Korea Free Trade Agreement (FTA). The Korean FTA would increase goods exports by an estimated $10-11 billion, which would support an estimated 70,000 jobs. The gains from the agreement could significantly exceed this estimate when reductions in non-tariff barriers and increases in services exports are included.

However, as my colleague Travis McArthur blogged about last month, this claim conveniently omits the government's official projections that 60 percent of even this bilateral gain would be washed away by imports. Moreover, the USITC, the source for these numbers, found that the U.S. global trade deficit would actually increase under the Korea FTA.

On pages 6-7, on the priorities going forward, the Export Promotion Cabinet lists:

Concluding an ambitious, balanced, and successful WTO Doha Round that achieves meaningful new market access in agriculture, goods and services.
Concluding the Trans-Pacific Partnership (TPP) Agreement to expand access to key markets in the Asia-Pacific region.
As we wrote earlier this summer, even the pro-WTO Peterson Institute predicts that the current Doha Round proposals will increase the U.S. trade deficit. As for the TPP, the U.S. already has trade deals with four of the seven countries, which combined account for 86 percent of potential bloc's GDP.

Nonetheless, the advocacy for the Korea FTA, TPP and Doha Round continue throughout the Export Promotion Cabinet's report. (For instance, on pages 13-14, and 47-48).

Luckily, the Cabinet states at several points that they are looking for ways to improve Bush's extant proposals on Korea, Colombia, Panama and the TPP. For instance, on page 48, the Cabinet commits to "Resolve remaining issues with, and seek Congressional approval and implementation of, the pending FTAs with Korea, Panama, and Colombia." 

However, in a footnote linked from this sentence (on page 67), we see the following statement:

For Korea, USTR will develop a package of proposals to address outstanding concerns with the objective of leveling the playing field and improving our access to Korean automotive and beef markets. For Panama, USTR will work to address concerns with certain aspects of Panama’s labor regime and its tax transparency rules. For Colombia, USTR will work to improve the labor code and to enhance measures to address violence against labor union officials to ensure that union rights can be fully and freely exercised.

Is this meant to be the administration's official announcement of what they plan to fix? Because it's a lot more modest than what over a 100 members of Congress said was necessary to even begin the conversation on taking up Bush's trade deals.
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Comments

Evelyn Holt

The President's National Export Initiative is commendable in that we can grow our economy and create jobs by increasing trade and boosting our exports.

What is dangerous, however, is the "all-trade-is-good-trade" mentality that has taken over much of the talk around current and pending free trade agreements.

Public Citizen rightly points out that the numbers don't add up and people need to sit up and take notice: more free trade agreements mean slower export growth and an increasing trade deficit.

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