Elections May Improve Outlook

Speculation is rampant in Washington that the November 2 midterm elections will usher in a new phase of trade expansion for the United States. According to this view, Republicans will win the House of Representatives and as one of their first items of business in 2011, the new Congress, led by Speaker John Boehner, will seek to move on three pending agreements: Korea, Colombia and Panama.

Additional steps will follow, on APEC, the Trans-Pacific Partnership, and perhaps even the long-stalled Doha world trade discussions.

It's a great theory, but don't hold your breath. We need to expand trade, both as a means to bolster U.S. economic growth and job creation as well as a means to support core U.S. foreign-policy interests. But there are at least three reasons to think that the trade agenda will still be marked by acrimony and delay even with a Republican takeover of the House.

• First, Republicans must actually win the House, and elections are unpredictable. As everyone who suggested that Dilma Rousseff would run away with the Brazilian elections can attest, it's tricky to declare victory before anyone has actually voted.
• Second, although it's true that in recent years Republicans have generally been more supportive of trade expansion agreements, there is no guarantee that the populist Tea Party types who may be elected this time will be any more supportive than their populist Democratic counterparts. Former U.S. Trade Representative Rob Portman will likely be elected to the Senate from Ohio, but it's hard to believe that a Sen. Rand Paul of Kentucky, son of Ron Paul, would be a similar champion for trade. In the House, the scenario is even less well defined.
• Third, Republicans have said over and over again on the campaign trail that their top priority in the majority will be to dismantle legislation that the Obama administration proposed during its first two years, notably healthcare reform and other high-profile items. Expect increased polarization in Washington as much of the agenda for the past two years is re-litigated, while pending items such as the extension of Bush-era tax cuts and the proposed draw-down from Afghanistan are thoroughly aired in Congress. Expect, as well, a Republican effort to amp up hearings and investigations of the executive branch, an effort that will further divide the parties and make compromise on controversial issues less likely. Progress on trade would not appear to fit comfortably within such a scenario.

Presidential leadership will be required. The president spoke favorably about the three pending agreements in his 2010 State of the Union address and elsewhere. The administration wants to move ahead on Korea first and then consider Colombia and Panama at some undefined future moment.

What this sequencing of agreements means, of course, is that Korea will take up most or all of the oxygen for trade expansion in 2011, unless all three agreements are considered together. But that is unlikely in part because Asia advocates are strongly opposed to weighing down prospects for the Korea FTA politically by bundling it together with Latin American agreements, while Latin America advocates, many of whom are skeptical of the benefits of trade in the first place, have been unable or unwilling to demand equal consideration.

As 2012 is an election year, it's unlikely the White House will then seek to move the hemispheric agreements opposed by its base -- organized labor -- on which it depends for votes and money to counter the extraordinary campaign finance efforts of its opponents, unleashed by the U.S. Supreme Court in the Citizens United decision.

The bottom line: Without reconsideration of the path we're on, it may not be until after the presidential election that Washington will get around to passing agreements with two of our best friends in Latin America, agreements that have languished since 2006 and that would open foreign markets to us in the way ours are already open to them. That would be foreign policy malpractice.

Hopefully, the Nov. 2 election results will advance the trade agenda in the Americas. For that matter, a new understanding of the importance of the region to our own well-being is also required, as is a spirit of renewal in our relations based on an understanding of U.S. interests and ways we can cooperate with others to pursue them.

In the meantime, Latin America continues to move ahead, with or without us.

Eric Farnsworth served in the White House from 1995-98. He is vice president of the Council of the Americas in Washington, D.C.