A New White House Free Trade Policy: The Shame Game?

Regular Spend Matters readers know all too well that we are rabid advocates of global free trade. While some in the Obama Administration appear to understand the crucial role that free trade must play in a world-wide economic recovery, our President and his fearless trade leaders are also hog tied by fear of political protectionist backlash. Consider this WSJ interview with U.S. Trade Representative Ron Kirk published in today's Journal as proof.

According to the article, in a new twist, "The U.S. effort would rely largely on trying to embarrass countries into changing policies, rather than directly threatening tariffs or other commercial penalties ... Mr. Kirk said the initiative would translate into jobs, as U.S. partners were forced to follow through on commitments to open markets." The Journal also reports that "the U.S. would target health-based import restrictions that Washington considers bogus -- such as bans of American pork products by Russia, China and other nations in reaction to the outbreak of H1N1 influenza." Interesting, but where's the meat? "By 'naming and shaming' countries, the U.S. tries to build pressure for change." The only substantive impact cited in the article claims that "many developing countries fear that being placed on watch lists can limit foreign investment."

Does anyone honestly believe that the U.S. is in a position to "shame" past, current and future trading partners into some form of equitable compliance? This new campaign amounts to domestic spin that the Journal describes as follows: "To win over a public skeptical about trade, [Obama] is now following a course plotted by earlier Republican and Democratic administrations: appear to get tough with trade partners and show that trade deals can boost exports and jobs, then use that credibility to push for new trade deals."

If President Obama is sincere in his expressed advocacy for free trade as evidenced in his campaign for the office -- and I suspect he is, at least philosophically -- then perhaps it's time to stop pandering for public support and to begin to layout the pragmatic and historical rationale for trade. After all, the only way we can get the job done is by teaching our "partners" about the benefits of open trade policy, using non-punitive (and non-shaming) actions. If we fail, protectionism will continue to take further hold across the globe, hurting us and everyone else (except the interests of the protected few such as raw material producers and trade unions) in the process.

William Busch

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