Investor’s Business Daily
Issues & Insights
August 11, 2009
www.investors.com

Diplomacy: At the "three amigos" summit of North American Free Trade Agreement partners, President Obama called for a new tone. But what’s really needed is for actions to match his tone.

President Obama began to sound like a statesman at the annual presidential summit of Mexico, Canada and the U.S. in Guadalajara. Addressing trade first, he recognized the true rationale for this fortuitous meeting of neighbors.

"We reaffirmed the need to reject protectionism," he said at the conclusion of the two-day talks. "We recommitted ourselves to the infrastructure investments, the common-sense regulations and intellectual property protections upon which trade thrives. As we work together toward lasting prosperity, we need to expand that trade, not restrict it."

The words were perfect, but the tone was little changed. It merely echoed the original mission of NAFTA, which at $621 billion in 2008 is the world’s greatest trade bloc. It sounded right coming from President Obama because it was consistent with the stances of President Clinton, who launched NAFTA, and President Bush, who carried it forward.

If there was any change of tone at all, it was from Obama, whose statements Monday effectively scrapped his own protectionist electoral campaign rhetoric. But the right words don’t mean all’s well.

Unlike Clinton and Bush, Obama has yet to put his words to action. At this summit, the big issue was growing protectionism as economies face recession. The worst of it is coming from the U.S.

It’s not that Obama supports the protectionist nonsense coming out of Congress — from broken U.S. treaty obligations to economic nationalism that would make Smoot and Hawley beam.

In fact, he disavowed explicitly the protectionist "buy American" provisions in the stimulus package, telling a reporter he didn’t want to see them there at all as he signed off. But he’s spent zero political capital on delivering a message to Congress that the protectionist rubbish has got to go. This includes:

• A "Buy American" stimulus proviso to shut out Canadian and Mexican companies on large projects.

• denial of Mexican truck access to U.S. roads, triggering $2.4 billion in retaliatory tariffs.

• The stalling of free trade pacts with Colombia and Panama that complement NAFTA and fortify Mexico in its drug war.

Saying the right things but not following up with action suggests Obama is hiding behind Congress, a group that in its public discredit is hardly too powerful for a popular president to take on.

All U.S. presidents since Hoover have opposed protectionism. Obama’s chance to make NAFTA the great global economic power bloc in counterpart to the European Union, the Asian Tigers and the emerging powers of China, India and Brazil can only be done by strengthening trade in this freest of all trading blocs.