Tags

, , , , , , , , , , , , , ,

In his weekly radio address this past Saturday, President Obama finally made his first pitch to the general public since his State of the Union for his planned new trade deals and for new fast track authority to pursue them. Ironically, though, his remarks further weaken the case for Congress granting him sweeping powers to conduct the nation’s trade policy.

As in the State of the Union, Mr. Obama clearly hoped to burnish his trade policy credentials by acknowledging that “past trade deals haven’t always lived up to the hype.” But his insistence that “we’ve successfully gone after countries that break the rules at our workers’ expense” is simply inexcusable hype about the possibilities of the nation’s trade system, and about the World Trade Organization’s potential as an effective trade referee. And the claim that his trade diplomacy would “level the playing field for American workers” by holding “all countries to the same high labor and environmental standards to which we hold ourselves” betrays an alarming ignorance about the prospects of enforcing the most distinctive terms of his proposed agreements.

As I’ve previously documented, the Obama administration’s trade enforcement moves are pathetically dwarfed by the scale of foreign subsidies at which they’re aimed – not to mention other trade-distorting policies, like discriminatory value-added taxes, that are beyond the reach of world trade law and are ignored in the president’s trade initiatives. Trade law actions, however, can also be dismissed as meaningful correctives for poorly negotiated agreements because of their intrinsic limitations.

Like all legalistic measures, they are inevitably reactive and piecemeal. As a result, they are utterly incapable of effectively addressing the challenge of foreign economies that are nothing less than national systems of protection – and especially those run by bureaucracies whose secretiveness makes it painfully difficult even to identify trade transgression conclusively, much less combat them.

Just as fanciful is the idea that provisions in trade deals can produce higher labor and environmental standards abroad. Believers in this contention, for example, still need to explain how many U.S. government bureaucrats will be needed to monitor the industrial complexes of current Trans-Pacific Partnership (TPP) countries like Mexico and Vietnam and Malaysia, much less of likely future signatories like China.

Even sillier is the notion that significant disciplines will be imposed on state-owned enterprises, as the administration is seeking for the TPP. After all, in Asia in particular, the line between public and private sector is typically blurred at very best. And the pervasiveness of deeply mixed economies in the region ensures that any cases against these entities brought by Washington before the TPP’s dispute resolution system will be quickly swatted down – whatever the agreement’s text says.

In fact, this dispute-resolution problem ensures that none of the specifics in the president’s trade agreements has a prayer of defending or promoting America’s interests. For legal systems require broad and deep consensus on acceptable behavior to be effective. They codify realities rather than creating them. Until the president recognizes the fundamental differences on economic policy norms that continue to divide the United States from most of it main trade rivals in Asia and other regions, and their implications for America’s international economic strategy, he needs a leash from Congress on trade policy, not a blank check.

Advertisements