If it weren't for Ron Kirk's sometimes unwillingness to cloak the blunt-spoken, big personality traits of the big-city mayor he once was, as well as his Texas twang, I might have been listening to Carla Hills, the first president Bush's trade rep, and all who followed her.
U.S. trade representative Ron Kirk quoted Yogi Berra to describe the challenges and opportunities facing America in a changing world. “The future ain’t what it used to be.”
As Kirk talked to The Seattle Times editorial board last week, I thought of Berra, too: “This is like déjà vu all over again.”
For all of candidate Barack Obama’s criticism of NAFTA and certain other trade deals during the campaign, President Obama is pursuing a policy of remarkable continuity with other administrations.
If it weren’t for Kirk’s sometimes unwillingness to cloak the blunt-spoken, big personality traits of the big-city mayor he once was, as well as his Texas twang, I might have been listening to Carla Hills, the first president Bush’s trade rep, and all who followed her. Unbidden, Kirk praised the help he had received from his immediate predecessor, Susan Schwab.
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Now the North American Free Trade Agreement continues as before. The Obama administration is pushing for trade agreements with Columbia, South Korea and Panama. It wants progress on the stalled Doha Round of world talks. As with his predecessors, Kirk delicately sidesteps U.S. agricultural subsidies, a political third rail in farm states. He says the right things about labor and environmental standards. And the president has set a goal of doubling American exports in five years, adding 2 million new jobs.
Since 1945, the United States has worked to lower trade barriers and implement rules followed by all trading nations. The ideal was to avoid the protectionism that worsened the Great Depression and, many argued, helped fuel the rise of fascism and militarism leading to World War II. Like it or not, today’s world-trading system is an American creation.
Increasing numbers of Americans don’t like it, which is why Kirk, the former mayor of Dallas, considers a visit to Seattle a treat. This is a city and region built on trade, open to the world. Kirk met here last week with economic ministers from Southeast Asian nations. He also participated in a round-table including Gov. Chris Gregoire, Rep. Dave Reichert and Rep. Adam Smith.
Even though Washington is trade-friendly, Kirk heard numerous concerns.
For example, Port of Seattle Commission President Bill Bryant emphasized how a successful export strategy requires competitive ports and transportation networks. U.S. West Coast ports face competition from those in Canada benefiting from highly coordinated federal efforts. The result: They’re gaining market share at our expense. Kirk was urged to work with the ports to help level the playing field.
Other issues concern trade barriers and intellectual property.
The export-control regime puts many American high-tech products at a competitive disadvantage globally; some U.S. import tariffs may protect a handful of producers but they drive up the cost of assembling the final products here that depend on those foreign components, and the Harbor Maintenance Tax, inadvertently provides incentives for importers to use Canadian ports.
And this was from a friendly crowd.
Kirk said the good news is that exports are reviving faster than the general economy, and the Great Recession didn’t cause the raw protectionism that grew out of the Great Depression. Still, stealth protectionism abounds, such as “indigenous innovation” policies. China is using these to lock American companies out of deals there.
When asked about how to deal with China and the imbalances in the Chinese-American trade relationship, Kirk responded, “Carefully. It’s a relationship too big to be left unattended.” He insisted that America and China can work out their differences through the World Trade Organization and negotiation. “It doesn’t have to be lose-lose.”
“We’re going to ask and insist that our trading partners play by the rules.”
He also pushed the idea that despite barriers in China and India’s slowness to open its markets, opportunities abound for U.S. products in such places as Southeast Asia, South America and Africa. “There couldn’t be a better time for U.S. exports. It won’t always be easy. But we’ve got 3 billion new customers.” If American companies don’t take advantage, others will.
Maybe so. But the world has changed since trade reps such as Hills could convince most Americans that they were net winners from trade. While we still benefit from a global marketplace of inexpensive goods, competition, offshoring of jobs and surplus, inexpensive overseas labor has shocked large portions of the U.S. economy.
What some would consider protectionism doesn’t sound bad to millions of unemployed and underemployed workers in parts of the Midwest and Southeast.
The president, Kirk said, “rejects false choices” between raising trade barriers and free trade that hurts U.S. workers. “We have to thread the needle and revalidate the job-creating value of trade.”
It is, indeed, complicated. For all its pain, Michigan still ranks No. 9 among the states in the value of its exports; Ohio ranks seventh. Both trail Washington at No. 4, ranked behind New York, California and Texas.
For now, Kirk said, he’s trying to listen in the hard-hit areas and help them become more export-oriented. Which brings us back to Seattle and Washington state.
“There are important lessons here that can apply to all regions, including those that are skeptical of trade and not as forward-leaning as you are.”
You may reach Jon Talton at email@example.com