Mr. Sessions and the need to trade
AMID THE WORST economic crisis since the Great Depression, the United States has basically resisted protectionism and maintained its commitment to free and open trade. Alas, recent events in Congress show that the consensus is not invulnerable. Two pillars of U.S. trade law - the 35-year-old Generalized System of Preferences (GSP), which opens the United States to 4,800 products from 131 developing countries, and the 20-year-old Andean Trade Preference Act (ATPA) - are at risk. Congress failed to renew the GSP on Dec. 31 because a single Republican senator, Jeff Sessions (Ala.), won't let it proceed without changes to protect a sleeping-bag maker in his state from foreign competition.
As for ATPA, Democrats won't agree to extend it unless Republicans support renewal of Trade Adjustment Assistance (TAA), an aid program for workers displaced by imports. Republicans, in turn, are balking on TAA to pressure President Obama to accelerate long-stalled free-trade agreements with Colombia and Panama. As matters stand, both TAA and ATPA are set to expire Saturday.
To be sure, the GSP and ATPA have lapsed in the past, only to be restored - albeit at significant expense to the government and private sector. But there's no guarantee that the hiatus would be short and sweet this time, given the economic situation and the polarization in Congress.
There's plenty of blame to go around. At a time of high unemployment, we can certainly understand Mr. Sessions's zeal to preserve local jobs. But the U.S. International Trade Commission has already found that the import threat to the Alabama sleeping-bag maker was not so great as to warrant an exception to the usual GSP rules. Even if Bangladeshi imports did threaten dozens of Alabama jobs, as Mr. Sessions protests, is it right to defend them at the risk of thousands of other jobs that depend on low-cost goods imported through the GSP? If Mr. Sessions wins a legislative break for his constituents, every other senator will want one, undermining the GSP's long-standing insulation from political pressure.
The tug of war between Republicans and Democrats over ATPA could also harm U.S. workers - not to mention key Latin American allies such as Colombia, which is still recovering from devastating floods. But here the fault lies principally with the White House. President Obama has set a goal of doubling U.S. exports by 2015; he recently wrapped up a revised free-trade agreement with South Korea that will soon be submitted to Congress. That's to his credit. But he continues to go slow on the Colombia and Panama deals, deferring to labor union objections despite the agreements' obvious economic merits. If he had long ago signaled a willingness to move those pacts through the new Congress, Republicans would have had no plausible reason, and no opportunity, to use TAA as leverage.
On Wednesday, U.S. Trade Representative Ron Kirk promised to "immediately intensify" efforts to rework the Colombia and Panama agreements by the end of the year, in the same way administration did with the Korea deal. This was more commitment than the administration had previously shown. But with the 2012 election campaign looming, anything short of a pledge to submit them to Congress by mid-year is probably too little, too late. U.S. trade policy is heading for a train wreck of sorts on Capitol Hill, and Mr. Obama needs to help head it off.