As President for the past 3 years and 9 months (as of September, 2012), President Obama leaves a track record that allows interested observers to assess his accomplishments on trade and what his trade policy will be if he is re-elected. As required by law and following the practice of his predecessors, since 2009 the Obama Administration has made public an annual document which reports on accomplishments for the previous year and outlines the trade agenda for the current year. The annual State of the Union address is another vehicle where the President outlines his trade policy agenda and goals.
These documents indicate that trade has not assumed the most prominent role in the Obama Administration. The 2011 Report on Trade and 2012 Trade Policy Agenda highlights the following issues of particular relevance to small businesses:
- Expanding market access through trade agreements
- Enforcing trade rules in favor of US businesses
- Expanding exports through an SME Initiative and the National Export Initiative
Expanding Market Access
Increasing market access through trade agreements is touted as one of the pillars of the Administration’s policy. At the same time, the Obama Administration has not completed negotiations on or signed any trade agreements. The last U.S. trade agreements were negotiated with Columbia, Korea, and Panama by the Bush Administration. The Obama Administration can take some credit for having worked to resolve the various issues that kept these agreements in Congress for several years until they were signed into law in 2011
We can also assess the Administration to see how quickly and thoroughly it moves to implement and administer the Agreements:
The US-Korea Free Trade Agreement has been in effect as of March, 2012.
The U.S.-Columbia Trade Promotion Agreement took effect in May 2012.
Tools on the website of the Office of the U.S. Trade Representative (USTR) have been made available to help businesses to understand and access the benefits of these and other free trade agreement (FTAs).
The agreement with Panama has not yet taken effect.
Negotiating a Trans-Pacific Partnership (TPP) Agreement
The Obama Administration has inherited and continued the negotiations to create a Trans-Pacific Partnership (TPP) agreement among ten (10) countries in south-east Asia, Australia, New Zealand, and the Pacific Islands. For the United States, this effort began in 2008 when the Bush Administration decided to join the negotiations already in progress. U.S. leadership remains key to this process. Other U.S. partners — notably Canada, Japan, Mexico and Vietnam with which the United States has existing FTAs — have expressed interest in joining the TPP negotiations. China is notably absent. A successfully-negotiated TPP could create one of the world’s largest trading bloc outside of the World Trade Organisation (WTO). However, just like the WTO Doha Round, negotiations are stalled on the differences that inevitably develop from trying to agree on trade rules that can be applied equitably to developed and developing countries. In sum, these are complicated negotiations which are unlikely to produce results any time soon.
World Trade Organization (WTO) Negotiations & Russian Accession
Speaking of the WTO Doha negotiation, the trade policy document pledges the support of the Obama Administration to reviving the WTO negotiating process. This is really an admission of just how stuck the WTO Doha negotiations are. Irrespective of the name of the U.S. President in 2013, we should not expect progress any time soon in the WTO negotiations.
Unfortunately, in this area as well the Administration’s policy is being held hostage to Congressional inactivity. On August 22, 2012, the Russian Federation joined the WTO, in effect opening up its economy to imports from all WTO members and to WTO rules. However, US businesses are currently unable to take advantage of the improved access to the Russian market. Included on the list of items left unresolved so far by the U.S. Congress is repeal of the Jackson-Vanik amendment which denies Russia “permanent normal trade relations” (PNTR) with the United States. As long as this law remains valid, the United States is violating its obligation to give PNTR to all other WTO members, in turn making it ineligible to receive the concessions that Russia has granted to all WTO members. U.S. Congress has so far ignored the calls by the Obama Administration to repeal Jackson-Vanik and grant PNTR to Russia.
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