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The Trade Equivocator

March 08, 2011

Pennsylvania Senator Pat Toomey stopped by our offices Monday, and along the way he had a question: Why won’t President Obama go for a quick and relatively easy bipartisan victory by moving the trade deals with Colombia, Panama and South Korea through Congress?

We’ll get to our answer in a moment, but Mr. Toomey isn’t the only one asking. Late last week an extraordinary collection of 19 former government officials, Democrat and Republican, sent Mr. Obama and Congressional leaders a letter urging swift passage of the Colombia and Panama deals. The 19 served under no fewer than six U.S. Presidents, from Gerald Ford through George W. Bush.

The signatories include two former special envoys to the Americas; six former U.S. Trade Representatives, including Democrats Mickey Kantor and Charlene Barshefsky; and 11 former Assistant Secretaries of State for the Western Hemisphere, including Bernard Aronson and several other Democrats.

“It has been over 5 years since the U.S. negotiated its FTA with Colombia and nearly 5 years since Panama,” says the letter. “Prompt ratification will send the positive message that the United States stands by its allies and values its relationships in the Americas.”

The letter explains the clear American economic self-interest in approving the pacts. In the five years prior to 2008, U.S. exports of major grain products to Colombia grew by 38% a year, worth nearly $4 billion. Since 2008, while the U.S. failed to approve its bilateral pact, Colombia has moved on deals with Canada, Chile, the EU, Brazil, Argentina and other farm product competitors of the U.S.

One result is that U.S. farm exports to Colombia fell 48% between 2008 and 2009, and another 45% in 2010. Exports of corn, wheat and soybeans fell by 68%. The bipartisan letter estimates nearly $700 million in lost U.S. exports in those farm products alone.

The letter urges that the political leaders set a “firm deadline” for ratification “within the first half of 2011.” The writers are political veterans who understand that the longer Mr. Obama delays, the more likely the pacts will get caught up in the election politics of 2012.

Alas, it didn’t take long for the White House to ignore this extraordinary plea, because yesterday current U.S. Trade Representative Ron Kirk formally launched the effort to ratify the South Korean accord. His letter to the House Ways and Means and Senate Finance Committees notably left out Colombia and Panama. Republican leaders have the votes to pass all three and have been urging Mr. Obama to send them up all at once for a formal vote.

So why won’t he do that, per Mr. Toomey’s question? The only rational answer is political fealty to Mr. Obama’s union allies. Big Labor is divided on the South Korea pact, with the United Auto Workers in favor. But the union barons are united against the Latin American trade deals, and our guess is that the White House doesn’t want to anger its political base with a triple play as it heads into what could be a difficult re-election fight. The Obama Administration keeps saying it wants to renegotiate with Colombia, but so far it hasn’t even told Bogota what its new demands are.

Mr. Obama’s political team may be calculating that its only path to victory is a Democratic version of Karl Rove’s 2004 strategy for Mr. Bush—rallying the base to eke out a narrow, partisan triumph. There really is no other explanation for refusing to move trade deals that are sure to pass and would help to create thousands of U.S. jobs.

We think it would be a mistake for Republicans to give in to Mr. Obama’s South Korea-only brinksmanship. The White House would pocket that victory and never send up Colombia and Panama. We’re sorry to have to say it, but Mr. Obama’s trade equivocation is one more sign that his ballyhooed move to the political center is almost entirely rhetorical.