Should Free Traders Be Concerned about KORUS and the Short-term Prospects for US Trade Policy?

In response to my concerned Friday blog post on President Obama's recent meeting with congressional protectionists on the US-Korea FTA, I received the following comment from repeat-visitor "John B.":

How naive can you get? What did you expect Obama to say to Michaud and Co. -- take your list of demands and shove it? And did you expect Michaud to come out of that meeting and not put an overly positive spin on what had been said? The KORUS negotiations will certainly NOT be broadened to include labor, investment and finance. Everybody knows what would happen if they were: the Koreans would walk away and never come back. Your breathless posts about the administration's perfidy and fecklessness are getting a little tiresome.

Ouch.  Leaving aside the most obvious question here - i.e., why get so darn worked-up over a short Friday night blog post on international trade policy? - I think John's angry (and vocab-rich!) missive deserves its own entry instead of a simple comment-reply, so here goes.

First, let's be perfectly clear: I never said that Obama's meeting with the House Trade Working Group definitely signaled that the KORUS negotiations were going to be "broadened to include labor, investment and finance."  Indeed, I clearly noted that "option #1" was that this meeting was just for show and that the White House would, at best, relegate Michaud's protectionist demands to a side letter.  So before we start name-calling, let's get our facts straight.

That said, my option #2 certainly was that the White House would consider more extensive - and potentially dangerous - KORUS "tweaks" based on the Working Group's key issues.  And I certainly did admit that, after the last week or so of administration acquiescence and incompetence, I was "leaning" towards this distressing option.  However, was my "lean" really so, as John says, "naive," and are my concerns really that tiresome?  I don't know about you, but after looking at all of the facts, I certainly don't think so. And here's why:

• First, no one ever said that the Working Group's demands consisted entirely of agreement-killing poison pills (although they'd almost certainly require substantive changes).  And if, as the Koreans claim, the United States' demands on autos and beef will require re-opening the negotiations, then is it so crazy to think that one or more of the administration's chits will be related to the Working Group's concerns?  Before last Thursday's big meeting, I actually would have answered that question with a pretty definite "yes, it's crazy."  I would have told you that the President, assuming he really cares about locking KORUS down in the very near term, was going to focus on beef (Baucus) and autos (Levin/Camp) and leave all other issues to the side - certainly those raised by the anti-trade wing of the Democratic Party.  But considering that the very first public meeting the President had on KORUS after returning from Seoul was with the House Trade Working Group, and not with, say, Democrat free traders like Henry Cuellar or the pro-KORUS GOP leadership or with Levin/Camp/Baucus, there's clearly room for doubt, isn't there?  The most logical move for a President committed to getting this deal done ASAP would have been to go straight to either the FTA's biggest allies or the beef and autos folks in order to shore up his numbers and/or resolve these two relatively minor obstacles.  But he didn't, and that's disconcerting.  (Now, maybe he's just some sort of political Jedi master, but, well, this ain't 2008, so we have plenty of reasons to question that hypothetical.)

• Second, the Seoul impasse proved without question that the Administration simply is unwilling to expend the political capital necessary to move KORUS as-is, despite the fact that (a) most congressional vote-counters have opined that the KORUS votes are there right now (and certainly will be in the 112th Congress); and (b) as I noted last week, Trade Promotion Authority ensures that no single congressman or senator, no matter how powerful, can sidetrack the FTA's implementing legislation once Obama submits it to Congress.  Thus, the President has shown us that, regardless of his pro-KORUS rhetoric, he's unwilling to fight for the current agreement and needs to find a new way forward.  I don't happen to think that there is such a "new way," but that doesn't mean that the White House isn't exploring every option out there - including attempts to garner support from the unlikeliest of sources (i.e., Michaud & Co.).  And, like I said in point #1, if they're going to re-open the deal anyway.......

• Third, over the past two years, the President has repeatedly proven himself utterly unwilling or unable to confront the protectionist wing of the Democratic Party, so why should this change now?  Just because he said he supports KORUS?  Come on.  Just look at the depressing facts for a second.  Obama has placated his anti-trade base (and their congressional muscle) on Buy American, Mexican Trucks, Chinese Chicken Imports, Section 421 (tires), Section 301 (Chinese "green" subsidies), changes to US trade remedies laws, carbon tariffs - the list literally goes on and on.  He shelved his early 2009 support for the Colombia and Panama FTAs (and KORUS until last June) at the first whiff of congressional stink.  He has embraced mercantilism and adopted a "trade policy" in the NEI that is as unoffensive as it is ineffectual.  And when, much to the delight of free traders and the world's leaders, he finally made a "stand" on an absolute no-brainer in KORUS, he quit at the finish line with literally the whole world watching.  In short, when Obama's big moment to prove us doubters wrong came, he "voted present."  Again.

Yet after all of this, John B. (quite condescendingly) assumes that Obama (a) really, really wants to move the KORUS agreement through Congress and (b) will grow a spine and confront Michaud & Co. in order to get that done.

Maybe he will, but I'm the naive one for now having a little doubt about that?  Really?  Physician, heal thyself.

Look, everyone knows that completing and implementing big trade agreements like KORUS or NAFTA (or the WTO's Doha Round) requires strong leadership from the top.  The President alone has the platform to debunk the myriad protectionist myths out there and to champion the national interest over insular constituent politics.  But in order to do this, he must have both the ability and desire to take on partisan protectionists, loudly advocate free trade, and then actually advance and implement the trade liberalization policies that he champions.  Bill Clinton and George W. Bush had that ability/desire, and they backed up their rhetoric with action.  So far, Barack Obama hasn't. 

So maybe President Obama will come through in the end, finalize the agreement, and prove us weak-kneed KORUS-doubters wrong.  I, for one, would be happy to praise him when/if the agreement is passed into law (even though it took two years too long to happen).  But so far, Obama has failed pretty much every major trade test put before him, and then, after voluntarily staking his big trade comeback on the KORUS, he's thus far failed on that too. And to top it all off, he returns from the Great Seoul Setback, and his first public meeting is with folks in Congress who want nothing more than to see KORUS disappear.  So excuse me if I'm a tad concerned and doubtful at this point, but I hardly think one can fault me for "breathlessly" lamenting this absolutely-messed-up state of affairs.

And if that makes me "tiresome," then so be it.