Asia Summit Awaits Word on Obama Trade Policy Promised in May

Nov. 13 (Bloomberg) -- President Barack Obama would press for new trade accords only after he set out his approach to international commerce in a speech, U.S. officials said in May. Six months later, trading partners are still waiting.

“There is deep frustration at the lack of any trade policy,” said Troy Stangarone, director of congressional affairs at the Korea Economic Institute in Washington, a public policy research group funded mostly by the South Korean government.

Trade will be a focus of Obama’s eight-day trip to Asia, beginning today in Japan. He will also attend the Asia-Pacific Economic Cooperation summit in Singapore and make visits to Shanghai, Beijing and Seoul.

The region’s leaders are impatient for a clear U.S. approach to trade, said C. Fred Bergsten, director of the Peterson Institute for International Economics in Washington.

Governments “are hoping that Obama’s trip will begin the process of re-engaging Asia on trade,” Bergsten, who met with South Korea’s President Lee Myung Bak recently, said in an interview. “Trade is very high on their diplomatic agenda.”

Obama inherited bilateral trade accords with Colombia, Panama and South Korea that President George W. Bush completed and Congress never approved. Bush also started the Doha Round of negotiations in the World Trade Organization, which remain unfinished, and said the U.S. would like to join a trade agreement among Singapore, New Zealand, Chile and Brunei.

During his presidential campaign, Obama criticized the pending trade deals with Colombia and South Korea. As president, he sided with the United Steelworkers union, imposing duties of 35 percent on automobile tire imports from China in September. He also joined the leaders of the Group of Eight countries in promising to “keep markets open” and “reject protectionism of any kind.”

‘Set a Balance’

Everett Eissenstat, a career official in the U.S. Trade Representative’s office, told a Senate panel in May that Obama wouldn’t press for new agreements until he could give a speech defining his trade agenda and how it fit into his other priorities.

The accords have remained in limbo since then, business executives, overseas governments and some lawmakers from Obama’s party have said.

“For the past 10 months, the United States has lacked a comprehensive trade agenda,” Senate Finance Committee Chairman Max Baucus, a Montana Democrat, said Nov. 10. “That absence is palpable.”

Enforcement, Transparency

“Obama laid out a trade agenda in March 2009, and it set out a balance of job-creating market access openings, enforcement, transparency and other policy priorities,” Deborah Mesloh, a spokeswoman for the U.S. Trade Representative, said in e-mailed statement. “On pending free trade agreements, we continue our consultation with stakeholders and Congress to understand concerns and to develop proposals for addressing these concerns.”

Obama, in a meeting with his Economic Recovery Advisory Board on Nov. 2, said the U.S. had a “debilitating gridlock of trade policy,” which made it by turns too open or too timid.

The president will use his Asia trip to provide more details about how he plans to use trade policy to boost exports to Asia, according to a senior administration official who declined to be identified discussing the president’s intentions.

Obama’s position on trade is “a constant question,” said Christopher Wenk, the U.S. Chamber of Commerce’s director for trade.

Executives in Geneva

Wenk said that during a trade trip with executives from Citigroup Inc., Ford Motor Co. and General Electric Co. to meet World Trade Organization officials in Geneva, his group was peppered with inquiries about U.S. intentions.

“Have you got any indication from the Obama administration as to what their trade policy may be?” Clare Thorpe, Ireland’s agriculture attaché in Washington asked a European Union trade representative at a public forum Oct. 26.

Canadian officials are trying to find out if the U.S. will let Canadian-based companies compete for stimulus projects, an irritant since Obama signed that measure in February, said Birgit Matthiesen, the Washington-based adviser to the Canadian Manufacturers & Exporters association.

The administration is lacking two of three deputy trade representatives, and the top trade official at the Commerce Department, as those nominees haven’t been confirmed by the Senate.

“They don’t have their people in place yet,” Wenk said.

By this time in their term, the past two presidents had embraced trade initiatives.

Congressional Approval

Bush won congressional approval for a trade deal with Jordan and was days away from launching the Doha Round at this point in 2001. President Bill Clinton was in the final lobbying push to get lawmakers to approve the North American Free Trade Agreement, which passed the House on Nov. 17, 1993.

No similar action is likely during Obama’s first year, in part because the economy and health-care legislation have dominated his attention, Stangarone, of the Korea Economic Institute, said in an interview.

There are economic costs to delay, said Tom Donohue, president of the Washington-based U.S. Chamber of Commerce, the nation’s largest business organization.

“We are standing on the sidelines while Asian nations clinch new trade deals,” Donohue said in a statement before leaving to attend the APEC trade meetings. “We’ll pay the price if this continues. It’s time to see action from Washington.”