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Mission: Impossible?
Rob Portman tries to navigate the trade shoals.
by Irwin M. Stelzer
04/11/2006 12:00:00 AM

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ROB PORTMAN has a tough job. As United States Trade Representative he does have the rank of ambassador and a staff of over 200 (considered tiny by the standards of Washington's bloated agencies). That, and the fact that he is siding with the angels by fighting for freer trade, must be a comfort on a cold night after wearying negotiations with developing countries, some of whose grievances he knows to be legitimate, and with his E.U. counterpart, Peter Mandelson, ever-ready to, er, reinterpret the meaning of his most recent concessions.

Portman, mild-mannered and not given to hyperbole, characterizes the current trade environment as "a challenging time." He knows that the global Doha round is in serious trouble. If a deal cannot be struck by July 1, 2007, the president's authority to put it to Congress on a take-it-or-leave it basis will expire, and with it the chance for congressional approval.

Two of the stumbling blocks are agriculture and services. President Bush has offered to eliminate all trade-distorting agricultural subsidies if America's trading partners will do the same. That has been greeted by the European Union, with France in the lead, with as much enthusiasm as French students have for private-sector jobs that don't promise life-time employment. Worse still, Mandelson has presented that position to Portman as non-negotiable. That leads Rep. Bill Thomas, a staunch free trader and ally of the president in his fight to open markets, to conclude that the U.S.-E.U. differences are irreconcilable, "and when you have irreconcilable differences the best
thing you can do is call it [the Doha round] off."

Services, which include everything from finance through lawyering and insurance, are one of America's strongest export sectors. In documents released last week Portman points out that the United States runs a $56 billion surplus in trade in services despite barriers erected by developing countries, and that liberalization of such trade "could account for fully 72 percent of the economic gain from the Doha round." But the developing countries are about as ready to open their insurance and other markets as the French are to abandon agricultural protection.

Although he still hopes to salvage the global Doha round, and the Australians are trying mightily to help him do that, Portman knows that his best hope is to concentrate on bilateral rather than broader, multinational, agreements. So he is relying on individual deals with countries that account for 54 percent of U.S. exports. With good results: exports to those countries that have signed on have grown at twice the rate of exports to the rest of the world. More such deals are in the works, with countries ranging from Peru to Malaysia to Panama to Korea and--surprise--with the United Arab Emirates, home of Dubai World Ports.

That Portman can make such progress is a testimonial to his negotiating skills, and not only with America's trading partners. Nipping at his heels are environmentalists, who worry more about fish and forests than about the economic growth that freer trading brings (and on which environmental preservation ultimately depends) and trade unions, who disguise their protectionism by professing concern for the working conditions of laborers in Asia and Central America. The unions would have us stop trading with countries that fail to adopt the high-cost U.S. standards that are inappropriate to their circumstances and would surely make most developing countries uncompetitive in world markets.



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