In recent weeks, the Obama administration has quietly done an about-face on free trade with Latin America. On April 20, U.S. trade czar Ron Kirk told reporters that President Obama did not think it would be necessary to renegotiate the North American Free Trade Agreement (NAFTA). This marked a reversal from Obama’s campaign pledge to “make sure that we renegotiate” NAFTA. Speaking at the Georgetown University Law Center three days later, Kirk said “there is strong bipartisan support for the pending free trade agreement (FTA) with Panama,” which he is working to complete. Kirk indicated that he is also reviewing the pending free trade agreement with Colombia, in hope of finding “a way forward.” Obama had opposed both of these trade deals during the campaign. Critics may attack the president for flip-flopping on trade, but this is a most welcome flip-flop. Seeking a renegotiation of NAFTA would have poisoned U.S. relations with Canada and Mexico. (Canadian prime minister Stephen Harper applauded Obama’s switcheroo on NAFTA, pronouncing himself “delighted” at the decision.) And rejecting the trade pacts with Panama and Colombia would have been a diplomatic disaster for Obama; indeed, it would have given all Latin countries ample reason to doubt his commitment to the region.
In his opening remarks to the recent Summit of the Americas, Obama called for “a new sense of partnership” in the Western Hemisphere. “I pledge to you that we seek an equal partnership,” he told the assembled Latin American and Caribbean officials. “There is no senior partner and junior partner in our relations; there is simply engagement based on mutual respect and common interests and shared values.” It is hard to square those comments with opposition to hemispheric trade liberalization. Obama must realize this, despite what he said on the campaign trail. Unfortunately, congressional Democrats are deeply hostile to free trade. Moving forward with the Panama and Colombia FTAs would be “absolutely outrageous and a serious mistake,” declares Congressman Mike Michaud, a Maine Democrat and cofounder of the House Trade Working Group. Many Democratic lawmakers are concerned that Panama has become a tax haven, and they want the Panamanian government to sign a tax information exchange agreement before the FTA goes through. The tax fight certainly poses an obstacle to FTA ratification, but U.S. officials should be able to overcome it.
