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Issue #592

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2014 Media Kit

Budget trumps trade

By: | at 08:00 PM | International Trade  

On a day when the future of global trade talks was widely reported to be in jeopardy, President Bush nominated the respected US Trade Representative to serve as his new budget director. The move and timing don’t bode well for the Doha round of negotiations, even as they underline the crucial political role played by the deficit-plagued US budget this election year.

Rob Portman, if confirmed by the Senate, will succeed Josh Bolten, the Office of Management and Budget chief recently shifted to head the White House staff and charged with the task of helping to elevate the Bush presidency from its current political nadir. Portman was considered a strong choice for USTR when he was appointed last year in part because of his closeness to the Bush family - he served in the first Bush White House - and the respect he earned on both sides of the aisle when he served on the Budget and Ways and Means Committees in Congress.

The knottiest trade problems, for both the US and its negotiating partners, deal with the likes of farm subsidies and manufacturing tariffs - issues of such resounding domestic importance that a good working relationship with Congress was a must.

In contrast to Portman’s high profile, he will be replaced as USTR by one of his three deputies, Susan Schwab. Moreover, as the International Herald Tribune reports, US officials weren’t able to say when Schwab - a seasoned negotiator with expertise in agricultural issues and intellectual property rights - would be able to meet with other trade ministers, including her most important counterpart, the European Union’s Peter Mandelson. Mandelson himself characterized the switch as ill-timed, suggesting that the already foundering talks were now further set back. “At this stage in the round, it would have been easier to manage with” Portman still in place, he said in a statement. The Financial Times called the appointments a “downgrading of trade policy in the administration’s second term,” and quotes a leading Republican strategist as saying: “There is a sense of giving up on bilateral trade deals and on Doha.”

Trade ministers had been scheduled to reconvene in two weeks, but only if they met an April 30 negotiating deadline that the FT and The Wall Street Journal reported in doubt just hours before Bush’s announcement. Sen. Charles E. Grassley, R-Iowa, chairman of the Senate Finance Committee, which oversees trade policy, tells the Washington Post, “If there’s not a major breakthrough within the next 30 days, I don’t think it makes much difference who is trade representative.” He argues that Portman is “very much the kind of person we need as an OMB director.” Or as Claude Barfield, a trade specialist at the conservative American Enterprise Institute tells the Post, “For this administration, it is important to get its act together, and that trumped the WTO negotiations.” (Dow Jones & Company, Inc.)