Obama’s Absent Commercial Agenda

President Obama is neither a defender of free trade nor a protectionist, but his reluctance to commit himself to a pro-trade agenda constitutes a de facto protectionism and undermines his economic and foreign policy objectives.

At least, in response to a clause in the climate change law that would impose economic sanctions on those nations that don’t limit their carbon emissions, Obama said: “At a time when the global economy is still deep in recession and we’ve seen a significant drop in global trade, I think we have to be very careful about projecting any protectionist signals.”

In this tepid rejection of protectionism lies the essence of the new U.S. commercial policy: conditional, ambiguous, and not particularly soothing.

At the start of this year, Obama suggested that Congress avoid language that could provoke a trade war while exploring the impending American stimulus package. Congress responded, eliminating the most protectionist clauses of the bill, but “buy American” fever still managed to contaminate nearly all aspects of government spending. The uncertainty surrounding the complicated regulations has caused contractors to do their own evaluations of what does and doesn’t qualify. Foreign business markets that meet the qualifications are facing exclusion by contractors, but so are U.S. companies that use primarily imported materials.

The Canadian municipalities have responded with “don’t buy American” regulations, while China and other countries introduced “buy local” clauses in their stimulus packages, all of which cost American exporters and the U.S. economy in general. The president’s negligence regarding the issue is decelerating economic recuperation, provoking more reprisals from our commercial partners and cementing the U.S. economic reputation as a less reliable partner in materials than international commerce.

Furthermore, when Congress stopped financing a program that permitted Mexican truck drivers to operate on U.S. roads (violating NAFTA), Obama offered guarantees of a rapid solution. Five months later, there is no visible fix. To press a solution, the Mexican government, in reprisal, imposed tariffs of 2.4 million dollars on some ninety American products, and a Mexican truck driving association demanded 6 million dollars from the U.S. government.

The reduction in trade and movement over the border can’t be the economic elixir that Obama had in mind, nor is the dispute his preferred starting point for diplomatic relations with Mexico. However, the administration is satisfied, after five months, with simply studying the problem. How much studying is needed to conclude that it is a bad idea to openly violate obligations within NAFTA, in addition to the potential direct cost of 8.4 million dollars and the rise in transportation costs for the entire U.S. supply chain, only to benefit truck driving syndicates?

Through it all, in spite of assertions that the government worked with Congress to pass the long-time pending free trade treaties with Panama, Colombia and South Korea, these treaties remain kidnapped by shameless politics.

President Obama speaks of internationalism and multilateralism in a recently renovated U.S. foreign policy even though his trade policy stinks of nationalism and unilateralism. This won’t help restore Washington’s image, especially when a large majority of countries consider U.S. trade policy to be the face of American foreign policy. The inconsistency between Obama’s words and his actions denotes a man preoccupied with politics, but trade policy is changing and Obama has a chance to lead his party toward the center.

In the next few days, Obama will give a widely publicized speech about the future of American trade policy. If he really wants to bring his party into the 21st century and he is truly aligned with the economic and diplomatic recuperation of the U.S., he should step away from his ambiguous rhetoric and push an agenda clearly in favor of free commerce.

[Editor’s note: quotes may be worded based on translated material].