Dallying Democrats Should Outsource Trade Office

June 23 (Bloomberg) — President Barack Obama is desperate for budget savings, so desperate that no cut seems too small. He's even mentioned saving $632,000 by shutting a post no one knew existed, the Paris office of the U.S. Education Department.

So far, though, the president has failed to mention one budget cut that could save a good $45 million: eliminating the job of U.S. trade representative.

The idea sounds perverse. Trade can strengthen recoveries, and the current trade representative, Ron Kirk, has been known as a skilled trade hand since his days as Dallas mayor.

Kirk's staff — 220 or so full-timers — is among the hardest-working, brightest and most dedicated in Washington. They have negotiated bilateral agreements with a number of nations in recent years, among them Colombia, Panama and South Korea. Given that tighter trade ties will make it easier to keep the countries out of the grip of dictators like Hugo Chavez of Venezuela, the trade representative could be crucial.

But for that person to succeed, Congress has to endorse the agreements the executive branch negotiates. And since 2006 the protectionist wing of the Democratic Party has blocked most of those agreements.

Even worse, since 2007, the White House hasn't had trade promotion authority, or so-called "fast track" power — the ability to force Congress to vote yes or no on trade legislation without squabbles over amendments.

Unmade Mind

As a lame-duck president, George W. Bush couldn't persuade the opposition Democrats to renew his fast-track authority (or to do much else, for that matter). Obama's problem is different: He hasn't made up his mind how hard he wants to push for free trade, and under what conditions. He has yet to ask for fast-track.

So presidential trade emissaries — be it Kirk or Susan Schwab, his predecessor under Bush — find themselves doing something worse than nothing. They are teaching other nations cynicism by perpetually promising them something, then not delivering.

Next week, Colombian President Alvaro Uribe will call on Obama in the hopes of getting him and Kirk to persuade Congress to sign off on a trade agreement that his country endorsed years ago. This isn't Uribe's first visit to Washington in pursuit of the accord, or even his second or third. Yet he is still likely to come away empty-handed.

Then there's Panama. The U.S. trade representative's office began romancing Panama in Bush's first term, offering a bilateral agreement as a kind of reward for the long way that nation has come since the days of Manuel Noriega and the U.S. invasion.

Panama's Wait

Panama did its part in July 2007, approving the trade agreement it had reached with the U.S. just weeks earlier. Then it was the U.S. Congress's turn. Representative Sander Levin of Michigan, Democrat and chairman of the House Ways and Means subcommittee on trade, wasn't enthusiastic. Neither were House Speaker Nancy Pelosi or Senate Majority Leader Harry Reid.

For a while, our lawmakers had an excuse for dallying: Panama elected, as president of its National Assembly, Pedro Miguel Gonzalez, a man indicted on charges of killing a U.S. serviceman 15 years ago. Even though Gonzalez left office in September, advocates of trade with Panama still don't have enough support in Congress.

With the election of Obama, Panama (and the U.S. trade representative staff) might see reason for hope. An undivided Washington, all Democratic, may be able to act faster. Obama fortified that hope when he talked about ratification for Panama as early as this summer.

Enter Taxes

Again, disappointment followed. This time it wasn't Sander Levin, but his brother, Democratic Senator Carl Levin of Michigan, objecting to the bilateral agreement. And this time, there were other grounds — that Panama was too much of a tax haven. "A tax information exchange is the least of what we should get before the free-trade agreement," Levin e-mailed the press.

With each delay, the "special bonds of friendship and cooperation" mentioned in the treaty become less of a promise and more of a lie.

Then there is South Korea's trade agreement with the U.S. This one Kirk publicly dismissed, saying in his confirmation hearings that the deal "just simply isn't fair." You have to believe that that line wasn't his own, but was handed to him by his ambivalent boss. Obama, for his part, said last week that there are "barriers" to a trade agreement with South Korea, including issues related to U.S. beef and Korean automobiles.

Small Focus

So what's left for a trade rep to do? Little things. Kirk can remind Obama that progress on the Doha Round of global trade negotiations is stuck. He can press the president to make sure other nations cease the most egregious abuses of extant commitments, such as getting China to make safer transformers and India to stop ripping off new drugs before their patent is even dry.

Kirk can immerse himself in minutiae, examining the labels of products certified as Canada Organic Biologique. Or hold Uribe's hand some more next week. Or make friends with Panama's new president, to be inaugurated July 1.

But until the U.S. president makes up his mind and Congress sees the light on trade, the trade representative will have only a bit more influence than that education attache in Paris.

Neurosis over trade is always expensive, but especially during an economic crisis. At a time when the government can't afford to fulfill its tasks, why continue to fund an office that has none?

(Amity Shlaes, author of "The Forgotten Man: A New History of the Great Depression" is a Bloomberg News columnist. The opinions expressed are her own.)

© Copyright 2009 Bloomberg

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