Panama to Signal Obama's Agenda
http://online.wsj.com/article/SB124079102550957773.html
By GREG HITT
WASHINGTON -- President Barack Obama has signaled in recent days a more positive stance toward free trade than he did on the campaign trail, pleasing business groups but courting a backlash among trade-skeptical Democrats in Congress.
An early test of just how much Mr. Obama will push trade in addition to the other issues on his agenda -- like health care, climate change and financial regulation -- will be whether he prods Congress soon to ratify a free-trade agreement with Panama negotiated under the Bush administration.
The White House's newly confirmed trade representative, Ron Kirk, indicated that was under consideration in a speech last week, saying "we believe there is strong bipartisan support for the pending free-trade agreement with Panama." Mr. Kirk also mentioned possibly moving forward with other stalled Bush-era pacts with Colombia and South Korea.
That came a few days after Obama aides suggested the president wouldn't seek to reopen the North American Free Trade Agreement to address concerns about labor and environmental protections.
Mr. Obama had, as a candidate, pledged to renegotiate the deal. And it followed a decision by the Obama administration not to label China a currency manipulator, though Mr. Obama himself had done just that during the campaign. Critics of China say Beijing keeps the value of the yuan artificially low to give their exporters a leg up in the world economy.
After Mr. Obama and congressional Democrats talked tough on trade during the 2008 campaign, business leaders worried about new protectionism out of Washington. Now, some say they are more encouraged.
"If the president could just move the Panama agreement, it would send a signal to the world that we're open for business," Jim Owens, chairman and chief executive of Caterpillar Inc., said in remarks at the Council on Foreign Relations the same day as Mr. Kirk's speech.
But trade skepticism and populist economic sentiments still run high on Capitol Hill. Those sentiments derailed the trade agenda in the final years of the Bush presidency and helped fuel Democratic gains at the polls in the last two elections.
Rep. Mike Michaud (D., Maine) issued a statement after Mr. Kirk's speech denouncing the talk of acting on Panama as "absolutely outrageous and a serious mistake."
Mr. Michaud, a strong critic of U.S. trade policy, suggested Mr. Obama risks alienating voters who are worried about trade and globalization, and dividing Democrats on Capitol Hill. "You're just courting trouble," he said in an interview.
That came as other leaders in Congress have stepped up their campaign for Mr. Obama to stick more closely to his trade promises.
"I am disappointed that the Treasury Department did not cite China as a currency manipulator," Ohio Democratic Sen. Sherrod Brown told a Washington audience last week.
He called on Mr. Obama to convene a blue-ribbon commission to "help create a new path on trade." He added, "The basic premise of redirecting U.S. trade policy is that we must see evidence that our trade model is working before we pass new trade agreements -- whether with Panama, Colombia or South Korea," he said.
Already this year, Mr. Obama has had some small tussles with Congress on trade. Lawmakers tucked into the stimulus legislation a "Buy American" provision requiring preferences for domestic suppliers on government contracts. That has stirred tensions with trade partners, prompting the administration to vow to water down the rules.
Congress attached to a separate spending bill a provision that killed a program that allowed Mexican trucks to transport cargo into the U.S. Mexico responded with tariffs on a list of American exports. The White House has said it was working to resolve the dispute.
The next big test for trade is Panama. Mr. Kirk said last week that the deal wasn't ready yet for a congressional vote, saying, "I'm working to resolve some labor and other issues before we ask Congress to consider it."
Deborah Mesloh, spokeswoman for Mr. Kirk, said the administration is ready to work with Congress to address concerns on the trade agenda.
