Bridges Weekly Trade News Digest • Volume 10 • Number 14 • 26th April 2006
Portman To Leave USTR; Some See Reshuffle As Blow To Doha Round
US Trade Representative Robert Portman will step down to become the next White House budget director, President George W. Bush announced on 18 April. Deputy USTR Susan Schwab has been nominated to replace Portman, whose imminent departure is viewed by some as yet another blow to the precarious Doha Round negotiations.
The move comes as part of a broader shakeup within the Bush administration, whose approval ratings are at record low levels in opinion polls. Pending Senate approval, Portman will take over the Office of Management and Budget, the body responsible for preparing the president’s annual budget proposal to Congress, which establishes spending limits and priorities for the upcoming year.
Schwab, who began her career in the 1970s as an agricultural trade negotiator, is widely recognized for her technical expertise and skills. However, she lacks the political connections that Portman forged over his twelve years in the House of Representatives — ties that helped him secure Congressional support for trade deals during his tenure as the country’s top trade negotiator.
Several observers interpret Portman’s transfer as a sign that the US believes that a successful conclusion to the Doha Round is unlikely, and has decided to focus its efforts elsewhere. "That the White House sees little need for a heavyweight in the trade job suggests it is skeptical about the Doha Round, reluctant to push controversial bilateral deals and in no mood to try to convince Congress to extend the Trade Promotion Authority, which expires in June 2007," wrote The Economist.
Another observer, however, suggested that Portman’s move might actually end up enhancing the profile of the multilateral trade talks in Washington, since it would place a strong pro-Doha Round voice at the heart of US policymaking.
Nevertheless, many governments were lukewarm to the change, pointing in particular to the fragile state of the ongoing WTO negotiations. EU Trade Commissioner Peter Mandelson captured the general overtone when he said. "We will of course manage without him, but at this stage in the round, it would have been easier to manage with him. In his short — eleven-month — tenure as USTR, Portman had won praise for his political savvy, persistent deadlock in the talks notwithstanding.
Portman, for his part, told the media on 26 April that his succession would be a "seamless transition," pointing out that the rest of the US’ trade team was staying in place, including WTO Ambassador Peter Allgeier and Deputy USTR Karan Bhatia. In response to comments about Schwab’s supposed lack of Congressional clout, he said that she had more experience on Capitol Hill than any past USTR nominee apart from himself.
Even though WTO Members agreed on 24 April that they had not made enough progress in the negotiations to warrant summoning trade ministers to Geneva at the end of April to try to strike a deal on modalities for subsidy and tariff cuts (see related stories, this issue), Portman, who expressed regret that the ministerial-level meeting had been called off, announced that he and Schwab would nevertheless travel to the Swiss city at some point "early next week" to meet with trade officials there.
Trade officials indicate that a great deal of work needs to be done in upcoming weeks. WTO Director-General Pascal Lamy has long emphasised the need for the EU to make concessions on farm tariffs, the US on domestic farm subsidies, and the G-20 on industrial tariffs. One Geneva-based developing country trade diplomat suggested that the extent to which the US engages on domestic support would be a valuable barometer of how seriously they are taking the negotiations in the post-Portman era.
A date has yet to be set for Senate votes on the two nominations. Portman has indicated that he expects to leave the trade job within two to six weeks.
"US step stirs doubt on global trade talks," INTERNATIONAL HERALD TRIBUNE, 19 April 2006; "Hopes for Trade Talks Dim After Personnel Switch," WASHINGTON POST, 19 April 2006; "Trade official nominated to be next OMB director," GOVEXEC.COM, 18 April 2006; "US reshuffle signals downgrading of trade policy," FINANCIAL TIMES, 18 April 2006; "Changes raise doubts on US commitment to Doha trade talks," FINANCIAL TIMES, 18 April 2006; "Portman part of inner circle," CINCINNATI POST, 19 April 2006.