The Disastrous Trade Policies of the Obama Administration

by Pejman Yousefzadeh on November 12, 2010


Well-castigated by Phil Levy, in the aftermath of the Administration’s failure to conclude a free trade agreement with South Korea. An excerpt:

The economic merits and demerits have been in full public view since the agreement was originally concluded in the spring of 2007. The agreement offered substantial market opening, but left some questions regarding access to the South Korean market, especially for U.S. autos and beef. Those products face barriers other than simple border tariffs. Such non-tariff barriers are harder to negotiate away, though the KORUS agreement certainly tried. There was substantial political opposition to the agreement within both countries, though the Koreans managed to overcome theirs. Influential voices such as Ford Motor Co. and organized labor in the United States criticized the agreement as inadequate.

The well-established opposition just brings us to the stunning, perhaps unprecedented diplomatic incompetence just displayed by the White House. The concerns and obstacles that impede a new KORUS agreement were fully apparent in June when Obama announced he would have an agreement in time for the Seoul G-20 meetings (now underway). The announcement was remarkable at the time because so much of the U.S. president’s statements on trade have been vague, aspirational, and timeless. This was a promise to have a specific agreement concluded by a specific date.

Reflecting on the health care battle, Obama recently told 60 Minutes, “When you’re campaigning, I think you’re liberated to say things without thinking about, ‘OK, how am I going to actually practically implement this.’” That may be true, but the rules change once a president takes office. Most White Houses are exceedingly careful about making such public commitments. If the president’s credibility is to be put on the line, there is an absolute imperative to deliver. This is at least as true in international diplomacy as in domestic affairs. The debacle in Seoul is a slap in the face of a critical U.S. ally in a critical region, and it will cast doubt on U.S. trade promises in other negotiations elsewhere. But if an American president loses his credibility, the damage spreads beyond the narrow confines of economic deals and Northeast Asia.

Of course, Obama did not admit defeat. He spoke of the setback as a mere postponement. “We don’t want months to pass before we get this done. We want this to be done in a matter of weeks.” If the agreement really is just a few weeks’ work away, the administration ought to be deeply embarrassed. After the president made his June commitment, no formal talks were held with the Koreans until the end of September. Even then, the Koreans complained that the U.S. negotiators were not being sufficiently specific in their proposals. If the problems really are just technical ones, the Obama team has played the role of the student who procrastinates on a term paper, counting on the ability to have a really productive all-nighter. Such a work program evokes little sympathy when it doesn’t succeed.

I can’t help but think of all of the people who assured us, during the 2008 Presidential race, that electing Barack Obama would mean quantum leaps in the style and effectiveness of American diplomacy.

UPDATE: Of course, Andrew Sullivan–being Andrew Sullivan–chooses to focus on trivial things.

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