A time for free trade
TRADE IS ONE ISSUE on which the Congress elected on Tuesday is potentially an improvement over its predecessor. The Democratic majority in the House was heavily influenced by organized labor and hostile to trade. It let presidential "fast track" authority to negotiate tariff-slashing agreements with friendly nations expire. Democrats also denounced free-trade pacts with South Korea, Colombia and Panama left over from President George W. Bush's administration and still unratified. Taking his cue from the House, President Obama, who had waffled on trade throughout the 2008 campaign, declined to submit any of the deals for legislative approval, insisting that he had to negotiate improvements first. During the just-concluded campaign, Democrats and their allies launched an avalanche of simplistic ads attacking "outsourcing."
Now that the Republicans are in the majority, all three trade agreements have better prospects - good news for the American companies and workers who would benefit from expanded exports, and for the American consumers who would benefit from more choices in the marketplace. The likely next chairman of the House Ways and Means Committee, Rep. Dave Camp (R-Mich.), is a self-described "free-trader," as is the incoming chairman of the Ways and Means trade subcommittee, Rep. Kevin Brady (R-Tex.). To be sure, the nationalistic rhetoric of the Tea Party raises questions about how its members might affect the Republican caucus's position. But the fact that former Bush administration trade negotiator Rob Portman easily won the race for U.S. Senate in Ohio suggests that anti-trade animus has a more limited audience than is commonly believed.
Trade, in short, may offer that rare policy area in which prospects for bipartisan cooperation improved on Nov. 2. Mr. Obama would be wise to take advantage of that fact. Even before the election, he had been moving, gingerly, in a pro-trade direction. He called for a doubling of U.S. exports by 2015 and pledged to finalize revisions to the South Korea trade deal in time for this week's G-20 meeting in Seoul. The South Korea pact would slash tariffs on a wide range of U.S. exports to that country and enjoys the backing of the vast majority of U.S. firms but has been criticized in Congress for allegedly failing to open the Korean market sufficiently to U.S. autos and beef.
Those criticisms are, in our view, overblown. Also, it's asking a lot of the Koreans to renegotiate what they had reasonably considered a done deal - especially at a time when the U.S. Federal Reserve's cheap dollar policy is already helping U.S. exports and harming Korean ones. Still, if changes to the most sensitive parts of the deal are the price of eventual congressional ratification, Mr. Obama should pursue them in good faith, as he appears to be doing, and Korea should meet him half way. At stake is not only economic growth, but also the strategic balance in Asia. As China rises, this agreement would help keep the peace by binding two long-time democratic allies closer. Similar arguments apply to stalled agreements with two U.S. allies in Latin America, Colombia and Panama. The finalization and swift congressional approval of all three pacts should be among Mr. Obama's highest priorities for 2011.