There seems to be a renewed focus on global trade policy and particularly with nations across the Pacific by the United States. At the recent APEC meeting the U.S. forcefully backed the Trans-Pacific Partnership. President Obama has declared the 21st century to be the Pacific century.
The U.S. backs the trade liberalization proposed by the ASEAN nations. The U.S has been instrumental in fostering Russia’s accession to the WTO next month. Congress recently approved three bilateral trade agreements with Colombia, Panama and South Korea.
Is this good for global trade? The answer is “Yes.” The development of regional trade arrangements if done properly means more trade. The inclusion of the largest country still outside of the WTO makes the WTO more multilateral and relevant. The ratification of the bilateral trade agreements will increase U.S. trade with both East Asia and Latin America.
The question then becomes what is the impact of these trade actions on domestic politics within the U.S. during this presidential election cycle? Probably not much.
Certainly President Obama’s policies toward China need to reflect the increasing China-bashing in the United States. Thus, his public statements on the valuation of the Yuan and protection of intellectual property rights at the recent APEC meeting. He needs to balance these issues with the need for more U.S. exports to China and other trade and non-trade issues. He is highly concerned about balancing strategic and national security issues with the need for U.S. global competitiveness.
More of the same can be expected at the forthcoming ASEAN summit. There will be more discussion of establishing a sustainable regional architecture, playing by the trade rules, and more cooperation in settling disputes. President Obama is clearly concerned about peacefully managing the various aspects of this most important bilateral relationship and encouraging greater Chinese investment into the United States. But still the domestic outcry in the U.S. is for jobs.
It is clear that the overwhelming interest in the U.S. electorate is jobs. These trade developments may have long-term implications, increase some trade and investment flows, but they have no immediate impact on unemployment. This is the central problem confronting President Obama.
Still these developments are good for the U.S., global trade, and global trade governance. They send a message that the U.S. administration is still an active participant in the global trading system, even thought there is strife between the political parties and within the political parties in the United States.