5th November 2008
How will Americans’ vote for change affect trade?
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After a nearly two-year presidential campaign, Americans yesterday overwhelmingly elected Senator Barack Obama as their President-elect in what has been called one of the most historic races in US history. While the inauguration of a new president clearly has a significant impact on the US, it also has an enormous bearing on the world. Specifically, what does this mean for global trade?
President-elect Obama has pledged to move ahead with the WTO Doha Round with the aim of concluding an agreement that would increase US exports, support job creation in the US, and help to advance the development of the world’s most vulnerable and poorest populations. Obama has also argued that the US needs to be more aggressive, however, in pursuing cases in the WTO where countries violate trade rules that negatively impact US goods.
The President-elect has also vowed to strengthen the rules-based multilateral trade system and to revamp “fast track” trade negotiating authority so that the now Democratic-led Congress has a greater role in free trade agreements. As for the North American Free Trade Agreement—an often hot topic during the Democratic primary campaign and into the general election—President-elect Obama has committed to working with Canada and Mexico to strengthen enforcement of environmental and labour protections in the pact.
Specifically where labour and the environment are concerned, Obama believes that all trade agreements, including in the WTO, must commit to binding obligations that recognise core labour standards set out by the International Labour Organization (ILO). He also wants to add provisions in agreements that prohibit countries from gaining a competitive advantage with practices that are environmentally destructive.
Concerning pending free trade agreements between the US and countries such as Columbia and South Korea, the President-elect has expressed concern and noted a number of areas in which adjustments are needed before Congress can vote on a final agreement.
Between now and 20 January, when Obama is inaugurated, he and his staff will focus on building their cabinet and working together with the newly elected Congress and Senate to outline the road ahead. But it is only in the coming weeks, months, and years that a greater understanding of the potential impact that an Obama administration will have on world trade, the environment, and other urgent global issues, will emerge.
To view President-elect Obama’s acceptance speech, click here.
One response to “How will Americans’ vote for change affect trade?”
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This is an intersting piece of works. However, allow me to make the following comments.
Even if Obama’s administration has secured the fast track authority and went ahead to push the Doha Development Agenda, the U.S. will need to give up some of its “social agenda”, and soften its negotiating stand on other protective issues such as agriculture. Issues such as labour and environment have been very problemtic in the WTO and generated much conflict between developed and developing countries. Labour issues are already dropped from the multilateral negotiations since Singapore Ministerial. There is much disagreement on environmental issues. Thus, bringing such issues back to the agenda of the WTO, is like brining dead issues to live again. This will only harm the very slow progress made in the WTO.
Also, although the U.S. might seem as if it is pushing the EU ahead for stronger liberalisation in agriculture, I think the U.S. itself is not sincerely pushing hard enough to make such liberalisation. Both the EU and the U.S., as well as other developed countries such as Japan, Canada, and Australia need to show more enthusiasm for greater multilateral trade liberalisation on agriculture.
What really worries me more is that the U.S. does not seem to be believing in the multilateral trading system. It has found the FTAs to be better tools than the WTO as its economic-trade-social agenda can be more easily incorporated and adopted by different countries around the globe. It is not clear whether Obama’s administration will pursue WTO approach or continue with the FTAs bilateral rout. Some might argue Obama might pursue both approaches, but I think that will only jeoperdise the DDA further. This is basically because the FTAs are contradictory system from the WTO and will never help the WTO move forward.
PhD student (Durham University- UK)