[Note to readers: This is the first of a four-part series this week on where President Barack Obama’s presently stalled international agenda is headed, looking to identify key decisions that the White House will have to make by the end of this year. These decisions, one way or the other, will either help expand presently shrinking trade flows, and thus promote enhanced global prosperity and job growth — or they will start throwing American workers out of their jobs.]

Half way through his first year in the Oval Office, Barack Obama’s (slowly emerging) international trade agenda remains stuck in the familiar Washington, D.C. political gridlock that the president inherited. The White House, preoccupied with other priorities like health insurance reform, has refused to go to the mat to obtain congressional passage of preferential trade deals with Panama, Colombia and South Korea that remain stalled on Capitol Hill. The Office of the U.S. Trade Representative is not presently conducting serious negotiations to bring the World Trade Organization’s Doha Round of multilateral tariff- and subsidy slashing to a successful conclusion. Rather, Ron Kirk, the president’s top trade negotiator, is first trying to see if he can build a domestic constituency that would support trade expansion. On June 23, Kirk — advancing a case that had been first developed by his predecessor in the George W. Bush administration, Susan Schwab — took China to the WTO’s dispute-resolution process, complaining that the Chinese have been restricting exports of key raw materials like coke and magnesium that US steel mills need to import. And on July 16, Kirk spoke to an audience of cheering steelworkers at a mill some 12 miles southeast of Pittsburgh, in which he offered rhetorical appeals aimed at bridging the gap between advocates and skeptics of free trade. But the wide gap remains. After Kirk spoke, one angry partisan free trader quickly fired off a mass e-mail that said that the Obama administration’s developing trade regime is “pathetic.”

Perhaps the critics ought to consider a little history before they jump to conclusions.

In late July, 1993, half way through his first year as president, Bill Clinton still didn’t really have a clear international trade agenda either. During his successful 1992 presidential campaign, Clinton had expressed ambivalence on trade (much like Barack Obama would do, although using decidedly sharper political rhetoric, in his own winning presidential race 16 years later). Finally, in August, Clinton decided to press for congressional approval of the North American Free Trade Agreement with Canada and Mexico, despite the vehement opposition of the AFL-CIO and the protectionist wing of the Democratic Party, including then-House majority leader Rep. Richard Gephardt and the number two House Democrat, Rep. David Bonior. Unimpressed with Clinton’s display of political courage, in October, 1993, then-minority leader Rep. Newt Gingrich pronounced that Clinton’s efforts to win Nafta approval were “pathetic.”

The abrasive Gingrich — hardly for the first time in his checkered career — was flat-out wrong. Clinton sure didn’t look so pathetic by Dec. 8, 1993, the day that Congress would approve Nafta, which went into force the next month. Now, the question that cannot presently be answered is whether, by the end of this year, Obama will have also shown his mettle to prove the critics wrong.

To understand why the Obama White House is currently in a very weak political position on trade, it’s necessary to look at a little history — to better understand where the last young Democratic occupant of the Oval Office succeeded, and where Bill Clinton failed.

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ELKTON, Va.—This story ends down in America’s Deep South, with a report on how a $3.7 billion foreign investment in Alabama that will create thousands of American jobs has sparked vigorous complaints from the US steel industry and the Steelworkers union that it is “unfair.” But it begins quietly on another note here in this pretty little Virginia community (pop. 2,212) nestled in the Shenandoah Valley nearly 100 miles southwest of Washington, D.C. Together, the two otherwise unrelated parts of this article illustrate that while trade liberalization — especially when tariffs are slashed in so-called US Foreign Trade Zones — is clearly beneficial to the US economy, free trade remains politically controversial.

At first glance, Elkton hardly suggests a shining success story that illustrates the benefits of international trade. The deep economic recession has (alas) come to the Blue Ridge mountains; Elkton’s local Chevy Pontiac dealership closed last month, for instance. But business here seems to be great for Merck & Co., the pharmaceutical giant that produces vaccines and medicines in 31 plants in 25 countries. Merck’s sprawling Elkton factory consists of more than 80 buildings that are scattered throughout 1,330 acres out on Route 340 South, about a mile and a half from downtown. It may look nondescript, but this is one of the company’s most important manufacturing locations anywhere. (Just past the plant is a Deer Crossing sign that is riddled with bullet holes, a reminder that folks here in America’s Bible Belt take their guns seriously.)

Merck first set up shop in Elkton in 1941, and now employs some 700 people who make medicines aimed at treating all sorts of evils: HIV, river blindness, Parkinson’s Disease, high cholesterol, glaucoma, and simple pain. There is a $250 million expansion going on, which is expected to add 70 people, possibly many more, to Merck’s roughly $60 million Elkton payroll. The expansion will boost Merck’s production of Gardasil, a cervical cancer vaccine, and is already boosting the fortunes of a long list of workers — some local, others who have come from places like Greenville, South Carolina — who are engaged in the construction: electrical suppliers, painters, carpenters, and so on. If you are looking for a successful American manufacturing plant, this is it.

And if you are looking for an example of how slashing tariffs helps create American jobs by reducing unnecessary costs of production, come to Elkton. Merck pays no US tariffs on the imported raw materials it brings in here through a so-called Foreign Trade Zone. Merck depends upon its duty-free imported chemicals to make its medicines.

So why would Merck executives — the plant manager here in Elkton, Merck’s lobbyists in Washington, D.C., and even one of the company’s official spokeswoman in Merck’s New Jersey headquarters — refuse repeated requests to talk about their success story? If free trade works to enhance your company’s international competitiveness, why not spread the word?

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