Wednesday, January 28, 2009

Five lessons for new U.S. trade policies

An experienced American trade negotiator, Robert B. Cassidy, is speaking out with a candor rare among high-ranking trade bureaucrats. Cassidy, a former assistant U.S. Trade Representative,is discussing the mistakes of the past and the lessons that should be learned from them by the Obama administration.

In remarks before a packed audience at the Economic Policy Institute (EPI) in Washington on January 27, Cassidy, now in private practice, offered “five overarching lessons” to guide any overhaul of U.S. trade policy.

Fortunately, EPI provides the full text of Cassidy’s talk on its Website, from which this report draws his five lessons and a brief explanation of each, as follows:

First: Trade policy should be based on U.S. economic self-interest, not as the equivalent of corporate self-interest, nor as a subset of foreign policy. Cassidy cites the free trade agreement with Korea as one motivated largely by foreign policy objectives, in this case to surround China with bilateral FTAs.

Second: Trade policy as such has only limited reach. Global monetary, fiscal, and competition policies are more important. As the “only country capable of standing up to China,” the United States should take the lead in the WTO in challenging China’s manipulated exchange rate.

Third: The advisory and decision-making processes of trade policy “need to be balanced,” that is enlarged beyond State, Treasury, and Commerce (plus Agriculture occasionally) to include Labor and environmental interests. The present race to the bottom on labor standards should be abandoned, and indeed can be abandoned fully consistent with WTO principles.

Fourth: We need to get our trade relationship with China on a more balanced footing by asserting our interests more aggressively. On our imports of tainted foods, why are we relying on China to safeguard the health of our citizens?

Fifth: Reconsider “trade promotion authority” to make negotiations more transparent and negotiators more responsible in pursuing our objectives.

The administration, according to Cassidy, should take advantage of a “short window of opportunity” to ensure that the benefits of trade “flow to the broader U.S. economy. . . and help achieve other goals such as improved labor standards and environmental objectives.”

Print Page

No comments: