Schwab: Congress has limited time to pass trade deals

As the countdown to the 2008 election continues, Susan Schwab's job gets tougher by the day.

As United States trade representative, Ambassador Schwab's job is first to negotiate the best trade deals she can with other countries and then to sell those agreements to the US Congress.

Complicating the domestic sales job is the fact that, "It is easy to blame trade and blame others and blame imports for all manner of ills," Schwab told a Monitor breakfast on Wednesday. "And that is what we see happening." She said only 2 to 3 percent of US unemployment is linked to trade.

Whatever data economists cite, the North American Free Trade Agreement (NAFTA), which liberalized trade among the US, Canada, and Mexico, is a major issue in the 2008 campaign. Democratic presidential candidates say NAFTA has harmed US workers.

"The sad story about NAFTA is that it has been a tremendously successful agreement by virtually any measure," Schwab said. "If you take the 10 years prior to NAFTA and the 10 years following NAFTA, the unemployment rate went down after NAFTA, manufacturing output went up after NAFTA, the economic growth rate went up after NAFTA." She added that export-related jobs in the US pay 13 to 18 percent more than other jobs.

As the Bush administration's point person on trade with a Congress controlled by Democrats, Schwab is trying to move free-trade agreements with Peru, Columbia, Panama, and South Korea before political emotions surrounding the 2008 election make action impossible.

"We would like to see these pieces of legislation move as quickly as possible. From our perspective, earlier is better," Schwab said. "History shows that ... the United States is capable, has been capable, of moving controversial trade legislation right up until three to four months before an election."

Beyond her work on bilateral trade agreements, Schwab also represents the US in the Doha Round, trade liberalization negotiations among the 151 member nations of the World Trade Organization (WTO). Some experts say that the Doha Round, named after its 2001 launch in the capital of Qatar, may take at least 10 years to complete.

"No single country can solve the Doha Round. You've got 151 economies – members of [the] WTO – trying to reach a consensus, which is a daunting task ... and it only takes a handful of countries to bring down a round like this," Schwab said.

But she quipped at the top of the session with reporters that "The Doha Round is not dead." Later the ambassador added, "There is a real sense of determination to see this round close. This round really is unique in its potential benefits, economic benefits, development benefits, and implications for the alleviation of poverty."

Ambassador Schwab brings a wealth of international experience to her post. Her father was in the Foreign Service and she spent her youth in Africa, Europe, and Asia. According to a recent profile in Fortune magazine, Schwab learned to ride horses with the Tunisian cavalry and adopted a pet mongoose in Sierra Leone.

She earned a BA from Williams College, a master's from Stanford University, and a PhD from George Washington University. Her first job was as an agricultural negotiator for the Office of the US Trade Representative.

Schwab got to know Capitol Hill while working as a trade specialist and as legislative director for then Missouri Sen. John Danforth. She also served as assistant secretary of Commerce in the George H.W. Bush administration. From 1995 to 2003, she did a tour in academia as dean of the University of Maryland School of Public Policy. In late 2005, she was confirmed as deputy US trade representative and was nominated for her current position in April 2006.

Some factors appear beyond the control of even the well-prepared. For example, South Korea banned US beef after a case of mad-cow disease was discovered in the US in December 2003. South Korea had been the third-largest market for US beef products. Later, South Korea lifted some, but not all, limits on American beef.

Schwab calls the trade agreement her team negotiated with South Korea, "by any standard the strongest free-trade agreement that has been negotiated by the United States in 15 years in terms of the volume and value of trade.... The potential benefits to the US economy and to US workers and farmers and ranchers and service providers is tremendous."

But the continuing dispute over beef with South Korea is blocking action on wider trade issues. "As long as the beef issue is out there, I know that Congress is simply not going to focus on the Korea deal and I have been told that by key members, Republican and Democrat," the ambassador said.