Economy & Trade, Headlines, North America

TRADE: New U.S. Trade Czar Faces Tests at Home and Abroad

Emad Mekay

WASHINGTON, May 10 2005 (IPS) - U.S. Trade Representative Rob Portman, now in his second week on the job, faces numerous challenges as he seeks to build support at home and abroad for an ambitious U.S. trade agenda, observers say.

Portman, who succeeded Robert Zoellick as top U.S. trade negotiator Apr. 29, has hit the ground running. Last week he traveled to Paris, where leading industrialised and developing countries reached agreement on calculating agricultural tariffs, a contentious issue over which wider free-trade talks had become bogged down.

Still ahead lie numerous meetings to set multilateral trade talks in motion within the World Trade Organisation (WTO). Trade experts said this remains a tough issue and a top priority for Portman, a former Republican Congressman from the key electoral state of Ohio.

WTO negotiations are entering a critical phase in the lead up to the body’s next ministerial meeting, scheduled for December in Hong Kong.

Portman has vowed to pursue ”an aggressive agenda” with a focus on opening new markets, enforcing trade agreements, enforcing U.S. trade laws, and spreading economic freedom.

A large part of his job will be to convince members of Congress that trade deals with other countries will not harm their constituents – and especially not U.S. farmers and their families.

An early test of his abilities to assuage domestic politicians will involve overcoming congressional opposition to the newly negotiated Central American-Dominican Republic Free Trade Agreement (CAFTA-DR), which would govern trade between the United States, Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua, and the Dominican Republic.

President George W. Bush was scheduled to discuss the regional trade pact with his six counterpart presidents on Thursday.

”Now beyond the WTO, from our side, the new USTR (U.S. trade representative) will have to think about the immediate discussions with our Central American partners,” said Erik Peterson, an expert on international trade at the Washington-based Centre for Strategic and International Studies. ”He’ll have to look at a range of bilateral discussions as well. So he’ll have his hands full.”

Numerous political observers have said that CAFTA-DR is in trouble in Congress, especially in the House of Representatives where Democratic opponents have been joined by Republican lawmakers from sugar- and textile-producing districts.

A number of Democrats have said the administration needs to show greater efforts to enforce current trade agreements before Congress will approve new ones, especially in light of soaring trade deficits.

Even so, veteran trade analysts said Portman might yet win some converts on Capitol Hill.

”Portman is much more skilled at navigating the U.S. Congress,” said Ben Lilliston, communications director at Institute for Agriculture and Trade Policy (IATP), a trade think tank. ”Zoellick was much more skilled in the international arena.”

”There is some speculation that Portman was chosen largely to help navigate CAFTA-DR through Congress – and then, if the Bush administration can gain passage, the FTAA (Free Trade Area of the Americas). We think that is a fair assumption,” he added.

If agreed and implemented, the FTAA would create a common market for more than 30 countries in the Western hemisphere.

Portman also faces pressure at home over the soaring trade deficit with China. Lawmakers have complained that China’s manufacturing subsidies amount to unfair trade practices that harm U.S. workers, that its agricultural and services sectors remain to difficult for foreigners to enter, and that violations of intellectual property rights remain commonplace.

Portman, during hearings preceding his confirmation as U.S. trade representative, said he would take up these issues.

”Almost by definition, dealing with China will be at the top of any USTR list,” said Peterson. ”The growing bilateral trade imbalance, the big trade deficit that this country faces in its trade ties with China right now, clearly means that our trade leaders will need to be focused on relations with Beijing.”

Also on Portman’s docket is the Middle East Free Trade Agreement (MEFTA), with more small nations in the region showing interest in sealing a pact with Washington. MEFTA, as designed by Washington, could cover 22 Arab countries, Israel, and the United States.

Even as Portman pursues new trade deals, he will have to contend with demands from activists and developing countries that Washington stop dumping cheap artificially cheap agricultural surpluses on world markets and comply with a recent WTO ruling against U.S. cotton subsidies.

After Portman’s confirmation, international charity Oxfam sent him a letter urging him to stress fair trade, not just free trade.

Portman was among 24 members of Congress described as ”free traders” in a report last month from Cato Institute, a pro-free trade think tank.

”Portman is a conventional, pro-trade Republican,” said Daniel Griswold, Cato’s director of trade policy studies. ”He has voted in favor of trade on all the major bills: NAFTA, the Uruguay Round Agreements Act, trade promotion authority, normal trade relations with China, and all the recent bilateral agreements.”

Even so, IATP’s Lilliston said he hoped Portman would bring to the job more than just a change of style.

”The most important advice I could give him would be to ask a simple question with each trade deal he negotiates: Does it benefit people?” said Lilliston. ”Right now, the emphasis is clearly on setting up rules that benefit multinational corporations, and it is failing workers and farmers around the world.”