Light at the End of the Midterm: More Free Trade Ahead?

Nearly one week after the Democrats suffered the biggest House defeat since the 1938 midterms, President Barack Obama has headed to Asia with an entourage of 500 people, mostly business executives, to participate in the G20 summit. Several issues will be addressed, including cooperation on defense, nuclear issues and education. But, the major purpose of the trip is to promote a policy to which the Obama administration has not paid much attention: free trade.The timing is significant. Despite its weakened economic state, Americans have never been more opposed to free trade than now. According to a September NBC News/Wall Street Journal poll, 69 percent of Americans believe free trade agreements with other countries have cost jobs in the United States, while 53 percent see free trade agreements in general as being harmful for the country.According to the same poll, 65 percent of union members and 61 percent of right-leaning Tea Party sympathizers believe free trade has hurt the U.S. With this kind of broad skepticism across the political spectrum, it may come as no surprise that both parties ran ads against free trade during this midterm cycle. Most of these ads attacked China, like those of Zack Space, a Democrat congressman from Ohio who accused his opponent of favoring policies that send U.S. jobs to China, and Spike Maynard, a Republican challenger in West Virginia, who accused his opponent of favoring free trade with the country. Who can forget the infamous “China’s going to take us over” ad by the non-partisan, conservative group Citizens Against Government Waste?Perhaps reflecting the national sentiment, the White House has shown no clear interest in liberalizing trade policy. The Obama administration has not even sought fast-track negotiating authority (also known as Trade Promotion Authority), a tool granting authority to the Executive branch to negotiate and write trade agreements without the consent of Congress. This instrument has been cherished by U.S. presidents for the past 30 years.Even the current U.S. Trade Representative (USTR), Ron Kirk, has poorly advocated for free-trade generally conceding to labor unions and their Democratic allies by erecting tariff and non-tariff barriers, such as the imposition of a tariff on Chinese tires in 2009 and the hinting at the possibility of more trade protection to the U.S. steel industry this year. Without strong free trade sentiment in Congress, there has been little push for any of the trade agreements that are currently pending, such as those with South Korea, Panama and Colombia.The agreement with Korea, for example, has been pending since 2007 due to heated opposition from U.S. automakers. They claimed the deal would not open the Korean auto market to U.S. products. However, at the same time the U.S. auto industry hangs with all their might to their own 25 percent import tax on SUVs and other light trucks coming from South Korea.Though Obama campaigned on an anti-free-trade platform, in the wake of a significant midterm loss the President will be touting free trade – something most congressional Democrats oppose – during his trip to Asia. Why the change in policy direction?The South Korean trade agreement holds part of the answer. In March of this year, a Korean ship, the Cheonan, was sunk by a North Korean torpedo, killing 46 sailors. Suddenly, trade relations with South Korea became an important foreign policy matter, to help demonstrate U.S. support for South Korea. In June, Obama declared that the U.S. would delay its handover of wartime control of South Korean forces to South Korea by three years, till 2015. In a further show of support, he also stated that he would lobby the U.S. Congress to ratify the trade agreement. Over one hundred House members were furious with the President’s declaration and warned that the agreement would not be signed without significant rewritings to certain sections, including investment policy, labor and environmental standards.The chances of passing the Korean free trade agreement will be higher in the new Congress, since Republicans are historically more favorable towards trade. But free trade is unpopular among Democrats and Tea Party activists, an important and vocal GOP constituency, so it is unclear if this legislation would face a tough battle on Capitol Hill. If passage of this agreement is important for the administration, this could be a chance for Secretary of State Hillary Clinton to lead Obama to a major congressional victory. Despite being an anti-free-trader, Secretary Clinton could pressure Congress to ratify the agreement by escalating it to a national security issue.It is still too soon to tell what direction this administration will take regarding trade, but something about this trip that seems to signal a directional change for free trade agreements. Pushing the South Korea agreement toward ratification would send a positive signal to all of Asia, and probably the rest of the world, that the United States is ready to engage in trade once again. This image is being used under Creative Commons licensing. The original source can be found here.