By Phil Levy
In Tokyo, President Obama spoke out
in favor of trade. It was not exactly the much-heralded Trade Speech, in which
he would lay out a detailed agenda and soothe U.S. public fears that he himself
had helped to arouse. Instead, this talk was addressed to an Asian
audience, but it offered some tantalizing new details and a near embrace of
some free trade agreements. The President said:
Continued integration of the
economies of this region will benefit workers, consumers, and businesses in all
of our nations. Together, with our South Korean friends, we will work through
the issues necessary to move forward on a trade agreement with them. The United
States will also be engaging with the Trans Pacific partnership countries with
the goal of shaping a regional agreement that will have broad-based membership
and the high standards worthy of a 21st century trade agreement.
Rather than drawing inspiration
from the president’s oratory, as U.S. and European audiences often had, Asian
leaders greeted the president’s trade stance with skepticism. As the Financial Times reported:
Lee Kuan Yew, Singapore’s first prime minister and a regional
elder statesman, said the US risked economic exclusion from Asia unless it
reversed its protectionist stance. …Najib Razak, Malaysia’s prime
minister, … told the Asia Pacific Economic Cooperation summit in Singapore that
progress on trade liberalisation was "imperative" for global
recovery. "The thing I liked about President Bush’s foreign policy is that
he was very pro-free trade. I hope the same message will be repeated."
- some evidence that the Bush
administration did not entirely
neglect Asia for eight years.
One might have expected Obama’s
vague statements in favor of the Doha trade talks, moving forward with South
Korea, and engaging with the mysterious Trans Pacific Partnership to have at
least created a warm glow about U.S. sentiments. After all, similarly vague
statements about avoiding protectionism and supporting the WTO garnered kudos
at G-20 summits in London and Pittsburgh earlier this year.
Whether the
APEC leaders were more discriminating than other audiences, cared more about
trade, were more astute in their reading of American trade politics, or had
just learned from past experience, they seemed unsatisfied. Perhaps with recent disputes fresh
in their minds, they seemed to ask, "where’s the beef?" And they were right to
worry.
The global
trading system has not been lacking in kindly thoughts and well wishes. It’s
been lacking in strong leadership and specific proposals. Fingers have been
pointing at the Obama administration. The Doha global trade talks that were
declared essential in the G-20 sessions have been foundering. Last month, the
European Union and Brazil criticized
the United States for failing to put forward specific demands. This month, WTO
Director General Pascal Lamy commented
that "the U.S. is proving to be slow in reaching a clear and articulated
negotiating position." If it were translated from the excessively cordial
language of international diplomacy, that remark would likely be unprintable in
a family publication.
Ostensibly,
the Korean FTA is unacceptable to President Obama and Congressional Democrats
because the Koreans have had the audacity to intervene in their auto market.
Korea, as a major trading nation, has not been as pliable as other U.S. FTA
partners and has made clear in the past that they are not
interested in renegotiating the agreement with the United States. Instead,
Korea has just concluded a similar
agreement with the European Union that will put American exporters at a
disadvantage in the Korean market.
The novelty in
the president’s announcement concerned the Trans Pacific Partnership (TPP)
and was sufficiently obscure to leave many people scratching their heads. In
fact, the United States had already
joined TPP talks with Brunei, Chile, New Zealand, and Singapore late in
2008 under President Bush’s direction. Obama’s announcement in Tokyo seemed
to indicate a lifting of his
administration’s suspension decision from earlier this year: small wonder that
it received a tepid response. Even had the President wholeheartedly embraced a
TPP deal, that would not have meant much on its own, since the United States
already has FTAs with Chile and Singapore. Brunei’s
entire annual GDP is roughly $20 billion, which is less than the U.S.
government has poured
into Citigroup.
The reason to
care about the TPP was its potential to serve as a platform for serious
integration throughout Asia. For a region that places a high value on trade,
the Asia-Pacific has had a great
deal of difficulty finding the right path toward liberalization. APEC has
made trade pledges in the past, but the group has a very diverse membership and
likely cannot serve as the vehicle for a high-standards regional FTA. More
promising was the idea that if Australia and Japan were coaxed into joining a
sophisticated TPP, the resulting FTA might then have opened its doors to any
other Pacific nation willing to accept its terms. Unfortunately, the Obama
administration has given no indication that it’s willing to lead such an
ambitious undertaking
A prerequisite
for a serious U.S. trade policy would be new trade negotiating authority for
the president, which the Obama administration has not even requested from the
Congress. For any of these trade initiatives to advance would require
persistent and detailed effort of a sort we have yet to see. Obama
may be a Pacific
president, but he has not been a very specific president. Asian leaders last
week were asking for more than platitudes.
MANDEL NGAN/AFP/Getty Images
