"The business of Asia is business"
Nov 13, 2009 -
"It is really important to understand just how badly the U.S. is screwing itself on trade." This blunt assessment comes from Fred Bergsten, a long-time observer and director of the Peterson Institute for International Economics, as President Obama lands in Asia. I share Fred's frustration and more.
Hopefully President's Obama trip will be a wake-up call. At every Asian stop, the President will hear about trade. After all, "the business of Asia is business," (Financial Times op-ed, "America risks being left behind in Asia.") The region, accounting for half the world's economy, has aggressively pursued regional economic integration. The U.S. Chamber of Commerce tallies 168 trade agreements in force in Asia. The U.S. is a party to a measly two (Singapore, Australia). Funny, the Administration likes to point to the President's "Pacific orientation."
The U.S. could get into the Asian game big-time by moving the stalled U.S.-South Korea free trade agreement. The agreement would drop taxes on 95 percent of goods, boosting U.S. exports to Korea by $10 billion annually. Faced with double-digit unemployment at home, the President could seize on this "jobs program." No such luck. Today, his Commerce Secretary told a Singapore audience that "trade agreements are going to have to wait." The South Korean trade minister responded, "It's been over two years. If it's a responsible government, it should take the next step..." In Asia's very diplomatic parlance, that's a bold rebuke.
South Korea is moving on. The E.U. has opportunistically moved in, signing almost the exact same agreement with South Korea that is sitting on Obama's desk. U.S. goods will soon get taxed more than the same European goods in South Korea. Guess which get bought? With the U.S. sidelined, China is working overtime. It recently signed a free trade pact with the 10-member Southeast Asian block of countries.
This isn't to say that moving trade agreements through the Congress is easy. They always require strong White House leadership. President Obama recently lamented the "debilitating gridlock" in U.S. trade policy. Mr. President, where there's a will, there's a way.