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Moving on Trade

Negotiating the Trans-Pacific Partnership: Are We Getting Serious?
17 December 2009

by Daniel Michaeli

U.S. Trade Representative Ron Kirk announced this week that the United States will negotiate to join the Trans-Pacific Partnership (TPP), which currently includes New Zealand, Chile, Brunei, and Singapore. As more countries join–Australia, Peru, and Vietnam will negotiate to join with us–this could be the start of a more robust U.S. trade agenda in Asia. Kirk even said Japan, Malaysia, and South Korea should join an agreement, too.

But is the United States really ready for an agreement like this? And is the Obama administration really serious about moving forward on trade?

If South Korea and Japan join the TPP negotiations, that could tank the entire process. The administration won’t even move on the bilateral free trade agreement that has already been negotiated and signed with South Korea, due to domestic opposition from the auto lobby. And trying to negotiate a free trade agreement with Japan–the world’s second-largest economy with whom we have a legacy of contentious trade disagreements–would raise even more political opposition in the U.S. than the South Korean agreement. No one has ever seriously suggested the political environment in America would allow this administration to pursue negotiations like this with Japan.

So why did Kirk say “we would love” to have South Korea, Japan, and Malaysia participate in the TPP negotiations? Is he naive, trying to sink the TPP, or so brilliant that he thinks he can get Congress to agree to a free trade agreement that includes South Korea and Japan when it seems like a regional, not bilateral, effort? I’m inclined to think it’s naivety, and I don’t expect South Korea and Japan will join. But time will tell.

On a positive note, negotiating with Australia and Peru will be a cinch. They are our partners on two of the 11 free trade agreements the United States has already ratified. Still, negotiating with Vietnam will raise a host of labor, human rights, and trade issues that will require Obama to push back against his most important base of political support, even after gaining reasonable concessions from the Vietnamese. And it is not only labor unions that are suspicious of trade agreements; more generally, there is a broad group of Americans who believe the current trade environment is unfair or, falsely, that this country isn’t competitive enough to benefit from global trade.

This announcement is the first real sign of life in the administration’s trade policy, which came much to the relief of many of us Asia folks on both sides of the aisle (and in the middle). But the fact that to this date the Obama administration has not taken any action on the Korea-U.S. Free Trade Agreement (KORUS), the Colombia FTA, or the Panama FTA (all of which were signed under the previous administration) is a sign of Obama’s priorities: the economy, health care, and (probably) climate will trump all other initiatives.

Reports from Obama’s trip to Asia last month suggest that the Obama-Lee meetings in Seoul convinced the president that trade is crucial to the American presence in the region. Let’s hope so.

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2 Comments »

  • Free Trade = American Jobs – Daniel Michaeli: Asia Ruminations said:

    […] trade is arguably the area this administration has ignored most since taking office, though joining negotiations on the Trans-Pacific Partnership last month was a good first step. In the speech, however, Obama identified growing exports as one […]

  • Obama Skips Asia (Again) – Daniel Michaeli: Asia Ruminations said:

    […] And just as President Obama has yet to explain to Americans why strategic engagement in the new nexus of global economic activity is crucial, he hasn’t demonstrated the political leadership to explain to Americans why trade engagement is crucial to future U.S. economic competitiveness (I’ve written about this before, for example, here and here). […]

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