Near Confirmation, U.S. Trade Nominee Doesn’t Have Deal Fever

10 March 2009 By Matt Herrick Staff Writer

Washington — Ronald Kirk, a former Democratic mayor of Dallas, cruised through a Senate confirmation hearing March 9, advancing one step closer to becoming the nation’s first African-American U.S. trade representative.

In discussing how he would carry out the role if confirmed, Kirk promised to bring greater social accountability to the U.S. trade agenda. He said that pending free-trade agreements (FTAs) with South Korea, Panama and Colombia must reflect the plight of displaced American workers, as well as the stability of natural environments and organized labor in those countries.

Kirk’s candidacy as the country’s most powerful trade official had been plagued by his failure to pay income taxes in full, an issue which has sunk other high-profile nominees in President Obama’s nascent administration. But at the Senate Finance Committee hearing, Democratic chairman Max Baucus, along with Republican committee members Charles Grassley and John Cornyn, suggested that any concerns about the tax issue had been allayed because Kirk had recently paid his back taxes.

Kirk — mayor of the third-largest city in Texas from 1995 to 2002 — outlined trade plans that break sharply in some areas with his Republican predecessors’ pro-trade agenda — an agenda that led to 12 free-trade agreements. Although he promised to strike a balance between improving foreign market access, enforcing global trade rules, and controlling access to U.S. markets by competitors, Kirk largely struck a tone intended for the domestic rather than global audience.

“I think we all recognize that the overarching benefits of trade are difficult to appreciate when a plant closes in a small community because of increased foreign competition,” he said.

But when the pending trade agreements were raised individually by committee members, Kirk sounded more conciliatory.

With regard to the Panama deal, Kirk said “it’s the closest” to becoming law. With Colombia, he sees “great opportunity,” although U.S. organized labor is against the pact. In an April 2008 statement, with the Colombia deal stalled in the U.S. House of Representatives, AFL-CIO President John Sweeney said, “There should be no vote on the U.S.-Colombia FTA until Colombia ends the violence against trade unionists and assures they can exercise their basic rights without fear.”

Since that time, there has been no vote.

Outside the committee chamber, members of U.S. organized labor and environmental groups voiced displeasure with pending and enacted agreements alike, including the North America Free Trade Agreement, which Obama suggested, during his presidential campaign, the United States should renegotiate.

Meanwhile, the global economy continues to shrink, and trade is adversely affected: Trade financing is harmed and consumption is down. U.S. imports and exports have declined since July 2008, when they reached highs of $2.5 trillion and $1.84 trillion, respectively, according to Gary Hufbauer, a senior fellow and trade-policy specialist at the Peterson Institute for International Economics in Washington. Hufbauer noted that all major economies are importing less.

In a sign of dropping consumer demand around the world, China’s government reported March 10 that its consumer price index — the average price of goods and services bought by consumers — fell 1.6 percent in February from the same time last year.