21 Dec 2012
- The granting of the Permanent Normal Trade Relations (PNTR) status to Russia by the US last week is probably the most significant US trade policy development in a year when the Obama administration has offered little to domestic business constituencies in terms of proactive market opening abroad.
- The key test of the Obama administration’s willingness to open up a major new front in trade policy in 2013 will be the idea of a Trans-Atlantic Free Trade Agreement, which is now being promoted assertively by the EU and has some support from US business. Such a negotiation is politically attractive, but likely to be practically hard to deliver at any depth.
- More widely, there are two big factors pushing against a revived US trade liberalisation agenda. The first is disenchantment with the WTO. The second is a faltering domestic political consensus on free trade that makes and renewed FTA agenda a potential vote loser with both Republican and Democrat voters.
- Politically, as in the EU and elsewhere, the focus is likely to be on export promotion as a cure for unemployment and manufacturing decline. But the same politics that are driving the export push are also restricting the scope for selling voters the difficult prospect of import competition. How a room full of ‘export promoters’ reach a meaningful trade deal is pretty much the big political question hanging over global trade policy.
The views expressed in this note can be attributed to the named author(s) only.