George Mason University

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President Obamas Trade Policy Balancing between
protectionist pressures and open-market
ideals Presented by Brian Adams Solaiman
Afzal Junaid Abu

• George Mason University
• ITRN 603 002
• Professor Stuart Malawer
• 2 December, 2009

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The two sides of President Obamas trade policy
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Sanction Categories
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The Presidents legal backing for sanctions

• The U.S. Constitution (Article 2 Section 2)
• The International Emergency Economic Powers Act
  (IEEPA)
• The National Emergencies Act
• The United Nations Participation Act of 1945

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Obama Sanction Outlook

• Less sanctions on sponsors of terrorism
• More pressure from labor for protectionist
  sanctions
• Expend political capital to support multilateral
  trade (the completion of Doha Round negotiations.
  

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Obama supports the completion of Doha Round
Negotiations
Barriers Enablers
U.S. Agricultural Lobby Better relationship with India and China
Labor The U.S. Export Industry Lobby
Continued weak economy Economic growth
The Democratic Party The Republican Party
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President Obamas Trade Policy

• Rules-based trading system
• Social accountability and political transparency
• National energy and environmental goals
• Trade agreements address unresolved trade
  frictions
• Trade agreements and Bilateral investment
  treaties
• Strong partner to developing countries

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Global trade and Economic downturn
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The rule based system and current global economic
downturn

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Antidumping cases
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Stimulus Package and Trade

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Overview of Obama and China

• As presidential candidate, Barack Obama wanted
  to punish China for manipulating its currency to
  boost exports. (The Economist)
• Tire Tariffs
• Trade Dominates the current Relationship
• First Pacific President

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Major Problems.

• How tough will Obama be in regards to China
  currency manipulation which gives them a trade
  advantage?

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Legislation

• September tire sanctions He said he wants to
  "further expand trade" by showing the world that
  the US will credibly enforce its own trade rules.
  One of those rules is a specific legal provision
  that allows a president to block surges in
  Chinese imports if they simply disrupt an
  American industry.
• Obama's reasoning in furthering trade through
  tariffs may sound like doublespeak, but that
  provision, known as Section 421 of the Trade Act,
  was actually agreed to by China when it joined
  the WorldTrade Organization (WTO) in 2001.
  (Christian Science Monitor)
• This claim is widely disputed
• based on their negotiations with the Clinton
  Administration on Section 421, China expected
  this tool to be used, if ever, only in the rarest
  and most exceptional of cases. (John Veroneau )

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Tire Sanctions

• In the cover of the night
• The US tire manufacturers are against the tariff
• Tariff means US consumers will pay more for
  tires.
• China response

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Obama abroad in China

• Medias Nothing Narrative
• Potentially easing trade tensions
• Who knows?

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One Issue

• Is Obama going to continue to maintain the US
  role as the dominant force on behalf of global
  (free) trade?

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Clues

• Obamas political allocation towards trade
• Campaigning against NAFTA
• The potential for global protectionist
  backsliding
• The lack of progress on negotiations on three
  regional trade deals.
• Ron Kirk
• Trade and the US Image

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Verdict?

• it doesn't look like he is planning a big new
  drive on Doha or global trade - his statement on
  trade made no reference to the fact that world
  trade is collapsing." (Adam Posen of the Peterson
  Institute)
• So, in President Obama first term it appears
  Global Trade is going to need a new leader.
• Will Obama policies continue to reflect
  ambivalences, leadership, or protectionism?

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Sources

• The Economist
• Christian Science Monitor
• Whitehouse.gov
• Financial Times
• Petersen Institute for International Economics
• WTO
• World Bank
• Imf