American Trade Policy Stuck in Neutral

For a president who vowed to double exports in five years, you have to wonder why President Obama has been unable to make any progress in expanding U.S. trade.

This week, Obama met with Mexican President Enrique Pena Nieto and Canadian Prime Minister Stephen Harper to reaffirm their support for the North American Free Trade Agreement (NAFTA), which the Council on Foreign Relations (CFR) estimates has grown the U.S. economy from roughly $290 billion in 1993 to more than $1.1 trillion in 2012.

Today, according to the CFR, the United States trades more in goods and services with Mexico and Canada than it does with Japan, South Korea, Brazil, Russia, India and China combined.

So it would make all kinds of economic sense for the United States to support NAFTA. Except if you are in the Obama administration. They continue to stall the Keystone XL Pipeline, which would create thousands of U.S. jobs while helping Canada export oil from Alberta, which has no direct path to U.S. refineries.

Obama can’t blame it on the Republicans, because the Democrats are putting all kinds of barriers in the way.

As this nation’s interests are served by expanding free-trade agreements, Democratic leaders such as Sen. Harry Reid of Nevada and Rep. Nancy Pelosi of California are fighting Obama over granting him Trade Promotion Authority (TPA), which would allow Congress to approve trade agreements with just an up or down vote without amendments or a filibuster.

This is known as “fast tracking” and is critical if the United States is to have a role in the Trans-Pacific Partnership (TTP), which would link the NAFTA countries with 11 Pacific Rim countries.

The United States has also agreed to launch negotiations with the European Union to establish a Transatlantic Trade and Investment Partnership (TTIP), a free-trade area between the world’s two largest trading partners.

America needs these agreements to get passed, as growing trade deficits have eliminated millions of U.S. manufacturing jobs and represents a substantial threat to the recovery of the U.S. economy.

Without the right government infrastructure to support our exporters, the United States is losing about 2 million good-paying jobs each year.
We simply can’t let our global trade program be held hostage because some members of Congress don’t want to vote on anything until after the mid-term elections.

This begs the questions whether our trade program needs a complete overhaul. It’s too unwieldy and is clearly not working.

That’s why in my book, Conscientious Equity, I call for the creation of the Department of Global Commerce, which would be headed by a secretary of global commerce who has extensive experience in international business. Then we must give this department the ultimate power in making trade policy recommendations to the president. All agencies focused today on commerce and trade would be consolidated into the Department of Global Commerce. At last count we have 21 federal agencies with overlapping responsibilities. We have a convoluted and bloated mess of fiefdoms that is not working.

This idea gained traction when a couple of years ago, after reading the chapter in my book relating to this reorganization concept, the White House Government Reorganization Team reached out to me for my recommendations.

Unfortunately, it has been relegated to the back burner, where most trade decisions are gathering dust.

America must send a message to the world that this nation is open for business.

To give you a feel for how important free-trade agreements are to our economy, with the recent passing of the South Korea free-trade agreement, the expected result is U.S. exports to South Korea will grow by as much as $11 billion and support a minimum of 70,000 new U.S. jobs. The trade pact with Colombia will increase U.S. exports to that country, now $12 billion a year, by $1 billion annually. Panama’s imports from the United States exceed its exports to the United States by a ratio of 10 to one. Currently the U.S. exports $4.9 billion in goods and services to Pan┬Čama. This number will certainly grow.

There’s an old negotiating expression: “never leave money on the table.” Yet, that’s what America does each day that we fail to pass free-trade agreements or strengthen ties with our trading partners.

This administration continues to confound conventional thinking. Our two biggest challenges are growing our economy and putting people to work. A robust and supported trade program does both.

It’s time to get our trade policy out of neutral and turn on the turbo thrusters. That’s how America wins the race.

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