Monday, April 20, 2009

Obama administration will not reopen NAFTA negotiations

by M. Ulric Killion

On April 20, 2009, The New York Times reported that the Obama administration announced that there are no present plans to reopen negotiations on the North American Free Trade Agreement (NAFTA). When campaigning for the presidency, then Senator Obama promised his supporters that he would reopen negotiations on NAFTA and revise key provisions such as NAFTA labor and environmental provisions. According to the New York Times:

The president has said we will look at all of our options, but I think they can be addressed without having to reopen the agreement," said Ronald Kirk, the United States trade representative. Mr. Kirk spoke in a conference call with reporters after returning from the Summit of the Americas in Trinidad over the weekend. He said President Obama conferred there with the leaders of Mexico and Canada — the other parties to the free trade agreement — and "they are all of the mind we should look for opportunities to strengthen Nafta.

Obama's announcement signals genuine hope for free and fair trade. The announcement by the Obama's administration also addresses the earlier and critical concerns of Senator John McCain, as concerns the appointment of Ron Kirk as the US trade representative.

During the earlier confirmation hearings, when Kirk announced that he "will chart the right course by looking out for American workers and shining a spotlight on trade violations," there were the critical observations of Senator John McCain that deserve our attention. As the Associated Press reported, "On the other side, Sen. John McCain, R-Ariz., said he was voting for Kirk with some reluctance. Senator McCain said, "that while Kirk supported international trade in a broad sense, he has also made comments suggesting that protectionism might not be so bad after all." Kirk's public comments or statements are problematic for obvious reasons, especially for proponents of free and fair trade.

For instance, Senator McCain "cited Kirk's opposition to a negotiated trade agreement with South Korea and his objections to a pending agreement with Colombia. Kirk has said that a third negotiated trade deal left over from the Bush administration, with Panama, could be ready for a congressional vote soon." Senator McCain also rightly "took aim at a buy American provision in the economic stimulus bill and a provision in a just-passed spending bill killing a NAFTA program allowing Mexican trucks to operate in the United States. Such measures, he said, invite retaliation from trading partners and send a signal to the world that America is going down a path of protectionism."

When campaigning for the US presidency, Obama declared that he would attempt to renegotiation key trade agreements, such as NAFTA, while, allegedly, advising Canadian officials that this would not be the case. In the interim, and in the post-election administration of Obama, the global subprime crisis appears to be promoting protectionist trade policies in the United States and other countries.

It bears mentioning, and constant reiteration, that free and fair trade is good for the US economy, as also true of its key trade agreements such as NAFTA. While many find a variety of reasons (i.e., the war in Iraq) to criticize the former Bush administration, the Bush administration did promote free and fair trade, and this should not be one of the grounds for criticizing the former administration.

Once more it should be reiterated, and perhaps even continuously reiterated, that protectionist trade policies and barriers threaten the future growth and prosperity of a US economy and the world multilateral trade system. Whereas, "Free trade and free trade agreements, on the other hand, produce bi-directional benefits; promote growth and prosperity in U.S.-China trade; promote transparency, fairness and openness in trade regimes across the board; make a positive contribution to strengthening the rule of law; and enhance the national welfare of all nations" (Killion, 2004).

Nonetheless, we should, though after allowing the Obama administration a sufficient period for transition to office, eventually judge the US presidency of Obama and his administration, including Ron Kirk, not by their political rhetoric, but rather by their deeds (i.e., trade policies. Such as how the Obama Administration handles key and sensitive trade-related issues, how they manage the critical and pending finalization (or ratification) of the Korea-US FTA (KORUS FTA), how they handle pending trade agreement (FTA) with Columbis and, especially, how they finally resolve the pending disputes concerning NAFTA.

For now, Senator McCain, as earlier mentioned, rightly observed Kirk's comments on key trade-related issues as problematic. Such as, "Kirk's opposition to a negotiated trade agreement with South Korea and his objections to a pending agreement with Colombia" (AP, 2009). All of this occurring at a time when, "South Korea and the European Union on Tuesday reached a tentative agreement to scrap tariffs on goods traded between them, a deal that, if ratified, would send a strong signal on free trade at a time of rising protectionist tendencies" (Wassenger, 2009).

Concerning the values of the multilateral trading system, as Pascal Lamy (WTO, 2009) explained, "We have recently heard ideas for a Global Economic Charter — an occasion for the international community to re-build a consensus over the basic principles and values that would underlie their economic relations, emulating the founding fathers of the United Nations Charter of 1945." Lamy further observed: "The WTO and its predecessor, the GATT, can provide a source of inspiration in this regard" (WTO, 2009).


Brian Knowlton, In Shit, Obama Doesn't Plan to Reopen Nafta Talks, NY Times, April 20, 2009.
Jim Abrams, Former Dallas Mayor Ron Kirk confirmed as US trade representative, AP, March 18, 2009, (Chicago Tribune).

Killion, M. Ulric. 2004. China's Foreign Currency Regime: The Kagan Thesis and Legalification of the WTO Agreement, 14 Minn. J. Global Trade 43, (Winter).

WTO News: Speeces - DG Pascal Lamy, March 2, 2009. Bettin Wassenger, Tenative Free Trade Deal for S. Korea and Europe, NY Times, March 24, 2009.
South Korea, EU Reach Agreement on FTA, Bernama (Malaysian news agency), March 24, 2009.

© Protected - All Rights Reserved by M. Ulric Killion, 2009.

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