Resident Scholar Philip I. Levy

We don't yet know where President-Elect Barack Obama stands on international trade, but the early signs are troubling. In the election, his rhetoric was as protectionist as that of any serious presidential candidate in recent history. Yet he would also from time to time proclaim himself a free trader and his supporters would argue that internationalism is in his blood.

We could, of course, wait until the spring to see what policies the new Obama administration will pursue, but this is the season for poring over hints and clues. In a classic Sherlock Holmes story, the sleuth found an important clue in something that didn't happen--a dog that didn't bark. Perhaps the modern trade equivalent is a lame duck that didn't quack--Congress' failure to pass the Colombia Free Trade Agreement before it adjourned.

Colombia currently enjoys almost complete access to the United States market through the recently renewed Andean Trade Promotion and Drug Eradication Act. Meanwhile, U.S. exporters continue to pay $2 million per day in extra tariffs to access the Colombian market--tariffs that would disappear if Congress were to pass the Colombia FTA.

During the campaign, internationalist supporters of then-Senator Obama quietly argued that his opposition to the agreement was just political expediency and that the agreement would surely be taken up in a lame-duck session after the election. One of the virtues of such a lame-duck approach was that President-Elect Obama could have given tacit approval of the agreement without needing to reverse himself explicitly.

The lame-duck session came and went and the Colombia FTA still languishes. Not only would the new president now need explicitly to reverse himself, but if the agreement is to pass in the near future, it will need to compete against urgent tax and finance measures for scarce floor time in Congress. That seems unlikely.

Proponents of open trade took some heart from the high caliber of President-Elect Obama's initial economic team. Surely such astute economic minds as Tim Geithner, Christina Romer, Larry Summers, and Paul Volker recognize the importance of open markets.

Yet even at the time of their appointment, leading critics of a market approach assured worried supporters that these luminaries have put past apostasies behind them and will bend to President-Elect Obama's will. We needn't look far to see how such a conversion might take place. Rahm Emanuel, the incoming White House Chief of Staff, shepherded NAFTA in the 1990s, but was a leading House figure this last term when Democrats not only blocked a vote on the Colombia FTA, but did so in a way that permanently damaged American negotiating credibility.

It is also noteworthy that the economic team still does not include a trade representative. President-Elect Obama reportedly asked Rep. Xavier Becerra (D., Calif.) to serve as USTR. Rep. Becerra has recanted his previous support for the North American Free Trade Agreement. In House votes, he shared Senator Obama's support of the subsidy-laden 2008 farm bill and his opposition to the Central American Free Trade Agreement. He also worked to undercut trade negotiating authority in the procedural move against Colombia. In turning down the position, Rep. Becerra spoke of the low priority he expected trade to have in the Obama administration. (With Becerra's withdrawal, Obama has reportedly turned to former Dallas Mayor Ron Kirk, whose only significant public stance on trade seems to have been opposition to trade-negotiating authority.)

Might there be consolation in the argument that trade is a peripheral issue in this time of economic tumult? Not according to the numbers. For the last year, U.S. economic growth would have been substantially lower than it was if not for exports outpacing imports. In each of the past four quarters, the contribution of the external sector to growth matched or exceeded government spending as a counterweight to plummeting investment and consumption.

World leaders are well aware of trade's importance. They appear to be reading the same tea leaves for U.S. trade policy and are acting alarmed by what they see. Amidst otherwise futile efforts to take action against the spreading global financial crisis last month, both the G20 meeting in Washington and the APEC meeting in Peru issued explicit calls to resist the temptation of protectionism. Witness also the rush (if a vain one) to try to lock in progress in the troubled Doha trade talks under the World Trade Organization before the new American administration takes power.

The challenge for the Obama administration will be to back away from its campaign promises and rein in the protectionist urges that naturally rise up as an economy turns down. The recovery of the global economy and U.S. leadership will likely depend on the new administration's ability to do so.

Philip I. Levy is a resident scholar at AEI.