World Trade - September 2008 - (Page 8) POLICY PERSPECTIVES Obama or McCain: What’s the Difference for Trade? T BYBY ROBERT KYLE DANIEL GRISWOLD The new President will need to forge a trade is not clear. policy that, at present, he story is told that George Washington, attending the 1787 Constitutional Convention, spoke little until someone suggested that the Constitution set a limit of 5000 men in the army. Washington finally spoke up, “If that be so, let the Constitution also say that no foreign army should ever invade our country with more than 3000 troops.” Washington’s pragmatism reminds us that stated policies are inevitably tempered by the realities of governing. This will be true of Obama and McCain: the trade policies they have staked out as candidates will be shaped by the make-up of the Congress and the overall context in which the winner assumes the Presidency. To be sure, there are meaningful differences in the stated positions of each candidate. McCain is a staunch free trader, supporting NAFTA and the Bush Administration’s controversial Colombia and South Korea free trade agreements. Obama has supported some free trade agreements— and he has also spoken forcefully that the U.S. cannot hide from globalization but must adapt to change. But he has argued for a trade policy that gives more attention to labor and environmental concerns and does a better job of benefiting all citizens generally— leading him to call for renegotiations to fix NAFTA and for opposition to Bush’s Colombia and South Korean agreements. Despite these differences, other forces will act to constrain the new President, regardless who wins. Either is highly likely to face a Congress with strong Democratic majorities, making early passage of significant bilateral free trade agreements difficult. Other priorities may also intrude (e.g. the economy, global warming, healthcare) to crowd out a sustained, early focus on trade agreements. There are certain trade initiatives either candidate probably would undertake as President, notably greater bipartisan consensus on trade policy, a consensus badly frayed over the last eight years. That may begin with an enhanced emphasis on enforcement of existing trade agreements, a step seen as needed and overdue. Beyond that, the new President will need to forge a trade policy that at this point is not clear. One large initiative likely to be left on his door- step is the Doha Round, the multilateral trade negotiations being held under the auspices of the World Trade Organization. Both Obama and McCain have endorsed the process of negotiation, but the recent collapse of the talks in Geneva makes agreement before Bush leaves office highly doubtful. The next President must decide whether or not to actively restart that effort. That would not be easy, as the talks have been deadlocked over an unwillingness by countries to offer sufficient trade reform. It is unclear whether the mere presence of a new American President can change that. But drift in the multilateral negotiating process may free countries to go their own way and—particularly in the context of a potential worldwide economic slowdown—unleash creeping trade restrictions that close markets to U.S. exports. A new President may see continued negotiations as a bulwark against this trend, and as part of a broader effort to re-establish American leadership internationally. The new President will face even greater challenges regarding bilateral free trade agreements. For over twenty years, Democrats have insisted these agreements incorporate American values in the form of greater protections for labor and the environment, while Republicans have been more willing to let the agreements stand on their own economic and foreign policy merits. McCain would need to respond to strengthened Democratic Congressional majorities on this point. Obama favors the Democratic view, but would also need Republican votes for any trade agreement. There is also a sense that other international economic issues are assuming center stage for American policymakers—the value of the dollar, the centrality of the U.S. as a global financial center and high commodity prices, to name a few. These issues may command the new President’s attention, either because of their inherent significance or because unseen events drive them even more to the forefront. If history is any guide, the new President will not entirely control those issues he addresses. As George Washington counseled, leaders often must respond to the reality they are given, not the reality they wish. WT Robert Kyle, a partner with the law firm of Hogan & Hartson, was President Clinton’s Special Assistant for International Trade and Finance at the White House and served as Chief Trade Counsel to the U.S. Senate Committee on Finance. 8 WORLD TRADE SEPTEMBER 2008
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