Ron Kirk rejects any 'timeout' on new NAFTA-like free trade pacts

Ron Kirk, US trade representative, wants lawmakers to push ahead on new free trade pacts. Some Democrats advocate a timeout to assess the effects of existing accords such as NAFTA.

Monitor Breakfast

The Obama administration is pouring cold water on a suggestion from some congressional Democrats for a “timeout” from new free trade agreements until the existing accords – including NAFTA, the poster child for free-trade pacts – can be fully assessed.

US trade representative Ron Kirk says he will press hard to persuade trade-wary Democrats and Republicans of the merits of President Obama’s trade policy agenda for 2010. The agenda includes completion of the Doha Round of global trade liberalization and passage of pending US free-trade agreements (FTAs).

The US has negotiated FTAs with Colombia, Panama, and South Korea – all of which are awaiting congressional ratification.

Ambassador Kirk, speaking at a Monitor lunch with reporters Wednesday, said the administration will work to address concerns about the impact of new trade pacts, but he was categoric in his opposition to any measures to slap an indefinite hold on the trade accords already gathering dust. (For an analysis of the rising wariness about free-trade pacts, click here.)

“I’ve been very honest that we have to find a way to do these [ratify new pacts and assess the impact of existing ones] simultaneously and not take a timeout from trade,” Kirk said.

A 'thorough review' sought

Also on Tuesday, Sen. Sherrod Brown (D) of Ohio announced legislation that would require a “thorough review” of all existing trade agreements before any new ones are signed into law. “We need hard data on the effect our trade agreements have on American wages and jobs, so that we know what we are getting ourselves into before we move forward” on new FTAs, Senator Brown said in a statement.

Controversy over existing FTAs is just one stumbling block for Obama’s agenda of expanding US trade and doubling US exports over the next five years. A potentially larger hurdle is China.

Kirk acknowledged that the administration is “extremely frustrated” with China over some of its trade practices and its currency policy, which many expert deem to be currency manipulation designed to promote Chinese exports.

The US is also concerned about a new “indigenous innovation policy” in China, says Kirk. State-of-the-art US manufacturers worry that China's new policy would require them to share design secrets if they want to keep doing business in China, potentially the world’s largest consumer market.

The area of “intellectual property” is the key to billions of dollars in exports to China, “and must be at the top” of the United States' multifaceted agenda with China, Kirk says. None of the challenges, he adds, is big enough to warrant turning away from a huge and dynamic market.

“We are nowhere near a point of saying we should give up on China,” Kirk says.

Trade as US economy's booster rocket?

Kirk, a former mayor of Dallas who supported passage of NAFTA during the Clinton presidency, notes that US exports have grown three times faster than the economy since the depths of the recession last year. What that means, he adds, is that trade will be too important to all Americans in terms of jobs and the economic recovery to be caught up in a partisan tug-of-war over trade’s impact and issues like labor rights and trade-adjustment measures. (For Monitor analysis of Obama's export goals, click here.)

“We can’t allow trade," Kirk says, "to become the next wedge issue.”