Earlier this week Shadow Government's Phil Levy threw some cold water on my pre-election optimism that foreign economic policy would take the lead in 2013, attributing it to my being  in Paris when I wrote it.  Phil has a lot more hands-on experience in these matters than I do, so it's worth reading his post in full.  To sum up here, however:

If, on a 10-point scale, the first term free trade challenges were a 'degree of difficulty' 2, then this term's challenges are an 8 or a 9.... it may be useful to distinguish between President Obama's political cost/benefit of negotiating a trade agreement and of concluding one....

Trade agreements take time. If the president is to get anything completed, he needs to start right away.

How to respond? Well, first, I have a confession -- I did have a lovely time in Paris. 

That said, now that I'm back in the austere bleakness that is November in New England, I'll stand by my prediction.  This is for a few reasons.  First, to push back on Phil a bit, I wouldn't characterize Obama's free trade challenges in the first term so easily.  As someone who was pretty critical of the president on trade matters, I would nevertheless acknowledge that he was facing gale-force winds on this topic during his first term.  In retrospect, if I had told Phil that the global economy would face the worst economic crisis since the Great Depression and yet the United States would not resort to rank protectionism, I think he'd be moderately pleased.  Now, this wasn't entirely due to Obama, but still, I think he could have made things a lot worse... but didn't. 

To be fair, I think Phil's point was intended to be a bit narrower -- namely, that it was easy for Obama to push ratification of Budh-negotiated FTAs but hard to negotiate his own.  But surely, one of the reasons that Democrats were not particularly keen on those FTAs is because Bush negotiated them, yes?  If a Democratic president claims ownership of an FTA, I'd bet he's gonna get more party support in Congress.  Also, a side note: I'm dubious that traditional Democratic Party objections would block either the TPP or a Europe deal. 

Finally, in his post, Phil actually lays out the logic of why I think these deals will go forward:

The problem is that U.S. trading partners will not be infinitely patient in awaiting the conclusion of the deals under discussion. From a broader foreign policy perspective, the TPP is absolutely central to the administration's pivot to Asia. Europeans are eagerly backing the idea of an FTA as one of the few positive signals they might send to investors amidst the still-looming euro zone crisis. There will be serious foreign policy consequences if the president fools us thrice on support for trade.

Phil is right -- and it's precisely this reason that makes me think that Obama will make more forwrd progress on this in his second term.  For most of the postwar era, the United States could act as a veto player.  If it didn't get what it wanted in the GATT/WTO or some regional agreement, well, progress was halted.  One way the world has changed is that even if the United States calls a time-out, the rest of the world won't.  That kind of logic can compel even reluctant traders into agreeing to deals once they recognize that the status quo is even worse -- a logic that Lloyd Gruber spelled out in his excellent, underrated book Ruling the World. 

Now I'm not quite Nate Silver-like in my confidence about the next term, but I do hereby offer a challenge to Phil:  I'm willing to bet that at least two out of the following four things will happen during Obama's second term: 

1)  A Trans-Pacific Partnership that is ratified by Congress;

2)  Bilateral investment treaties with India and China;

3) A transatlantic integration agreement;

4)  A new services deal within the auspices of the WTO.

If Obama comes up short, I hereby offer to treat Phil to an expensive dinner at a DC restaurant of his choosing, because clearly Washington remains dysfunctional.  If I'm right, however, Phil has to buy me dinner in New York, that most globalized of American cities. 

I suspect that most of today's foreign policy post-mortems about last night's town hall debate will focus on the Libya question, in which, according to Taegan Goddard, "Obama acted like a president in the exchange while Romney was much less. It was Romney's Gerald Ford moment."  He's not the only one to make this assessment.  I'm not sure I would go that far, but Romney did manage to convert a pretty strong initial response to the question into a bad, bad moment for him. 

But let's be honest:  regardless of whether you think Romney exaggerated in his description of Obama's Libya response or Obama exaggerated in his rejoinder, those were not the biggest foreign policy whoppers told during this debate.  Not by a long shot. 

If we're going to engage in real-keeping, then let's acknowledge that both candidates fudged, exaggerated, or flat-out lied on just about everything pertaining to foreign economic policy during last night's debate.  It was a truly bipartisan fib-fest.  I could go through the debate transcript line by line, but let's just hit the highlights.  At varous points, one or both of the candidates tried to convince undecided voters of the following: 

1)  Energy independence is the cure for what ails the U.S. economy;

2)  The U.S. loses from trade with China, and tougher trade enforcement will fix that;

3)  Free trade with Latin America will create millions and millions of jobs;

4)  The only reason China is doing well comparatively is that it's keeping its currency undervalued; and finally

5)  Illegal immigration is threatening the American economy. 

Let's inject a little reality here, shall we?  Repeat after me: 

1)  Because most energy sources are traded in global markets, energy independence has zero effect on the economy (though there might be a few security dividends).

2)  The United States benefits a great deal from trade with China and the rest of the world.

3)  Perfect trade enforcement would have only a marginal impact on employment;

4)  China's currency interventions have been slowing down for much of 2012.  Literally.

5)  Illegal immigration into the United States "has been in reverse for several years."

If the foreign policy debate next week has as much mendacity as this one on the global economy, your humble blogger will be passed out in a drunken stupor by 9:30 PM. 

Mitt Romney's op-ed in today's Wall Street Journal is devoted to China policy.  Let's take a read, shall we? 

Barack Obama is moving in precisely the wrong direction [on responding to China's rise]. The shining accomplishment of the meetings in Washington this week with Xi Jinping—China's vice president and likely future leader—was empty pomp and ceremony.

President Obama came into office as a near supplicant to Beijing, almost begging it to continue buying American debt so as to finance his profligate spending here at home. His administration demurred from raising issues of human rights for fear it would compromise agreement on the global economic crisis or even "the global climate-change crisis." Such weakness has only encouraged Chinese assertiveness and made our allies question our staying power in East Asia.

Now, three years into his term, the president has belatedly responded with a much-ballyhooed "pivot" to Asia, a phrase that may prove to be as gimmicky and vacuous as his "reset" with Russia. The supposed pivot has been oversold and carries with it an unintended consequence: It has left our allies with the worrying impression that we left the region and might do so again.

The pivot is also vastly under-resourced. Despite his big talk about bolstering our military position in Asia, President Obama's actions will inevitably weaken it. He plans to cut back on naval shipbuilding, shrink our Air Force, and slash our ground forces. Because of his policies and failed leadership, our military is facing nearly $1 trillion in cuts over the next decade.

This is interesting because it's the first time I've seen a GOP candidate try to respond substantively to the "pivot".  And, in my book, the criticism that Obama was too much of a supplicant to China in the first part of his term is actually a fair one.  Unfortunately, things fall apart after that. 

First, Asian allies were worried about the U.S. presence in the region because of the priority the Bush administration placed on the global war on terror, followed by the 2008 financial crisis.  Obama had little or nothing to do with it.

Second, it's important and revealing that Romney only talked about the narrow, military part of the pivot.  Left unmentioned were the diplomatic components (joining the East Asia Summit, interceding on the South China Sea, warming relations with Myanmar, tripartite between the U.S., Australia and India) as well as the economic components (ratifying the FTA with South Korea, signing the framework agreement for the Trans-Pacific Partnership).  This is important, because any U.S. strategy in the Asia-Pacific region has to be a full-spectrum approach, while Romney seems peculiarly obsessed with shipbuilding. 

Third, the primary message Obama has been sending to Xi has been saying that China "don't play by the rules."  Which, coincidentally enough, is exactly the same thing Romney says in the op-ed. 

In the economic arena, we must directly counter abusive Chinese practices in the areas of trade, intellectual property, and currency valuation. While I am prepared to work with Chinese leaders to ensure that our countries both benefit from trade, I will not continue an economic relationship that rewards China's cheating and penalizes American companies and workers.

Unless China changes its ways, on day one of my presidency I will designate it a currency manipulator and take appropriate counteraction. A trade war with China is the last thing I want, but I cannot tolerate our current trade surrender.  (emphasis added)

The bolded section represents the only portion of the op-ed in which Romney even hints that he might cooperate with China.  The rest of it is pretty silly.  It's ludicrous for Romney to claim he doesn't want a trade war in the same breath that he promises "day one" action against China.  No wonder conservatives are labeling Romney's China policy as "blaringly anti-trade." 

To be blunt, this China policy reads like it was composed by the Hulk.  Maybe this will work in the GOP primary, but Romney and his China advisors should know better. 

I'm at a stage in my career when reporters will occasionally call or e-mail me for an "expert" opinion on something.  I've gotten better at refusing those requests when I'm not really an expert but just a snarky blogger.  Still, even when I can claim expertise, I don't always do that great of a job. 

To see what I mean, consider this New York Times front-pager by Mark Landler and Annie Lowrey on President Obama's proposed reorganization of foreign economic policy agencies.  I'm quoted accurately in this story -- but I'm not quoted fully.

To explain, here's the key bits of the article:

Mr. Obama called on lawmakers to grant him broad new powers to propose mergers of agencies, which Congress would then have to approve or reject in an up-or-down vote.  If granted the authority, he said, he would begin pruning by folding the Small Business Administration and five other trade and business agencies into a single agency that would replace the Commerce Department....

Despite regular vows by presidents to overhaul government — Mr. Obama made one in his State of the Union address last January — few have followed through. Those who did, like Richard M. Nixon, often met with failure. Scholars have mixed feelings about such reorganizations, with some arguing that they rarely lead to lower head counts, more effective departments or savings.

“My gut tells me those benefits will end up being much smaller than advertised, and the costs much larger,” said Steven M. Teles, a political scientist at Johns Hopkins University, pointing to the time wasted during the consolidation and the changed political dynamic between the agencies and Congress.

But experts on government efficiency applauded the initiative, saying it was overdue, and some analysts said it made sense to combine agencies involved in business development, foreign investment and trade promotion into a single department with the mandate to promote American exports.

“If you look at American exports, it’s dominated by big business,” said Daniel W. Drezner, a professor of international politics at Tufts University. “If you want small and medium enterprises to get more involved in exporting” — a goal of the Obama administration — “having small business and the trade office in the same agency makes sense,” he said. “So this could be a boon for that.”

Now, based on that quote, you might think that I'm pretty enthusiastic about this initiative.  If, however, you checked my initial tweets about this proposal, you would notice a lot more agreement with what Stephen Teles said in the paragraphs above me.  My instant assessment was that this was one of those "reorganizing government" initiatives that makes a lot of sense in the abstract but probably leads to more transition costs than long-term benefits.  Indeed, the first thing that came to mind could be summed up in four words:  Department of Homeland Security. 

So what gives?  This is what happens when I talk to reporters.  I had a long chat with Annie Lowrey during which I listed A) the various ways in which Congress won't go for this; and B) why merging different organizational cultures will likely be a big mess.  Lowrey then asked me if there was any rationale for this kind of reorganization.  At which point I said what was quoted in the paper of record. 

Now if you know my views about the National Export Initiative, you'll see I don't hold out much hope of this accomplishing anything.  Still, to repeat, Lowrey's quote of me is completely accurate, and it is a decent motivation for this kind of initiative. 

This is one of those mismatches between reporters and experts.  It's not really the reporter's job to convey the full gist of a conversation with an expert.  This story isn't "What Dan Drezner The Expert Thinks About Something," after all.  Still, this is often the natural expectation of many experts, because we think about the entire conversation, not just one part of it.  Furthermore, it's an expectation that, despite multiple occurences like this, stubbornly persists in my brain.  So the impulse to develop disciplined talking points and not stray from them has never developed. 

Why?  Because I like answering questions fully, or trying to, anyway.  That's why I got a doctorate, and why I became a professor.  This impulse, by the way, is why so many experts loathe presidential debates.  The candidates are  usually too savvy to directly answer a question.  Rather, they are being tested on their ability to pivot from the question that's asked to the talking point that is closest to that question. 

This is a long-winded way of saying that what I said in the Times was the truth but not the whole truth.  And that the odds are good that I'm probably going find myself in this situation again.  And that's OK -- one of the perks of having this blog is that when this sort of thing happens, I can ramble my way to a more fuller explanation of my views. 

So check out David Rothkopf for a full-throated defense of Obama's proposal.  Despite my quote in the Times, you're not going to see one here. 

UPDATE:  Now this is fascinating.  The Anchorage Daily News runs a version of the Times story -- except that the ADN version has much fuller quotes from more experts.  The relevant portion: 

One government efficiency expert, Jitinder Kohli, applauded the move.

"These efforts to rationalize government are long overdue, frankly," said Kohli, a senior fellow at the left-leaning Center for American Progress. "In fiscally tight times, it's even more important to think carefully about how to deliver savings — and that includes making websites easier to use, providing single points of entry and streamlining."

"In the world of business, reorganization happens all the time, for good reason," Kohli added. "The world changes around businesses, and businesses change to better serve the world. But the government is far, far less nimble."

Still, a body of research throws cold water on the notion that such reorganization leads to lower head counts, more effective departments or cost savings.

"The most important considerations are the costs in wasted time while they do the reorganization, how this changes the politics of the affected agencies in relation to Congress and other executive branch agencies, and how specific the purported benefits of consolidation are," said Steven M. Teles, an associate professor of political science at Johns Hopkins University. "My gut tells me those benefits will end up being much smaller than advertised, and the costs much larger."

Daniel W. Drezner, a professor of international politics at Tufts, said "This is one of those ideas that looks great in abstract. But you're talking about merging the organizational cultures of five or six agencies. It takes a long time for efficiencies and synergies to work out. They're not going to play well for a while."

Nonetheless, Drezner said that having a single body devoted to export promotion made sense.

"If you look at American exports, it's dominated by big business," he said. "If you want small and medium enterprises to get more involved in exporting" — a goal of the Obama administration — "having small business and the trade office in the same agency makes sense. So this could be a boon for that."

Susan C. Schwab, who served as a U.S. trade representative during the Bush administration, agreed that the move might improve export promotion. But she said that it might do so at the expense of broader trade policy.

"You'd take a small, very efficient agency and have it totally swallowed up by this behemoth," said Schwab, who is now a professor of public policy the University of Maryland. "From a trade policy perspective, it makes no sense at all."

Schwab added, "Trade policy involves so many different sectors of the economy, and U.S. interests. It's foreign policy. It's manufacturing. It is services, agriculture, consumers, labor, the environment, intellectual property."

An agency without a strong trade representative, she said, could end up giving "short shrift" to some concerns.

Had this been the version that the Times ran, I wouldn't have bothered blogging about this, because my quotes were both accurate and captured to gist of what I was saying. 

Of course, this is a longer story, which reminds me that sometimes it's not the reporter that has mismatched incentives -- it's the editor worried about length. 

Today is Patriots Day in Massachusetts, which means it's a school holiday, which means I'm at home with the Official Blog Children.  Because I don't have much time to blog in-depth about much, I'd like to address a shallow topic this AM -- Donald Trump. 

The current frontrunner for the 2012 GOP presidential nomination has made a few comments hinting at how he would approach foreign economic policy.  Let's take a look, shall we? 

From the Wall Street Journal: 

As for foreign policy, Mr. Trump said he is "only interested in Libya if we take the oil," and that if he were President, "I would not leave Iraq and let Iran take over the oil." He remains sharply critical of the Chinese, asserting that as President, "I would tell China that you're either going to shape up, or I'm going to tax you at 25% for all the products you send into this country."

"I'm all for free trade, but it's got to be fair trade," he said. "China has taken advantage of this country for a long time." Regarding the $300 billion he said China stands to make from trade with the U.S. this year, Mr. Trump said, "What's protectionism? ...I want to be protected if that's the case." As for pending trade deals with Colombia, Korea and other countries, he said he would only sign them if they were the right deals for the U.S. "If it's a bad deal, I wouldn't sign it," he said.

Here's a fun little project for the commenters:  predict what would happen to the global political economy if, in fact, President Trump seized all of Iraq's oil reserves and slapped a 25% tariff on Chinese exports.  Hint:  I don't think it ends well. 

As for the trade deals, given that almost all of Panamanian and Colimbian exports come into the United States duty-free, I'm dying to hear how the Donald is going to improve upon them. 

The stuff from the WSJ is boilerplate economic populism mixed with a healthy dollop of ignorance about the global economy --  but then there's this exchange with CNN's Candy Crowley:   

Donald Trump says that the "right messenger" could tell OPEC to lower crude oil prices, insisting that prices "will go down if you say it properly."....

Asked on by CNN host Candy Crowley what his idea would be to get OPEC to lower crude oil prices, Trump said: "It's the messenger."

"I can send two executives into a room. They can say the same things; one guy comes home with the bacon and the other guy doesn't," Trump said. "I've seen it a thousand times. ... We don't have the right messenger. [President Barack] Obama is not the right messenger. We are not a respected nation anymore and the world is laughing at us."

Well, I agree with Trump that the world is laughing at someone. 

The statement that the U.S. is "not a respected nation anymore" is flatly false.  As for whether the "right messenger" can convince OPEC to lower crude oil prices, methinks that Trump is vastly exaggerating the ability of any messenger to tell countries to act against their economic and political self-interest (not to mention OPEC's influence over oil prices).  Well, that or he's been watching this scene way too many times. 

According to Politico's Maggie Haberman and Ben Smith:

More than anything else, according to those who’ve spoken to [Trump], he doesn’t want to be seen as the butt of this particular joke.

“He gets mad that people aren’t taking him seriously,“ said one Republican who’s spoken with him.

So, just for the record , this is me trying to take Donald Trump's policy pronouncements seriously.  That said, I'd like to thank the Donald for providing such easy blog fodder on a holiday! 

Trying to pick the most offensive campaign ad of this election season is not easy -- there's a long and distinguished list of truly offensive ads out there. However, my award for Most Offensive Ad goes to the Democratic Senatorial Campaign Committee with this attack ad on Pennsylvania Republican senatorial candidate Pat Toomey:

I'll give credit to the DSCC: Not everything in the ad is offensive, just 98 percent of it. By far, however, the worst part is the DSCC's suggestion that Pennsylvanians not vote for Toomey because he thinks that "it's great that China is modernizing and growing." Using that logic, apparently the DSCC supports doing everything to keep China backwards and impoverished. Which, if you think about it a little bit, is really disgusting.

I'd love to say that this is the only anti-globalization ad of this election cycle, but that's obviously not true. In another ad, the DSCC blasts Toomey for -- God forbid -- spending part of his career overseas. Forbes' Shikha Dalmia points out, however, that both sides have been throwing up mercantilist ads as fast as they can produce them: 

Virg Bernero, the Democratic gubernatorial candidate in Michigan, where I live, has dubbed his opponent, Rick Snyder, Chief Executive Outsourcer (ha, ha). Mr. Snyder's crime is that he is a successful businessman who invested in a semiconductor company that once employed five -- five! -- people in Shenzen to sell its products in China. In other words, it is no longer a sin to buy from China. It is also a sin to sell to China! (Where did Bernero get his views on trade theory, anyway? The Kim Jong Il School of Autarky?)

Nor is Bernero alone in the Democratic Party: California Sen. Barbara Boxer is accusing her opponent Carly Fiorina, former CEO of Hewlett Packard, of outsourcing thousands of jobs to "Shanghai instead of San Jose"; Senate Speaker Harry Reid is calling Sharron Angle "a foreign worker’s best friend"; and Richard Blumenthal, Connecticut Attorney General running for Senate, who lied about serving in Vietnam, has the temerity to attack his opponent, the former CEO of World Wrestling Entertainment, for "outsourcing" American jobs because her company got toy action figures manufactured in China instead of America.

Hostility to trade is par for the course for Democrats perennially beholden to Big Labor, but what is the excuse of Republicans -- the alleged believers in free markets? In race after race, they too are hitting China to beat Democrats. In West Virginia, Spike Maynard, a Republican running for the House is airing ads against his opponent, complete with Asian music in the background, castigating him for giving stimulus money to a Texas company that happens to be buying windmills from China. Meanwhile, in Virginia Republican Robert Hurt is accusing Rep. Tom Perriell of supporting tax breaks for foreign companies "creating jobs in China."

Well, it's not that surprising to see this. Americans think about trade through a mercantilist, relative gains lens, as opposed to the radical concept that trade can generate win-win outcomes. The Obama administration has abetted this mindset with a trade policy that careens between an idiotic exclusive focus on exports and complete radio silence. And, of course, China has been taking steps in recent months in order to perfect their role as economic bogeyman.

I'd love to say that if the Obama administration mounted a full-throated defense of trade liberalization, this mindset would go away. The thing is, I don't believe that. As the Gallup data suggests, even decent growth rates won't eliminate the zero-sum mindset that people have when it comes to free trade. 

Developing… in a thoroughly depressing manner. 

Yesterday President Obama delivered a speech fleshing out his National Export Initiative -- the doubling of U.S. exports in the next five years.  Longtime and short-time readers of this blog are already aware of my deep skepticism of this idea. 

Others at FP, however, observe that it has happened in the past (1981 most recently), so  perhaps "Obama's plan to double the number by 2015 does not seem so far-fetched." 

So, let's clarify:  the possibility of U.S. exports doubling in the next five years is pretty small, but within the realm of the doable.  Obama's National Export Initiative will have no appreciable effect on export flows. 

The fundamental drivers for U.S. exports are the rate of economic growth of the rest of the world and the exchange rate value of the dollar.  If the dollar depreciates in value and the rest of the world experiences high rates of economic growth, then exports will take off.  Everything else would generously be described as window dressing. 

Let's consider the content of the key parts of Obama's speech to see what I'm saying:

I know the issue of exports and imports, the issue of trade and globalization, have long evoked the passions of a lot of people in this country.  I know there are differences of opinion between Democrats and Republicans, between business and labor, about the right approach.  But I also know we are at a moment where it is absolutely necessary for us to get beyond those old debates. 

Those who would once support every free trade agreement now see that other countries have to play fair and the agreements have to be enforced.  Otherwise we're putting America at a profound disadvantage.  Those who once would once oppose any trade agreement now understand that there are new markets and new sectors out there that we need to break into if we want our workers to get ahead.

First of all, a quick message to Jon Favreau:  Jon, this going-beyond-old/stale-debates thing gets tedious if you use it for every friggin' policy initiative. 

Second of all, could someone, anyone, point to a politician that once opposed trade deals and are now in favor of them?  Anyone? 

So, what are the components of the National Export Initiative, beyond a couple of interagency committees that will accomplish nothing?

First, we will substantially increase access to trade financing for businesses that want to export their goods but just need a boost –- especially small businesses and medium-sized businesses.

Let's be generous and say that this would make a huge difference (it won't) and that it would really increase exports from this sector.  Given that roughly 70% of U.S. exports come from large corporations, this still wouldn't accomplish all that much.  Next!!

[T]he United States of America will go to bat for our businesses and our workers....

Going forward, I will be a strong and steady advocate for our workers and our companies abroad.

And this effort will extend throughout my administration.  Secretary Locke is issuing guidance to all senior government officials who have foreign counterparts on how they can best promote our exports.  Secretary Clinton is mobilizing a commercial diplomacy strategy, directing every one of our embassies to create a senior visitors business liaison who will manage our export advocacy efforts locally, and when our ambassadors return stateside, we’ll ask them to travel the United States to discuss export opportunities in their countries of assignment. 

SCENE:  A small factory somewhere in Malaysia. 

The PLANT MANAGER and his FOREMAN are looking at the assembly line:

FOREMAN:  You know, we could really make a better widget if only we had a better-quality thingmabob.

PLANT MANAGER:  Well, we could import it from Vietnam, Taiwan, South Korea, Japan....

[Sound of trumpets grows louder.  PRESIDENT OBAMA enters the factor on a Segway.]

PRESIDENT OBAMA:  Have you thought of buying American?  [Obama exits]

[PLANT MANAGER and FOREMAN smack hands on heads]

PLANT MANAGER:  Why, of course!!  I can't believe we didn't think of importing from the largest economy in thw world! 

FOREMAN:  I know, it's like, we never even thought of America as a producer of anything!

PLANT MANAGER:  Thanks, President Obama!!

[End scene.]

Third, we’ll unleash a battery of comprehensive and coordinated efforts to promote new markets and new opportunities for American exporters.

Yawn.  See response to point one. 

The fourth focuses on making sure American companies have free and fair access to those markets.  And that begins by enforcing trade agreements we already have on the books.

As I've said before, this is akin to saying that the budget deficit can be fixed through better tax collection measures by the IRS.  It won't accomplish much of anhything.

Of course, new trade agreements might actually expand export opportunities, but the language in the speech on that front contains nothing new. 

We’ll also work within the G20 to continue global recovery and growth.  Last year, when the G20 met to coordinate the international response to our global economic crisis, we agreed that in order for that growth to continue, we needed to rebalance our economies.  For too long, America served as the consumer engine for the entire world.  But we’re rebalancing.  We are now saving more.  And that means that everybody has got to rebalance.  Countries with external deficits need to save and export more.  Countries with external surpluses need to boost consumption and domestic demand.  And as I’ve said before, China moving to a more market-oriented exchange rate will make an essential contribution to that global rebalancing effort. 

If there were any concrete policy directives on this front, I would straighten up and put away the snark.  Global rebalamcing would have an appreciable impact on exports.  Unfortunately, there's nothing in the speech on this topic beyond this paragraph. 

Finally:

[W]e’re going to streamline the process certain companies need to go through to get their products to market -– products with encryption capabilities like cell phone and network storage devices....

[W]e’re going to eliminate unnecessary obstacles for exporting products to companies with dual-national and third-country-national employees.

My reaction to this idea is the same as my reaction to the rest of the list -- these aren't awful policy ideas so much as completely superfluous.  None of them wuill have an appreciable effect on exports. 

The primary purpose of the National Export Initiative is to function as a political excuse.  The White House now has something to point to when critics accuse them of lethargy and/or protectionism on the trade front.   That is all. 

Did I miss anything? 

My latest column in The National Interest online is up, and it sounds a warning about the Obama administration's policy malaise on both the Asia/Pacific region and the #1 issue to countries in the Asia/Pacific region -- namely, trade:

Obama’s policy malaise on trade will not win him friends in a region hell-bent on deepening economic integration. U.S. policy on trade liberalization has stalled out so badly that rumors are swirling around the Beltway that U.S. Trade Representative Ron Kirk is contemplating resignation. Meanwhile, countries in the region are signing free-trade agreements with each other at a record pace. The European Union has inked a free-trade deal with South Korea, and is negotiating one with Japan. In contrast, the chances of the Korea-United States free trade agreement passing this Congress is hovering around zero. The comparison with China is particularly dispiriting....

The United States has not been eclipsed yet—the bevy of activity in the Pacific Rim is a lot more about hedging than balancing against the United States. Nevertheless, if President Obama wants to be taken seriously in the region, he needs to take the region’s issues more seriously. Trade is not merely about economics—it’s about foreign policy too. Just because Washington ignores a policy issue does not mean others do not think it important. As we are learning, some regions can bypass America altogether if they so choose. 

In a very disturbing sign of the times, I see that former State Department official Evan Feigenbaum has written something similar for the Financial Times: 

[T]he business of Asia is business. Without more vigorous trade engagement, such diplomatic efforts cannot secure America’s position in a changing Asia. The US could soon face a region less willing to accommodate its commercial and financial interests.

Many eons ago in graduate school Only recently Evan and I woul talk about the Asia/Pacific when we were matriculating in graduate school together -- and, more often than not, we disagreed with one another.  The only times we agreed was when some serious s**t was going down.  So take this consensus for what you will. 

My latest column for The National Interest Online is now available.  It takes a longer look at the implications of Obama's tire tariff decision.  The more I look at this move, the more freaked out I get.  I think I've figured out the precise contours of Obama's trade strategy -- and trade plays a very small role: 

With Obama... this dip in the protectionism pool feels like the beginning of something much greater. Many Democrats feel warm and fluffy about protectionism, as a mechanism to improve labor standards or an ironclad guarantor of union jobs. This love affair isn’t going to stop. Thea Lee, the chief economist of the AFL-CIO, told the New York Times that “the trade decision was the president’s first down payment on his promise to more effectively enforce trade laws, and it’s very much appreciated.” Unions are already demanding additional action against Chinese steel....

All presidential administrations engage in protectionism—it’s often the cost of pushing through other forms of trade liberalization. While the previous two administrations engaged in these kinds of actions, they could proudly point to ambitious agendas of trade liberalization as well. The Clinton administration sought to add contentious labor and environmental side agreements to its trade deals—but Clinton also spent political capital to get NAFTA and the Uruguay round through Congress. Bush imposed the steel tariffs—but his administration also secured the passage of (now expired) trade promotion authority, launched the Doha round, and completed major trade agreements with Australia and Central America. President Bush also rejected this action against Chinese tires on four separate occasions.

Barack Obama has no record of trade liberalization to fall back on when defending this measure. Indeed, this is the first major trade action his administration has taken. Based on the political reporting of this trade action, it seems clear that Obama will use trade policy as a sop to his base in order to keep them behind his major policy initiatives on health care, financial regulation, and environmental protection.

Obama has largely decided to become a domestic-policy president. His supporters, his base and the politicking of his underlings indicate things will only get worse. With the global economy in deep crisis, protectionism is a terrible way to build a recovery.

Go read the whole thing. 

A few months ago I was at a panel on the April G-20 summit, when someone asked why there was a pledge to complete the Doha round when no one expected that to happen? 

The answer given by the trade experts in the room was that, as toothless as such a statement might sound, it was worse not to say anything.  The signal of not mentioning Doha was ostensibly worse than the cynicism of claiming that two plus two equals five. 

Bear this in mind when reading the following: 

The world’s biggest economies agreed on Thursday to conclude a comprehensive trade deal in 2010, in the latest attempt to revive the stalled Doha round and give a shot in the arm to the world economy.

Rich countries gathered for the G8 summit agreed with ten other large economies – including India, China and Brazil – that trade talks must resume urgently, with a deadline set for completion next year.

The agreement in the Italian town of L’Aquila will be hailed by world leaders as a decisive moment in reviving the global economy and a statement of intent to conclude a trade round which began in Doha in 2001.

But there will be widespread cynicism over whether such commitments are credible. Every G8 summit – not to mention other international summits – ends with leaders paying lip service to finalising a trade round.

If Obama actually tries a "Nixon goes to China" moment on trade, I might be more optimistic.  But with global warming and health care on the horizon, I have zero confidence that Doha will be completed within the next eighteen months. 

Anu Bradford is hosting a blog roundtable at the University of Chicago's Law School faculty blog about the future of the World Trade Organization. 

So far, the consensus is not encouraging for fans of an open global economy:

Anu Bradford:  "Trade protectionism is on the rise but the institutional foundations of international trade deals have been shaky for several years."

Daniel Abebe:  "we should see great power competition to be increasingly focused on trade issues and, given the tentative claims here, we should see increasing gridlock in the WTO."

Greg Shaffer:  "As for the Doha Round, it looks pallid in light of the staggering financial crisis that confronts us."

Richard Steinberg:  "As a location for trade negotiation, the WTO is dead." 

Well, that is all cheery news! 

In fairness, both Shaffer and Steinberg point out that the WTO is not irrelevant, because its Dispute Settlement Understanding remains the gold standard of enforcement in economic cooperation.  That said, this is still pretty bleak.  What can the WTO do? 

Read the rest of their posts to see some of their suggestions.  Here's my modest proposal -- the WTO needs to start an ilicit nuclear weapons program. 

Think about the benefits:

1. If you thought enforcement was good now, imagine what it would look like backed up by a nuclear deterrent.  The Appellate body would become a seriously bad-ass judicial authority.
2. Trade negotiations would move from page B23 of the business section to page A1.  This would create domestic political pressures for successful negotiations. 
3. The Obama administration would immediately dispatch a high-level envoy to negotiate with the WTO.
4. Russia and China would reflexively support the WTO on various policy positions in the U.N. Security Council.
5. The WTO could likely extract a better set of lunch options for its Geneva-based personnel.  Having just been there, let's describe the current menu of choice as "underwhelming."

A nuclear-armed WTO -- good for trade and good for nonproliferation. 

The World Trade Organisation has dropped plans to convene ministers to push for an outline deal in the troubled global trade talks – a further blow to world leaders’ promises to combat protectionism. Pascal Lamy, WTO director-general, said a meeting, originally planned for next week, “would be running an unacceptably high risk of failure which could damage not only the round but also the WTO system”.... The outcome runs counter to promises made by leaders of the Group of 20 major economies in Washington last month, who were committed to reaching an outline deal this year and promised no new protectionist actions within 12 months. Since then at least five of the G20 – Russia, India, Indonesia, Brazil and Argentina – have announced their intention to raise import tariffs or otherwise restrict trade.... Trade experts said the episode underlined the weakness of rhetorical agreements such as the G20 statement to constrain governments faced with domestic political pressure. Douglas Irwin, trade economist at Dartmouth College in the US, said: “Such statements may sometimes act as a signal to local legislatures, but there is usually ample room for governments to renege or weasel out of their commitments.” Since the G20 meeting, Russia has announced it will increase import tariffs on cars, India has raised duties on iron, steel and soy and Indonesia has alarmed trading partners with measures to benefit local producers. Brazil and Argentina have argued for an increase in external tariffs for Mercosur, the Latin American trade bloc of which they are the two biggest members. The G20 was lauded by attendees as a landmark meeting that would put big developing countries at the heart of global policymaking. Following last month’s summit, Gordon Brown, the UK prime minister who will host the next G20 meeting, said there would definitely be a meeting of trade ministers this year. Downing Street did not return calls on Friday. The countries that have raised tariffs deny breaking the agreement. The US said on Friday that it could not be blamed for the stalemate in Doha.