Obama “has not signed one new free-trade agreement in the past four years,” Romney said in a speech yesterday at the Virginia Military Institute in Lexington, Virginia. “I will reverse that failure.”
Almost one year ago, on Oct. 21, 2011, Obama signed into law free-trade agreements with South Korea, Colombia and Panama. While the accords weren’t new -- they had been initiated and agreed to with those three nations under President George W. Bush -- Obama revised the deals to break a stalemate that had stalled ratification for four years.
Romney’s remarks are “campaign rhetoric, so you go right to the margin without being technically inaccurate,” said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics in Washington.
With 28 days left until the election, Romney is seeking to capitalize on his gains following his first debate with Obama last week. A Pew Research Center poll conducted in the days following the debate showed Romney leading Obama by 4 percentage points among likely voters. The trade comments were part of a foreign-policy address in which Romney accused Obama of being passive in the face of international challenges.
Jen Psaki, a spokeswoman for the Obama campaign, said Romney’s remarks are based on “an absurd premise.”
“The president renegotiated the trade agreements -- made them better for American workers, made them better for the American auto industry and the American meat industry -- and that’s why we not only got them through Congress, but the president actually signed them into law,” she told reporters traveling with Obama in California.
Putting a free-trade agreement into effect is a two-part process. First, the deal is signed with the other country, then the president must win congressional passage and sign into law the enabling legislation.
During the first two years of his term, Obama worked on overcoming objections to the deals from U.S. companies, including the Ford Motor Co. (F), and labor unions. The final pacts included new terms for auto tariffs from South Korea, a tax- information exchange with Panama and labor-rights assurances from Colombia.
While the bulk of the three free-trade agreements were negotiated under Obama’s predecessor, “there were some remaining small issues, but important issues, to get it through Congress,” Michael Moore, a professor of economics at George Washington University who also served in the Bush administration as an economist specializing in international trade. Getting congressional approval is “not a small thing.”
Final approval of the trade deals marked an occasion where Obama worked with Republicans in Congress to gain passage even as most House Democrats voted against them and the AFL-CIO labor federation continued to oppose ratification.
“What Obama did, slowly and not with a lot of enthusiasm, but he did finally do it, was send them to Congress for ratification,” Hufbauer said.
The South Korea deal alone is the biggest for the U.S. since the North American Free Trade Agreement in 1994. The U.S. International Trade Commission projects it will boost U.S. exports as much as $10.9 billion in the first year that it’s in full effect.
The centerpiece of Obama’s trade initiatives is negotiating agreement with eight Pacific nations called the Trans-Pacific Partnership. The current talks are with Australia, Chile, Peru and Singapore, all of which already have separate free-trade agreements with the U.S., as well as with Malaysia, New Zealand, Vietnam and Brunei.
Two-way trade between the U.S. and those eight nations totaled $171 billion in 2010, compared with $457 billion with China. Japan, which does $181 billion in trade with the U.S., also has expressed interest in joining the group.
Work on trade deals with major economies or multiple nations can span more than one administration. Negotiations for the North American Free Trade Agreement with Canada and Mexico began in 1986, under then-President Ronald Reagan, continued under President George H.W. Bush and weren’t finished until Bill Clinton took office. It was signed into law by Clinton on Dec. 8, 1993.
The U.S. probably could wrap up free-trade deals with smaller economies within a single presidential term, though getting those “notches in your belt” isn’t necessarily the best course, Moore said. Obama’s made a choice to pursue bigger agreements, primarily the Trans-Pacific Partnership. That initiative was begun under Bush and Obama has “greatly expanded the negotiations.”
“The T-PP would have a much bigger positive effect on the U.S. economy than having three or four agreements with smaller economies,” Moore said.
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