Rebuilding the Foundation for U.S. Trade Policy

Congressman Xavier Becerra (D-CA) reportedly declined President-elect Obama's offer to be the new U.S. Trade Representative because he "came to the conclusion that [trade] wouldn't be priority number one, and it might not be number two or three." Given the enormous problems facing the American economy, and given American attitudes toward trade ranging from ambivalence to outright hostility, that is not surprising. And neither is this necessarily catastrophic news, as long as new protectionist measures are avoided and steps are taken to improve prospects for the poorest countries in this period of instability and uncertainty.Indeed, vigorous efforts to fix health care, the U.S. educational system, and our physical infrastructure, are necessary foundation stones for American well-being that could pay important dividends for trade policy as well. Americans are concerned about trade because the safety net here is thin and so full of holes that many people fall through. Most frightening for many of them, especially those with children, losing one's job -- for whatever reason -- often means losing one's health insurance. Thus it is that we find a trade odd couple, Fred Bergsten, director of our sister institute, the Peterson Institute for International Economics, and Raymond Offenheiser, president of Oxfam America, calling on President-elect "Obama and the new Congress to look beyond the emotional way this issue has often been debated on the campaign trail and embrace both trade and the domestic policy reforms that are needed to make openness acceptable to the American public."It would be preferable if the new administration did not let the Doha Round of global trade talks languish for years. And it is essential, if the trade talks are headed for a lengthy hibernation, for the administration and Congress to move quickly in 2009 to improve the trade preference programs that could provide a lifeline for the most vulnerable countries. But in the longer run, the United States will only remain a leader in promoting an open and cooperative global trade system if it gets its own house in order.