EVENTS

Date:	Wednesday, January 26, 2005
Time:	4:00 PM -- 5:45 PM
Location:	Wohlstetter Conference Center, Twelfth Floor, AEI 1150 Seventeenth Street, N.W., Washington, D.C. 20036

January 2005

Trade Policy: The Next Four Years

On Wednesday, January 26, AEI continued its trade policy series with a conference addressing trade issues in the next four years. AEI recruited four trade policy experts from leading Washington think tanks to give their evaluations and predictions. The aim of the conference was twofold: first, have the panelists set forth their views on major issues and challenges--prospects for the Doha Round, bilateral and regional trade negotiations with East Asia and China, and the politics of trade--over the next four years; and second, given their views of unfolding events and trends, to have the panelists suggest the priorities for the president and new trade negotiator.

Gary Hufbauer
Institute for International Economics

The United States Trade Representative (USTR) has two enormous tasks in the upcoming administration. First, President Bush need to be convinced that trade is important to the world and to the U.S. economy. To begin with, the president needs to be persuaded that we should stop price and production subsidies and phase out textile and apparel market access. This can be politically difficult to negotiate, but the United States must demonstrate a commitment in order for the rest of the world to consider a free trade agenda. Second, the USTR needs to persuade China, India, and Brazil to reduce their barriers. If countries of this size are unwilling to adopt more liberal trade measures, how can we expect smaller, undeveloped countries to do the same? Given these two tasks, it is fair to view the Doha Round with skepticism. The job of the USTR is to make the Doha Round its top priority--even if it means reducing regional free trade agreements.

Lael Brainard
Brookings Institution

The administration is aligned to make sweeping changes in trade policy. It is worth noting that six of the last eight trade negotiations were accomplished with a unified government like we have right now. The president has put some emphasis on reenergizing multilateral trade negotiations, but trade is only referenced with respect to geopolitical considerations. In contrast, Asia remains squarely focused on trade and growth, and China is using its growth to exercise political power. Some observers argue that this is an inevitable conclusion. In contrast, the United States has not been able to make progress on a regional front. The Doha Round needs to move forward with decisive action, and this will expend some of the president’s political capital. This may require putting some bilateral and preferential trade deals on the backburner in order to free up negotiating resources.

Brink Lindsey
Cato Institute

I do not expect much progress on free trade from the president, but I will say that the president had significant accomplishments in his first term. However, he did disappoint when it came to deciding between free trade policy and politics, and there is no indication that this will change. That said, I do believe some progress will be made. The Doha Round will conclude seemingly weak and modest. There is enough responsibility to go around since all parties involved are defensive. What the USTR should do is encourage the president’s notion of freedom and apply it to trade policy. It is not too late to change some of the administration’s protectionist policies. The United States can and should show leadership in pursuing a free trade agenda and not wait for offers from other countries. We should recognize that we are in a unique position to influence developing nations and encourage liberalization.

Edward Gresser
Progressive Policy Institute

This is the right environment to embark on an ambitious trade agenda. Congress seems to favor it, and the public supports it or is at least indifferent. Despite large imbalances and outsourcing, the public is not tremendously alarmed and will let the administration push its own agenda. Concerning Asia, the United States needs to take an activist approach. The Muslim world should also not be overlooked, especially with security considerations as a backdrop. These policy changes are necessary and not as difficult as they appear.

AEI research assistant Jessica Browning prepared this summary.