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President Barack Obama has fashioned his foreign policy persona around “constructive engagement” with the international community. Apparently, however, the only “engagement” he cares for is diplomatic. Free trade, one of the cornerstones of post-World War II U.S. foreign policy, is conspicuously absent. Indeed, the president’s anti-trade campaign rhetoric, the “Buy America” provision in the stimulus package, and tepid support for reviving the Doha Round of international trade talks have signaled to the world that America is closed for business.
Fundamentally, the Obama administration doesn’t really get free trade and entirely misses its importance to U.S. national security. Free trade isn’t just about economic gains–it is also about reinforcing strategic political and security ties with key allies.
Take the pending U.S.-Colombia and U.S.-Panama Free Trade
Agreements. The Bush administration concluded the agreements in 2006
and early 2007. In exchange for passage (as well as the Peru and South
Korea FTAs), Congressional Democrats demanded the agreements be
renegotiated to include enforceable labor, environment, and investment
and intellectual property provisions.
Apart from the Peru FTA,
Congressional Democrats reneged on their part of this “bipartisan trade
deal.” On the campaign trail, President Obama opposed the Colombia FTA
on grounds of human rights and labor issues, citing violence against
labor leaders. His opposition to the Panama FTA was rooted in similar
labor union generated fretting, and additional concerns that the
country was a tax haven. While U.S. Trade Representative Ron Kirk has
signaled that there may be willingness to move at least the Panama FTA
forward, the administration may seek to again reopen negotiations on
these issues before contemplating further action.
importance of these FTAs extends beyond U.S. economic gains in the
relatively small Colombian and Panamanian markets. Both Colombia and
Panama, as developing countries, already enjoy longstanding
non-reciprocal duty-free access to the U.S. market for over 90% of
their products. And even the opening of both markets to U.S. exports
isn’t going to change anyone’s world. Rather, for Colombia, the FTA
serves to reinforce its status as our closest ally in Latin America and
validates President Alvaro Uribe’s staunch efforts in combating the
illegal drug trade that has too often spilled over into the U.S. And
surely no one needs to be reminded that America has vital strategic
interests in Panama, which controls the Panama Canal. Renegotiating
these agreements to pander to U.S. labor interests is pure
protectionism, particularly in light of the 2007 bipartisan trade deal.
Likewise, the geopolitical importance of the Korean peninsula
makes the Obama administration’s wavering on the U.S.-Korea FTA (KORUS)
all the more perplexing. During his presidential campaign, President
Obama indicated that KORUS was “deeply flawed.” U.S. Trade Rep. Ron
Kirk, during his Senate confirmation hearing, stated that “the
president has said, and I agree, the agreement as it is just simply
isn’t fair. And if we don’t get that right, we’ll be prepared to step
away from that.” After the completion of over three years of intense
negotiations by the Bush administration, the Obama administration has
signaled that it intends to seek renegotiation of KORUS to address
access for U.S. beef and automobiles. Not surprisingly, the South
Korean government has balked, insisting that the deal isn’t open for
The Obama administration is apparently overlooking the fact that
KORUS is crucial to U.S.-Korea relations for reasons beyond market
access. Only last year, pro-American President Lee Myung-bak nearly
faced the collapse of his government over allowing limited access to
U.S. beef. Walking away from KORUS will likely be one of the final
blows to the teetering U.S.-South Korean alliance, a pillar of American
influence in the Pacific. Seoul has been vacillating between China, its
largest trading partner, and America for some years now. Dumping KORUS
will make such decisions easier, and the resulting implications for
Korean partnership against North Korea, on the ground in Afghanistan
and elsewhere are frightening.
To be fair, some of the
objections to the already negotiated agreements are legitimate–in a
perfect world. We want our trading partners to do better on
intellectual property rights, and to allow access to American-made
goods. Environmental and labor demands are more marginal, masked
protectionism for less efficient American markets. Nonetheless, we too
have protected markets that will remain closed to our partners,
frustrating them in turn. The principle behind free trade is to lift
all boats through compromise, not to hold our breath until perfection
President Obama is enjoying his honeymoon at home
and abroad. But if the president succumbs to the protectionist wing of
his party, the honeymoon, our alliances and America’s stake in the
international game will be gone before you can say Smoot Hawley.
Neena Shenai is an adjunct scholar at AEI.
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