What to Expect from US Trade Agenda

excerpt from International Finance & Treasury
published by WorldTrade Executive, Inc.

By Steven J. Mulder (Greenberg Traurig)

Among the many outcomes from November’s historic elections was the election of several new Members of Congress who ran on a so-called “fair trade” platform that critics argue amounts to little more than protectionist stances on economic and trade policies. Those candidates that successfully ran on the fair trade platform argued that the trade policies of the Bush Administration have failed to provide meaningful benefits for average working Americans. Whatever version one may believe, it is clear that the pro-free trade voices in Congress have been diminished as a result of the elections.

Given that, we are likely to see a period of inactivity on the trade front in the 111th Congress, at least for the pending free trade agreements concluded by the Bush Administration with Colombia, Panama and Korea. The real question is how will the incoming Obama Administration address trade issues and can it work with Congressional critics of trade to create a “new path” for U.S. trade policy going forward?

There are any number of creative ideas floating around Washington on how the new President and 111th Congress may fashion a new consensus on trade policy. Some of the leading ones are creation of new fast track trade negotiating authority that allows much greater congressional input; doing away altogether with comprehensive, country-specific free trade agreements and instead limit them to defined “sectorals” -- for example, a “services” agreement with Japan that would include financial, legal and insurance services trade, but avoid the highly controversial matter of opening Japan’s agricultural economy to U.S. producers. Others argue that free trade agreements should include the highest standards for labor and environmental protections. (It should be noted that the pending free trade agreements contain such protections, yet they still face bleak prospects in Congress).

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