Sunday Quick Hits

Here's a whole lot of links to get your week started off right:

• The Economist asks whether we're seeing the end of China's dominance as the world's low-cost manufacturer of first resort.

• J.E. Dyer absolutely dismantles labor lawyer Thomas Goeghegan's lame defense of NLRB's indefensible attempt to stop Boeing from opening a new manufacturing facility in South Carolina.

• GMU's Russ Roberts beautifully explains why President Obama's silly comments about ATMs taking American jobs are so darn silly.  (And Cato's Andrew Coulson piles on.)

• The AFL-CIO's use of a 13-year old photo in its latest anti-Colombia FTA smear campaign is the perfect metaphor for its trade policy more broadly - stuck in the past.  Meanwhile, Colombia hits yet another labor benchmark that was supposed to ensure passage of its FTA with the United States.  Key words: supposed to.

• AEI's Phil Levy provides a great roadmap showing how we got into the current mess re: Trade Adjustment Assistance and how we can get out of it.

• And while TAA gums up passage of pending US FTAs, our potential FTA partners in South Korea and Colombia are lining up another, rather conspicuous suitor - China.  Awesome.

• And the TAA/FTA impasse also has infected [$] ongoing US trade negotiations under the Trans-Pacific Partnership.  Double-awesome.

• AEI's Mark Perry highlights the amazing gains in US worker productivity in our allegedly struggling manufacturing sector.

• Cato's Dan Griswold shows how IBM's remarkable evolution is a perfect metaphor for the US economy.

• Is America's stupid ethanol policy on the way out the door?  If this recent Senate vote is any indication (and it might not be), yes.

• Cafe Hayek's Don Boudreuax provides some great commentary on the House's vote to cut off those embarrassing US bribes to Brazilian cotton farmers.  John Stossel has more.  (And Brazil unsurprisingly grumbles about it all.)

• Can we please, PLEASE stop labeling free traders who support practical limits on US foreign policy adventurism "isolationists"?

• Mark Perry and Dan Griswold team up to explain how people's blinkered obsession with the US trade deficit misses the other, inevitable side of the coin, our massive foreign investment surplus:

If these don't leave you sufficiently depressed about US trade policy, then nothing will. 

Thursday Quick Hits

Here's some more light reading to get you ready for the weekend:

• Cato's Sallie James is back banging her TAA drum again (fortunately for us); this time, she exposes the "flawed logic" behind certain misguided arguments in support of TAA.  James actually raises some of the same arguments that I raised in my comments to this post (but to much better effect, as usual).  Meanwhile, the GOP appears to be stiffening in the face of the Obama administration's TAA demands.

• David Harsanyi beautifully explains why "Buy American" is inherently un-American.  Here's my favorite part: "Nobel Prize-winning economist and New York Times columnist Paul Krugman once explained in his book 'Pop Internationalism' that if he could stress one thing to students, it would be that 'international trade is not about competition, it is about mutually beneficial exchange.' Wasserman Schultz is bright, so she must know all about the counterproductive history of protectionism. Then again, when she says 'Buy American,' maybe she just means 'Buy Union' — buy union because taxpayers subsidize GM and it pays workers and they subsidize unions that subsidize the right candidates. A mutually beneficial exchange."

• Jonah Goldberg quickly explains why E.J. Dionne's liberal fantasies about copying Chinese and European industrial policy are anything but "innovative."

• Utterly unsurprising news of the day: the government subsidizes consumption of Chevy Volts, and people - this time, car dealers - end up gaming the system.  Shocking, I know.

• Iowa Congressman Steve King calls for an end to US Ethanol subsidies.  Yes, you heard that right - a guy representing IOWA supports terminating America's Corndoggle, yet certain presidential candidates (and the current guy in charge) refuse to do so.  Panderiffic! 

• After five grueling months of not-trying-at-all, Treasury Secretary Tim Geithner announces that the administration's vague-and-not-very-bold corporate tax reform "plan" is on indefinite hold.  Meanwhile, "Executives from major U.S. businesses told lawmakers Thursday that they would be willing to give up major tax breaks in exchange for a lower top corporate tax rate." Great timing as usual, Mr. Secretary (and the USA still has the highest corporate tax rate in the industrialized world - sweet).

• More swine at the trough - this time, textile congressmen are "worried" about the imaginary textile section of a thus-far-imaginary FTA, the Trans-Pacific Partnership.  Somewhere, the ghost of Mancur Olson is nodding with approval.

That's all for tonight.  Go Mavs!

It's Official: US Trade Policy is an Embarrassment (But That Could Actually be a Good Thing)

Late Friday night, when you were home nestled all snug in your bed (or out at some bar), the White House issued a Presidential Proclamation that May 16-22, 2010 - yes, the week starting 30 hours after the notice was issued - would be World Trade Week:

NOW, THEREFORE, I, BARACK OBAMA, President of the United States of America, by virtue of the authority vested in me by the Constitution and the laws of the United States, do hereby proclaim May 16 through May 22, 2010, as World Trade Week. I encourage all Americans to observe this week with events, trade shows, and educational programs that celebrate the benefits of trade to our Nation, American workers, and the global economy.

I don't know about you, but I have been scrambling ever since the big announcement to put together my event/trade show/educational program - my "celebration!" - of the benefits of "trade" (not "free trade") to our nation.  (The Evite is in the mail!)  Cato's Dan Ikenson has done his part with a stirring blog entry/call-to-arms on US trade policy and the President's obvious love therefor:

Mr. President, I applaud your efforts and recognize that decision must not have come easily. There were probably late-night discussions with your staff, contemplative 2am walks through the Rose Garden, and perhaps some sleepless nights. To even imply that trade may be beneficial to Americans—this close to November, no less—was an act of profound political courage.

Indeed.  Ok, ok.  I think that by now you understand that Dan and I are - shocking, I know! - being rather sarcastic about the President's big announcement.  But can you blame us?  Not only was the White House's press release and proclamation more neutered than Bob Barker's dog, but it also was issued a mere 1.5 days before the exciting week was to officially begin.  Thus, only those of us who are really in-the-know were aware enough to RSVP for such riveting USTR World Trade Week Events like USTR Ron Kirk's closed-to-the-press meeting with South Korean Trade Minister Kim Jong-hoon, or the environmental roundtable focusing on trade and illegal logging, or the USTR/Labor Dept. meeting of the Sub-Committee on Labor Affairs created under the United States-Morocco FTA.

World Trade Week Fever, baby!  Catch it!

Of course, the other important fact of the Presidential Proclamation's timing was that it was issued as part of the White House's traditional "Friday Night News Dump."  For those of you who don't know, the Obama administration (like its predecessor) has a long history of releasing bad or embarrassing news on Friday night after the evening news cycle so that the announcements' first TV mention won't be until Saturday morning when most normal people are enjoying their weekends and not watching FOX or CNN.  Indeed, the only other time that the Obama White House has released a Friday night international trade announcement was the President's controversial decision to impose prohibitive tariffs against Chinese tires pursuant to "Section 421" of US trade law - a move that's still biting the President (and American exporters) where the sun don't shine.

So why did the White House release the proclamation on Friday night?  Well, I see two possibilities.  First, they're afraid of stirring up controversy with the trade-hating part of their political base, so this was an easy way to keep it under the radar.  But as Ikenson notes above, the World Trade Week announcement didn't have a single controversial word to it.  Consider this riveting excerpt:

To ensure American companies have free and fair access to global markets, we are enforcing existing trade agreements, addressing issues in pending agreements, and forging new ones that protect our businesses, workers, consumers, and environment. We are also opening new markets and encouraging development with trade preference programs. These steps will bring us closer to accomplishing the ambitious goal I set in this year's State of the Union address to double our Nation's exports over the next five years.

As we pursue measures to safeguard our future prosperity, we must remember that we still have the most innovative and productive workers in the world. We have the most dynamic and competitive economy, and we remain the top exporter of goods and services. As other nations and markets grow, our leadership will not be guaranteed. Yet, our success has never been guaranteed. It has been forged through decades of hard work, ingenuity, optimism, and common purpose.

This week, let us renew the enduring principles that have driven our Nation to the forefront of human progress. With our ships, trucks, trains, planes, and fiber optic lines, we will send our goods and services to every corner of the globe. Together, we will make this new century an American century yet again, and secure a bright future for generations to come.

Ok, so is it really plausible that empty words like these were issued as part of a Friday Night News Dump to avoid scrutiny from unions and other anti-traders?  I mean, even with a few important 2010 primaries tomorrow, it seems like a real stretch to think that the AFL-CIO is going to issue an all-points electoral bulletin against the White House's support for America's "innovative and productive workers" or its "ships, trucks, planes and fiber optic lines." 

I guess it's possible, but I'm skeptical that this is another example of White House free trade cowardice - even this White House.  Instead, I think the more likely reason for the President's Friday night announcement is that his administration is truly embarrassed that it has absolutely nothing to announce.  Pending US FTAs with Panama, Colombia and Korea aren't going anywhere this year, and meanwhile it seems like every other country on the planet is implementing their own trade agreements (without the US) at a breakneck pace.  The WTO's Doha Round is absolutely dead, and the United States' inaction is one of the main reasons why.  The Obama administration still hasn't announced a formal trade policy (and might never do so), and USTR's 2010 "trade agenda" has almost no mention of half of the "trade" equation - imports.  Indeed, the administration's top "free trade" moves - the National Export Initiative and the Trans-Pacific Partnership - are so harmless that not even the staunchest of protectionists have found reason to complain (yet).  As I said a while back, calling the NEI and TPP "free trade" is like calling onanism "free love," and that bad joke still applies today.

Now, I've blogged often about the administration's inaction on trade, but over the past several months I've been joined by many other commentators, mainstream news outlets, American business leaders, and US trading partners.  Even political leaders in the President's own party are beginning to complain about our trade non-policy, so for Obama to loudly and publicly announce the beginning of World Trade Week would call even more attention to what's quickly becoming quite the black eye for the White House.  And I can't really blame them for wanting to avoid more scrutiny on this embarrassing issue.

But hey, there's actually a small silver lining to my dark-clouded theory: if I'm correct and the World Trade Week proclamation was issued late Friday out of embarrassment instead of political cowardice, there might still be hope for this administration on free trade.  It shows that they actually comprehend just how bad their trade non-policy is, instead of thinking that they have over the last 16 months crafted a decent free trade policy that needs to be shielded from anti-trader scrutiny during the 2010 election season.  Because if this is really the President's best shot on trade, we're in deep, deep trouble for the next 2+ years.

They say that admitting you have a problem is the first step to overcoming that problem.  Maybe the White House's World Trade Week embarrassment is a sign that the President and his advisers have taken, or are almost ready to take, that step.  And if so, maybe there's a little hope for American trade policy after the November mid-term elections.

Maybe.

Monday Quick Hits

A few noteworthy things on this busy Monday:

• Apparently, the United States' position in the TPP negotiations is lactose intolerant.  In a new Washington Times op-ed, Cato's Sallie James notes some rather distressing statements from USTR Ron Kirk indicating that the US could support significant restrictions on dairy imports as part of the new Trans-Pacific Partnership Agreement.  If USTR does indeed pursue such negotiated protectionism, it's further proof that free traders just shouldn't get too excited about the TPP negotiations.

• China's trade balance continues to thwart American currency hawks' simplistic talking points about the RMB's undervaluation.  In March, China reported its first trade deficit in years.  Today we find that China shifted back to a trade surplus in April, but it was a whopping 87% smaller than April 2009, and the Jan-April 2010 surplus was 79 percent smaller than January-April 2009.  As the linked Bloomberg article correctly states, these data "may ease pressure for gains in the yuan and support Premier Wen Jiabao’s argument that the currency isn’t undervalued."  Bloomberg also hits on something that AEI's Phil Levy said last week:  "The sovereign-debt crisis in Europe that today prompted a loan package of almost $1 trillion to help nations under attack from speculators may also encourage Chinese officials to delay ending the yuan’s peg to the dollar."  Somehow I doubt, however, that the currency hawks care about such facts or will be revising their statements accordingly.

• United States' new man in Geneva: "For those of you hoping for the quick completion of a Doha Round Agreement, just stop."  The new US ambassador to the WTO, Michael Punke, told reporters today that there can be no "quick fix" to end the deadlock in the World Trade Organization's long-running Doha Round talks.  Of course, we all knew that already because such resolution requires American political will that's been missing since 2008, but it's good to know that Punke's not getting any crazy ideas about, you know, actually completing an ambitious, economically-beneficial multilateral agreement anytime soon.  Whew!

• Bi-partisan Senate support for KORUS FTA is nice, but....  The AFP reports that Sens. John Kerry (D-MA) and Richard Lugar (R-IN) sent a letter to President Obama calling om him "to submit a long-delayed free trade agreement with South Korea to Congress for approval."  The letter "urged Obama to work with lawmakers to end feuds over beef and automobiles that have held up the pact.  'Submission of the agreement to Congress also would be considered a significant show of solidarity with a close and reliable ally,'  they said in a letter dated Friday, calling for action 'as soon as possible.'"  Kerry is the chair of the Senate Foreign Relations Committee and Lugar its ranking member.  Their letter is available here.  Hey, do you think that North Korea might just have something to do with the Senators' KORUS letter?  (Obvious answer: Yes.)  Do you think that it'll change KORUS' near-term outlook in Congress?  (Obvious answer: No.)

• Ways & Means GOP to Dems: "Hey, do you guys remember the bi-partisan deal we all signed way back in 2006 that was supposed to pave the way for congressional passage of pending FTAs?  No?  Well, we do."  The Ways & Means Republicans celebrated the third anniversary of the 2006 "bi-partisan trade deal" by releasing a report "showing the harm suffered by American agriculture due to a failure to move forward on pending trade agreements."  The report is available here.  No word on whether the GOP press release and report were accompanied by a sugary cake and three candles.  (But I'm guessing that they were not.)

• A nice (long) summary of European climate change and carbon tariff developments and next steps.  Feel the excitement!

That's all for tonight, folks.

Friday Quick Hits: Headlines Edition

I have a lot to share, so it's headlines-only today.  Yes, yes, I know: I'm lazy.  But hey, you're still getting your money's worth in this deal.

• Koreans are big drinkers; too bad American wine faces a stupid tariff that exists only because the President is afraid to confront his base re: US-Korea FTA.

• USTR: "The KORUS FTA would be great for the US economy, but we have no timeline because, well, our administration stinks at selling free trade." 

• Japan renews its WTO request to impose almost $250 million in tariffs on US exports because of America's failure to stop zeroing in antidumping reviews.

• The EU fecklessly hid an official document showing that its biofuels policies actually harm the environment.

• AEI's Phil Levy: Europe's stupidity is making a US-China clash over currency more likely.

• WSJ's Sternberg: globalization means that RMB appreciation won't dent the US-China trade balance (via Mark Perry).

• Six reasons to repeal the capital gains tax.

• US Transportation Secretary: "A Mexican Trucking solution is 'very close.'  Yes, I know I said it was 'very near' two months ago, but can you please stop laughing at me?  Oh, come on, stop.  Please?"

• US manufacturing sector grows for the ninth straight month.

• US manufacturing sector added the most jobs in April (44,000) since 1998.

• Could Malaysia join the TPP?

• China preliminarily decides to impose countervailing duties up to 31% on US chicken exports.  No one mentions Section 421.

• The myth that is China's green energy dominance.

New Op-Ed: On Trade, It's Put Up Or Shut Up

I have a new op-ed in The Daily Caller today.  I hope you like it; as always, your feedback is welcome.

On trade, it’s put up or shut up

With his signature health care legislation now law, President Obama has a little under three months to prove that he actually supports free trade. After that, all bets are off.

By almost any metric, the Obama administration’s trade policy has been a disappointment. Inaction pervades, and our trading partners have gone from mildly annoyed to downright hostile. But the American trade agenda didn’t always look to be headed this way. In Spring 2009, the White House dramatically reversed the protectionist campaign rhetoric of then-Senator Obama. U.S. Trade Representative Ron Kirk launched an aggressive campaign advocating free trade and denouncing protectionism. The White House’s first Trade Policy Agenda called for ratification of the pending U.S.-Panama Free Trade Agreement “relatively quickly,” and sought to advance other completed FTAs with Colombia and South Korea. The Agenda also unequivocally supported the World Trade Organization and NAFTA, and anticipated congressional renewal of the President’s “fast track” trade negotiating authority.

Then political reality set in.

Immediately following the shift in White House trade rhetoric, congressional protectionists, almost all within Obama’s own Party, launched a stifling counter-offensive. Senator Sherrod Brown (D-OH), for example, expressed disappointment with USTR’s pro-NAFTA rhetoric and pledged to make it clear to President Obama that “our trade policy is not working and that it needs fixing.” Such comments proved effective. The White House abandoned overt free trade actions and speeches in order to secure needed health care votes from anti-trade Democrats – a move that Rep. Henry Cuellar (D-TX) apologetically confirmed at June 2009 Cato Institute event.

As the health care debate stagnated, so did US trade policy, and it remains that way today. Signed FTAs remain shelved, despite the fact that the EU, China and others have negotiated preferential deals with the same FTA partners, each to the competitive disadvantage of American companies. The WTO’s Doha Round negotiations are comatose, even though an ambitious Doha deal would provide billions in benefits to US economy. And US exporters endure superfluous pains because the White House has failed to resolve several bilateral trade disputes, including $2.4 billion in Mexican tariffs resulting from the United States’ NAFTA-illegal ban on Mexican trucking, and the threat of almost $900 million in Brazilian sanctions based on US non-compliance with WTO rulings against American cotton subsidies.

Despite these problems, some might argue that the National Export Initiative and the Trans-Pacific Partnership negotiations are concrete evidence that the Obama administration is dedicated to free trade. But real free trade policies – like the pending FTAs – involve immediate market liberalization at home and abroad. The NEI, by contrast, is a one-sided, non-controversial program which seeks to expand US exports through a timid combination of margin-tweaks that most economists believe will have little effect on US trade flows. Thus, calling the NEI “free trade” is like calling onanism “free love.”

The TPP Agreement, on the other hand, could yield significant trade gains, but would take years complete. Indeed, USTR Kirk lauded the TPP negotiations precisely because they won’t be completed for years. Of course, this is the same USTR whose 2010 Trade Agenda mentioned the word “import” only five times, and never once in terms of domestic market access. So Kirk’s statements about the TPP and the administration’s advancement of the NEI are hardly surprising. They’re just par for the cowardly course.

Throughout all of this, administration officials and the few free trade Democrats in Congress have quietly reassured the US business community that America’s free trade legacy will re-emerge once the contentious health care debate is over. In September 2009, Transportation Department officials told a concerned group of affected exporters that the White House would not resolve the Mexican trucking dispute because the President needed Teamster support for ObamaCare. And at an October 2009 event, Reps. Cuellar and John Tanner (D-TN) assured their audience that the FTAs would progress once the health care debate ended.

Well, folks, health care’s over. Time to put up or shut up.

Most of the United States’ current trade irritants are within the White House’s control to fix, as long as the President willing to expend an iota of political will to get things done. Signed U.S. FTAs have already been ratified by the partners countries and now only require the President to send their respective implementing legislation to Congress for ratification. While many congressional Democrats will resist such legislation, Obama can expect significant support from Republicans, many of whom, like House Trade Subcommittee Ranking Member Kevin Brady (R-TX), have routinely called on the President to submit the trade deals. Other issues show similar potential for bi-partisan resolution. All they require is an end to the White House’s politically-motivated ambivalence.

In late June, Washington will turn its attention to the November mid-term elections, and controversial legislation will become untouchable. If President Obama and his free trade supporters really mean what they’ve said over the past year about the President’s commitment to free trade, the White House will move on one or more of the unresolved trade issues before this “silly season” begins.

If, on the other hand, June comes and goes, and these issues are still unsettled because of the administration’s political calculations, then the die will have been cast. And no amount of excuses will be able to convince American businesses and consumers that this President really cares about free trade.

*     *     *

Bloomberg's Al Hunt strikes a similar note in his op-ed today.  I highly recommend giving it a look.

Tuesday Quick Hits

Lots of hit-worthy stuff over the last few days:

• Well, that sure didn't last long.  Last week I expressed serious* concern about our beloved United States Trade Representative because he had uncharacteristically ditched his longstanding mercantilist rhetoric and was bizarrely evincing a rare moment of import-loving clarity.  Well, fear not, dear readers!  Ron Kirk was not - I repeat NOT - abducted by economically-literate aliens.  According to multiple news reports, after blurting a litany of scripted sanity, Amb. Kirk immediately slipped back into his import-hating fog, reflexively poo-pooing a bill that would unilaterally reduce tariffs on imported footwear: "Kirk told the [audience] that with respect to trade-related issues the administration’s focus is on increasing exports, not imports. 'It’s hard to look at our trade deficit and the openness of our economy and make a compelling argument to the American public that we don’t have enough imports'.... In addition, Kirk said, the administration believes that an effort to lower tariffs on imported footwear is more likely to be acceptable to Congress in the context of a multilateral agreement like the ongoing Doha round where the U.S. would get something in return. Given that the benefits of duty elimination would flow almost entirely to one country (which is undoubtedly China even though Kirk did not mention it by name), Kirk said, it would be politically difficult to persuade lawmakers to grant such a concession unilaterally."  Now that's more like it, Ambassador!  Of course, there's one tiny, technical problem with this statement: as even your basic college freshman knows, China would reap the second-most benefits from this bill.  The United States (particularly lower-income American families) would reap the biggest share of benefits (i.e., half of them) through lower prices for a basic necessity - shoes.  I guess Kirk wasn't kidding about not "focusing" on imports, huh?  (Clearly, the aliens have left the building.)

• Maybe, just maybe, American manufacturing isn't the pathetic loser that our politicians allege.  Courtesy of economist Mark Perry: "The Federal Reserve reported today that Industrial Production increased in February by 1.7% compared to the same month last year, the largest increase since the 2.2% gain in January 2008. The February gain followed a year-to-year increase in industrial production 0f 0.90% in January, marking the first time of two consecutive monthly gains since January-February of 2008, and reversing 21 months of negative annual growth from March 2003 to December 2009."  Well, whaddaya know.

• TPP, we shall see.  Cato's Sallie James has a great new paper out on the proposed Trans-Pacific Partnership agreement between the United States and Brunei, Chile, New Zealand, Singapore, Australia, Vietnam, and Peru.  Quick summary: "The first negotiating session of this group will meet this week, March 15–19, in Melbourne, Australia. While any positive move from the Obama administration on trade is welcome—especially in light of almost a year's worth of neglect at best and protectionism at worst—there were ominous caveats and concessions in the announcement for those who cared to look. Those murky details call into question the true value of this deal, especially when more valuable, signature-ready agreements are sitting in the hopper."  Sallie provides lots of good data/evidence to back up her claims (natch), so be sure to check out the whole thing.  And as I've already noted, I think she's probably being too kind. 

• The world and I share a common distaste for Paul Krugman's latest op-ed.  Apparently my humble criticism of Paul Krugman's latest journalistic malfeasance re: China's currency had some great company, e.g., here, here, here, here, here and here.  Heck, there's even a video-fisking!  Good to know.

• Obama might totally blow off Indonesia and Australia because of healthcare.  Rumors abound.  All I can say is, "Dude, seriously?" 

Wednesday Quick Hits

A few interesting things worth noting before getting to spicier fare:

• Brazil delays... again.  According to BNA (subscription), Brazil announced Monday that it will delay a final list of US exports that will face retaliatory tariffs because of the United States refusal to reform its cotton subsidy programs in conformity with a long line of adverse WTO decisions.  This is the latest in a series of delays for the retaliation, and whether Brazil will ever finally impose the sanctions is uncertain.  The final list is now supposed to be released on March 8th.  We shall see.  For more information on the US-Brazil dispute and its implications, check out this recent piece that I co-authored with with Daniella Markheim of the Heritage Foundation.

• Protectionist rhetoric as email auto-reply. One of the constant themes of this blog is how attempts to "sell trade" through a mercantilist, exports-only trade policy will inevitably backfire because anti-trade groups will immediately respond by pointing out the US trade deficit (exports minus imports) as crystal clear evidence that America is "losing at trade."  Well, I noted Monday that the United States' 2010 Trade Policy Agenda took the mercantilist tack and then warned of "the deleterious effects on the American trade debate of an "exports-good-imports-bad" approach to trade policy."  And, like clockwork, the anti-trade group Global Trade Watch teed off on the White House's softball by - you guessed it - screaming about how the US trade agenda "continues to mimic the misrepresentations that the Bush administration borrowed from the U.S. Chamber of Commerce with respect to only considering the role of exports on U.S job creation, as if the U.S. did not have a massive job-killing trade deficit. An example is the hilarious statement about 10 million U.S. jobs being supported by exports in 2008 – a year we had a $696 billion deficit – without any reference to the net U.S. jobs effect of the flood of imports underlying that deficit."  How USTR Ron Kirk actually plans to "ensure broad support among the US public for new trade proposals" by using this misguided exports-only strategy is beyond me. 

• TPP under siege by the usual cast of characters.  Reuters reports that representatives of the US "dairy, sugar and textile sectors" are staking out their protectionist territory in advance of the first round of negotiations under the new Trans-Pacific Partnership framework.  I'm sure that you are just as shocked (shocked!) as I am at this development.

US Begins TPP Negotiations, But Don't Get Too Excited

Finally, some good news on the US trade policy front: the Obama Administration announced today that it will begin formal negotiations to enter into a new free trade agreement (FTA):

United States Trade Representative Ron Kirk today notified Congress that President Obama intends to enter into negotiations of a regional, Asia-Pacific trade agreement, known as the Trans-Pacific Partnership (TPP) Agreement with the objective of shaping a high-standard, broad-based regional pact. In letters to Speaker of the House Nancy Pelosi (D-Calif.) and Senate President Pro Tempore Robert Byrd (D-W.Va.), Ambassador Kirk said that such an agreement would help to expand American exports, saving and creating good jobs here at home. The first round of negotiations has already been announced by the current Trans-Pacific Partnership members for March 2010.

"USTR will now intensify consultations with Congress and with American stakeholders to develop objectives for the Trans-Pacific Partnership agreement negotiations, in order to enter already-scheduled talks in March with a robust U.S. view that seeks the highest economic benefit for America's workers, farmers, ranchers, manufacturers, and service providers, and that reflects our shared values on labor, the environment, and other key issues," said Kirk. "The development of our negotiating positions will be a collaborative effort with elected leaders and stakeholders here at home, in order to shape an eventual Trans-Pacific Partnership Agreement that is a new kind of trade agreement for the 21st century, bringing home the jobs and economic opportunity we want all our trade deals to deliver."

The administration's TPP move signals not only the administration's first formal FTA negotiations, but also one of its first concrete free trade actions since President Obama took office almost a year(!) ago. In a year that has featured lots of pro-trade rhetoric but little matching action (and a lot of protectionism), this is undoubtedly a good sign for the future of US trade policy.

However, the TPP announcement should not be oversold: it's a nice development, but some cold-water perspective is in order.

First and foremost, the White House announcement is the first step in a very long and complicated process of FTA negotiations, and it comes as the administration still refuses to submit completed FTAs with Colombia, South Korea and Panama to Congress so that the stalled agreements can finally enter into force. In this light, it's clear that the Administration's TPP decision is pretty low-hanging fruit and doesn't show a new and strong political commitment to free trade policies in the face of domestic opposition. (Indeed, as of this posting, I can't find a peep of opposition to the TPP announcement from the anti-trade crowd.)

Second, and in a similar vein, the United States already has bilateral FTAs with two of the TPP's four current members - Chile and Singapore. So while a new TPP agreement could later be expanded to include other Pacific nations, for now it's really only a "new" US agreement with the other two TPP members, the relatively insignificant Brunei (no offense!) and New Zealand.

Third, the USTR statement calling for a "new kind of trade agreement" makes it unclear (i) whether this administration will pursue the same high level of liberalization that was standard in past FTAs; and (ii) whether they will bog down the negotiations with labor and environmental demands that threaten to eliminate most of the FTA's trade benefits. That we have an FTA with two TPP members is a good sign that the TPP agreement will achieve similar levels of liberalization, but obviously the devil will be in the details.

Finally, the White House has submitted its announcement without Trade Promotion Authority (TPA, formerly known as "fast-track" negotiating authority), which expired in 2007. Although USTR submitted the TPP announcement under the old TPA framework, it's unclear that this Congress will give TPA to President Obama without substantial changes to the old system - ones that could dramatically increase congressional input and thus alter the final appearance of any new FTAs. (Indeed, in an election year, it's far from certain that the President will even seek TPA from a Democrat-controlled Congress that's increasingly skeptical of free trade.) Furthermore, our trading partners have historically been reluctant to fully engage in FTA negotiations with a United States that lacks TPA. Thus, it's unclear just how serious the early rounds of TPP negotiations will be without TPA in force.

So to summarize: today's TPP announcement is good news, but it's a very small step for US free trade policy. And considering the delayed FTAs, the stalled Doha Round, and the numerous instances of US protectionism in 2009, we still have a long, long way to go.