The Bush Administration has released its seventh annual Trade Policy Agenda and Annual Report as required by the Trade Policy Act of 1974. The Administration has been active in trade policy, but there will be a huge unfinished agenda passed on to the new Administration in January 2009.

"During the last seven years exports increased by 50 percent and in 2007 accounted for almost 12 percent of GDP, a record high. The U.S. has gone from three free trade agreements (FTAs) in 2001 to 14 in force; three passed by Congress, but not in force; and three concluded, but not yet passed by Congress. The report attributes the growth in FTAs to the 2002 passage of Trade Promotion Authority which permits the President to submit agreements for a straight up-or-down vote in Congress. U.S. exports to the 11 trade partners with FTA implemented from 2001 to 2007 grew 70 percent faster than with the rest of the world. FTA partners account for 7 percent of the world economy, but account for 41 percent of total U.S. exports.

Trade policy has become part of a broader strategic policy. This was especially important for support for CAFTA in 2005 and again with the Peru FTA in 2007. In arguing for approval of FTAs with Columbia, Panama and South Korea, the agenda notes, Òrejection of these agreements would discredit and undermine staunch allies in Latin America and Asia, two regions of vital national security and economic interest to the United States.Ó Trade moves countries closer together politically as producers and consumers develop economic relationships. Recent political actions by Venezuela and Ecuador against Columbia were noted by USTR Susan Schwab in her testimony on the trade agenda this week to the Senate Finance Committee.

This strategic thinking has carried over into the Doha Round of WTO trade negotiations. The agenda explains, ÒThe Members agree that an open trading system dedicated to the rule of law advances global security and alleviates political tyranny and poverty.Ó Some people argue this politicizes trade relationships. That is true, but any trade policy short of total free trade politicizes trade. The Bush Administration has made public what has been for decades the behind the scenes reality of trade policy. The continued focus of the Doha Round has been on, Òa result that generates meaningful new trade flows and economic opportunities for citizens around the world Ð in agriculture, industrial goods and services.Ó

The Bush AdministrationÕs policy of melding trade policy with strategic policy has also been used in Africa and the Middle East. In Africa it has focused on trade capacity building and access to U.S. markets under the African Growth and Opportunity Act to help African countries catch-up in world trade. In the Middle East efforts have been on bilateral trade agreements and a Middle East FTA to encourage greater regional cooperation and integration.

Trade with Asian economies is vital to the long-term economic health of the U.S., and trade policy negotiations are a permanent activity operating at four different levels. The lowest level is in countries like Cambodia and Vietnam where the U.S. is building a trading framework based on rules that are already well established with other countries. The next level is with countries like China where two-way trade has developed rapidly in recent years and trade disputes abound. This involves resolving specific issues and filing WTO cases where disputes cannot be settled through talks. Under the Bush Administration 25 trade policy cases brought to the WTO have been resolved, with 24 of those in favor of the U.S., including two with China. Another four cases involving China are pending.

The third level of the trade agenda in Asia is with countries like Korea and Taiwan where trade is well established, economic integration of supply chains is evident and a middle class of consumers is driving market demand. The U.S.-Korea FTA is an example of providing substantial movement toward freer trade. The highest level of the agenda is with Japan where years of trade and trade policy negotiations have allowed the governments to address a range of issues that continue to restrict the free flow of goods and services.

The trade agenda does not ignore the long standing trade relations with the EU-27 and the rest of Europe. This is a $2.2 billion per day relationship that is a version of the U.S.-Japan relationship. The center piece of this effort is the Framework for Advancing Transatlantic Economic Integration established by the U.S. and EU in April of 2007 and a cabinet-level Transatlantic Economic Council that had its first meeting in November 2007. The U.S. is also working on WTO accession agreements with Russia and the Ukraine, including long-standing agricultural issues.

The trade agenda says little about the fact that trade is a two-way street. Imports are important to supply products and services not produced in the U.S. and to allow market forces to drive continued product improvements and lower costs. By not saying more about the benefits of imports for consumers in the trade agenda, the Bush Administration plays into the hands of the mercantilist who see trade as all exports and no imports. The agenda does note that according to the PresidentÕs Council of Economic Advisers only 3 percent of all job disruptions in the U.S. are trade related.

Regardless of the outcome of Doha and the Panama, Columbia and Korea FTAs this year, the new Administration will have a full trade agenda. Globalization of production and consumption will continue and the U.S. will benefit from increased trade. New regional trade agreements, which already number about 300, will be negotiated with or without the U.S., and existing agreementsÕ implementation and monitoring must be done by the U.S. to achieve the full benefits of more open trade.
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