Some trade policies go both ways

One of Barack Obama’s great innovations as a campaigner was to have not one but two trade policies. There was the quasi-protectionist, let’s-undo-NAFTA one he offered on the stump to placate the unions and the Huffington-posties that make up an important part of the Democratic base. And then there was the “just kidding, I didn’t really mean that” policy his advisor Austan Goolsbee offered to the Canadians when they started getting nervous about the future of the world’s largest trading relationship. Many campaigns have been two-faced in the past. But Obama deserves extra credit for giving the practice what should be its name going forward: a Goolsbee. It reminds me of the old practice by Czech dissidents when they were prosecuted in show trials by the Soviets. Compelled to confess, they would read the remarks handed to the prosecutors and then say “ozer” which meant, “whatever I just said, I really meant the opposite.”

Listening to USTR nominee Ron Kirk yesterday and reading the Washington Post‘s lead article about the emerging Obama trade policy, I naturally immediately began looking for hints as to which of Obama’s trade policies might actually be implemented.

For the unions there was use of the tried and true code language of placing “social issues” at the center of trade negotiations and of focusing on “enforcement.” For those of us who think protectionism is just the last thing that we need in the middle of a global crisis that has taken a one third bite out of global trade flows, there was the comforting hint of a Goolsbee.The Post‘s Anthony Faiola wrote:

[T]he administration still appears to be toeing a line saying it will move to address the concerns of American workers while also carefully avoiding words and deeds that directly smack of protectionism.” 

Unfortunately, I think Faiola was being a little charitable on that last point. There were after all the “Buy American” provisions in the stimulus. And Kirk and the administration have essentially parroted union positions re: Colombia that the country has not done enough on the issue of violence against labor leaders when in fact, they have done a lot and the real reason Colombia is not progressing is that the country is the stuckee in a deal Democrats on the Hill cut with the AFL-CIO and friends to give them some kind of a trade victory post the Dem takeover of the House. And slow walking Doha and making threatening noises about NAFTA also do seem like words and deeds that smack of protectionism.

That said however, there is another part of this story that shores up my belief that at a core level Obama & Co. may well have their hearts and heads in the right place. Because if you really wanted a trade policy for the 21st century what you would seek is one that helped make American workers more competitive (through education), made American cities more attractive to investment (through enhanced infrastructure), made American companies more competitive (through cutting health care costs) and restored American leadership on the competitiveness issues of tomorrow (through promoting a green energy revolution, for example). And of course, these policies are the centerpieces of Obama’s budget and his vision for America’s future.

There’s more we could do, of course, and a host of new trade issues with which to grapple — from dealing with the subsidy issues associated with all these national stimulus measures to planning for the trade complexities of an era in which some but not all countries have set a price for carbon. (For more good ideas see the excellent op-ed also in the Post from smartest-USTR-ever Charlene Barshefsky.)

But the critical question for an Obama administration that can no longer pull a Goolsbee once it actually starts implementing policies (there are other names for that kind of behavior…schizophrenia is one of them), is which of its policy impulses will it follow? The vision for a more competitive America laid out in the budget speech was very encouraging. In fact, one could argue that it was the boldest set of moves on competitiveness an American president has made in memory. Yesterday’s testimony by Kirk and most of today’s lead article in the Post were more on the unsettling side of the spectrum. And that’s why this is one instance in which I am firmly rooting for the Obama administration to overcome one of its worst potential enemies — the Obama administration.

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