The bad news is that President Obama is keeping his campaign promises to raise taxes on upper-income families, borrow-and-spend, bail out auto-company dinosaurs in an attempt to ensure their survival, take over the health care system, and otherwise pursue an agenda that it is an understatement to describe as ambitious.
The good news is that President Obama is not keeping all of his campaign promises. There has been no precipitous withdrawal from Iraq, Guantanamo remains the home of terrorists and is likely to do so for some time, the new “transparency” is not so all-encompassing as to include pictures of the treatment accorded the bad guys we managed to capture, and we have not lurched into protectionism. His disappointed liberal supporters are muttering about “Bush 2.0” according to the Financial Times.
Recall that during his run for the White House Obama promised to adopt a trade policy that “serves the interests not just of multinational corporations but of America’s hardworking families.”
He opposed the trade agreements with Korea and Colombia, accused the Bush administration of failing to deal with China’s “manipulation” of its currency, and threatened to use “the hammer of a potential opt-out” to force Mexico and Canada to renegotiate the North American Free Trade Agreement (NAFTA).
Campaigning is one thing; governing is another. Seated in the Oval Office, “Obama is subject to the same geopolitical imperatives as was President Bush,” says Rod Hunter, who served as Senior Director of the National Security Council and is now a colleague of mine at the Hudson Institute, a Washington think tank.
It is one thing to throw raw meat to the trade union lions during a campaign, quite another to antagonize Canada, which has troops in Afghanistan to supplement our own; Mexico, which is an ally in the war on drugs and a potential source of oil supplies; South Korea, important to our efforts to contain its Northern neighbor, and other countries.
So we have the new Obama. NAFTA stays, as is; Treasury Secretary Tim Geithner has not repeated, his charge that China manipulates its currency; and the President has announced “a plan of action” to obtain congressional approval for pending free trade agreements with Panama and South Korea, and is in conversations with Colombia’s President, Álvaro Uribe, about getting the agreement with his country through a very reluctant Congress.
Obama has found that he also favors “ a strong market-opening agreement for agriculture, industrial goods and services through the Doha development round [of negotiations at the World Trade Organization] and through other negotiations.”
Add to that the repeated statements by the President’s U.S. Trade Representative Ron Kirk, who has been telling anyone in Washington who will listen that trade plays “an important role … in creating and sustaining better-paying jobs here at home.”
Specifically, Kirk wants to expand trade with the Asia-Pacific region because “there is an extraordinary upside to us” in doing so.
“It is reassuring that President Obama’s trade agenda appears to be aligning closer to those of Presidents Bush and Clinton — and to their nine predecessors — than to the protectionist positions he took on the campaign trail,” Theodore Kassinger, former Deputy Commerce Secretary and now a lawyer with O‘Melveny & Meyers here in Washington, tells me.
But before awarding the President the Adam Smith Award For Combating Protectionism, consider this. Obama’s first priority is his agenda: “reform” health care, restructure the energy industries, involve the federal government more deeply in education, fight the recession, save the auto companies, control bankers’ bonuses, revise the regulatory rules that govern the financial sector, and win what is now his war in Afghanistan. Trade is lower down on the list.
Worse still, there are signs that the President is willing to allow the state politicians in charge of disbursing stimulus funds to adopt rigid “buy American” practices, even though the stimulus bill restricts such practices to those that do not violate our trade agreements or World Trade Organization rules.
There are also subtle indications that the President will not fight to prevent protectionist measures from creeping into apparently unrelated legislation. Banks receiving bail-out money are chafing under rules that prevent them from hiring talented foreign workers.
And Toyota and other foreign firms that make cars here in America are in effect discriminated against by the government’s decision to keep GM and Chrysler from meeting the fate to which a competitive market would consign them.
So only two cheers for President Obama, less of a protectionist than the candidate bearing the same name.
Examiner columnist Irwin M. Stelzer is a senior fellow and director of the Hudson Institute’s Center for Economic Studies.
