Capt. Kirk’s Enterprise


Investor’s Business Daily
Issues & Insights Section
July 17, 2009

Leadership: U.S. Trade Representative Ron Kirk pulled off quite a feat Thursday. In a speech in Pittsburgh, he led unions and business to common ground on trade. It may be a turning point.

For an economy with 9.5% unemployment, a meeting of the minds on trade can’t come too soon. Increased exports, as Kirk stressed, will mean “new jobs for American workers and new markets for American business.”

Speaking at an old steel plant, Kirk said the U.S. would focus on enforcing existing contracts with trading partners.

“We will take new steps,” he promised, “to protect the rights of American farmers and small-business owners. We will hold our trading partners to their word on labor standards. And we will use work we’re already doing to fight even harder for the men and women who fuel our economy and support their families.”

Enforcement won’t open new markets, but it will let trade’s most vehement opponents find something to like in long-stalled trade treaties.

Kirk’s plan is two-pronged. Legal action will be taken against violators that engage in protectionism, slave labor, counterfeiting and other dishonesty. And new lines of communication will be opened with commerce, agricultural and economic attaches at U.S. embassies to flag problems before they lead to job losses here.

This could lead to ratification of trade pacts that provide the biggest job gains. There are a lot of things to like about the plan: First, treaty compliance is not a controversial idea. Following contracts is already an essential element of free trade. Second, treaty compliance addresses concrete, definable problems, which makes them perfectly fixable. This contrasts with the panoramic and long-term demands for complete remodelings of societies as conditions for trade, as protectionists have demanded of Colombia. Tangible problems are solved more easily than existential questions, and this makes progress possible.

Third, Kirk’s approach is not a semantic trick that claims to be protrade but is really not. A perfect example of a semantic trick is a recent congressional package protectionist measure introduced in June and misnamed the “Trade Act.”

Pretending to be pro-business, the bill requires treaties to be rewritten with new protectionist and buy-American provisions. It also gives an increased role to unelected nongovernment organizations (NGOs).

Fourth, in looking at enforcement, the primacy of trade is reasserted, not the nontrade issues that NGOs dream up to hold trade hostage to their own agendas.

Fifth, it leaves enforcement where it belongs — with the professionals at the U.S. Trade Representative’s office, not in the hands of NGOs or unions, as the Trade Act requires. Regulatory enforcement is a legitimate job for bureaucrats, not political activists.

Enforcement isn’t all that big a problem. We don’t think Kirk will find that many violations. But it will give opponents confidence so that treaties with Colombia, Panama and South Korea have a fighting chance to pass. Free-trade treaties, unlike normal trade relations like we have with China, are enforced to the highest standards.

Will Kirk’s approach work? Yes, given the range of support it got Thursday. The Chamber of Commerce and National Association of Manufacturers cheered along with three Democrats with generally good records on trade — Reps. Charles Rangel of New York and Sander Levin of Michigan and Sen. Max Baucus of Montana.

The big surprise was Leo Gerard, president of the stridently protectionist United Steelworkers Union. He called Kirk’s speech “a new era in trade policy that renews our nation’s commitment to enforcing the rules and fighting for the interests of working people.”

His shift could bring other unions around. When it does, Congress won’t be far behind. And neither will be the jobs our country needs.

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