The president wants other countries to embrace free trade, while defending tariffs for domestic textiles.

Trade officials from nine dynamic Asia-Pacific economies begin 10 days of talks today in Dallas, Texas, hoping to finalize the Trans-Pacific Partnership pact by the end of this year. President Obama has said the deal will be “a model not only for the Asia-Pacific but for future trade agreements.” Perhaps, but the president’s ambitious Asian agenda has run smack into protectionist lobbying back home.

The White House is demanding TPP partners, chiefly Vietnam, agree to new rules that would bring transparency and market-oriented efficiencies to their inefficient (and often corrupt) state-owned enterprises. SOEs are indeed a drag on Vietnam, comprising around 38% of the economy. Prime Minister Nguyen Tan Dung has struggled with the problem for years with little result.

Though the U.S. is pushing Vietnam to help itself by reforming SOEs, Hanoi wants something in return. The country is America’s second-largest supplier of clothing, and Mr. Dung’s trade negotiators insist the U.S. get rid of high tariffs on clothing and footwear, which generally range from 18% to 36%.

This is a chance for Mr. Obama to live in a “21st century economy,” as he often says. Unfortunately, he seems to be caught in 18th century mercantilism.

The American president is in tight with the U.S. textile lobby, which supported him in 2008. The industry has benefited from high tariffs and various protectionist schemes since the 1700s. So U.S. trade negotiators have taken a hard line against liberalizing the U.S. rag trade. The Vietnamese know a double standard when they see one, and are incensed. No deal on market access for us, no deal on SOEs, they say.

New Balance’s “Made in America” shoes are mostly made in Asia.

Here’s how the debate plays out in Washington. On the “21st century” side are the mainstays of the American economy. Giants like Boeing, General Electric, Intel, Microsoft, New York Life, Citi and Federal Express strongly support a TPP that would write new competition and transparency rules for Asian government-run corporations. Opposing the TPP deal is one shoe manufacturer in New England that employs about 1,200 Americans, New Balance Athletic Shoe, and a handful of mid-sized textile manufacturers in the American south.

The giants of American manufacturing and finance, which have major offshore operations, can’t get serious consideration from this White House. Mr. Obama—the “Buy American” candidate—stands behind any company like New Balance that vows to keep jobs at home.

New Balance’s advertising boasts that it remains “the only athletic shoe manufacturer still making shoes in the U.S.” It has five factories in Maine and Massachusetts run by a handful of dedicated American workers who are fearful that getting rid of protective tariffs would throw them out of work.

But behind the pro-American propaganda is a harder economic truth. New Balance makes 75% of its shoes in places like Indonesia and China, even some in Vietnam. The remaining 25% come from the New England factories. But most of those sneakers aren’t really “Made in America,” but “Made in the U.S.A. of Imported and Domestic Components,” as the technical label reads. To be the former, at least 70% of the sneakers must be made from components sourced domestically. Company officials declined to comment or provide a detailed breakdown of their Asian-made components.

This much is clear: New Balance imports shoe parts from Asia and then has their American workers glue the shoes together. Without imported components, the American workforce couldn’t make shoes at a competitive price.

Why is New Balance against giving Hanoi trade concessions? Its operations in Vietnam are tiny compared to elsewhere in Asia. But tariff cuts would give a big boost to its competitors, Adidas and Nike, which have significant footprints in Vietnam.

The company’s patriotism feels even flatter if you consider Nike and Adidas, which unashamedly manufacture their footwear in Asia, together employ some 27,000 Americans. This highly paid workforce in marketing, logistics, design and advertising is 22 times New Balance’s American presence.

Not that New Balance is alone in putting phony nationalism ahead of free trade. The National Council of Textile Organizations, whose members are mostly mid-sized textile producers in the American south, has persuaded the White House to insist that all TPP partners agree to “yarn-forward rules of origin” for their clothing and footwear exports.

This means TPP signatories will only qualify for tariff concessions for their exports to the U.S. if they buy their yarns and fabrics from TPP member countries. Translation: The yarn-forward rule of origin would require clothing exporters like Vietnam and Malaysia to buy American, not Chinese fabric.

This mirrors requirements American officials have inserted into preferential trade pacts with Latin America, which has propped up niche markets for the U.S. rag trade. Similar stipulations the U.S. has obtained in other trade pacts, notably with Singapore and Australia, have protected the Latin niches, while not expanding the U.S. rag trade across the Pacific.

To be fair, Mr. Obama also is hardly the first U.S. president to bow to domestic textile interests. But with the TPP, he’s demanding America’s trading partners summon the political will to dismantle their protectionist rackets. As long as he’s unwilling to do the same, we shouldn’t expect much progress toward this trade agreement.

Hillary Clinton’s arrival in Indonesia today is a significant event for the Southeast Asian nation. Barack Obama has pledged to restore America’s image abroad, and Indonesians have greeted that pledge with particular optimism — after all, Mr. Obama lived for four years as a child in Jakarta. A strong relationship is in everyone’s interest, especially since Indonesia is the world’s largest majority-Muslim democracy. Yet Mrs. Clinton will find that one major issue is clouding this spirit of hopefulness on both sides: protectionism.

There’s more than enough blame to go around here. After China, Indonesia is probably the country most likely to make U.S. trade officials livid. Indonesia has long been afflicted with economic nationalism, and protectionist sentiment has been on the rise in the wake of the global financial crisis. A new mining law gives preferential treatment to state-owned enterprises. A lengthy “negative list” closes, or strictly limits, foreign investment in important sectors of the Indonesian economy: hospitals, courier services, telecommunications, and many more. Indonesia’s health ministry recently decreed that pharmaceutical companies must either manufacture their drugs for the Indonesian market in Indonesia, or partner with a local (politically connected) licensee — a step that would disrupt global supply chains.

As for the Indonesians, when they look across the Pacific they also sometimes see the ugly face of protectionism. Indonesians can point to the Buy American provisions in Mr. Obama’s economic stimulus bill that require the use of U.S.-made steel in highway construction as a worrying sign. President Obama has pledged to resist efforts to enforce Buy American regulations that would violate America’s World Trade Organization commitments, but experienced legal observers are looking for the fine print.

And more fundamentally, when many Indonesians look at how they are treated by the Americans on trade, they, like many other U.S. trading partners, see evidence of a double standard. Specifically, Indonesians point to high, discriminatory U.S. tariffs on important Indonesian exports like tuna, clothing and shoes; complain about harassment by customs officials at U.S. ports of entry; and worry about moves in Congress to bar import of clove cigarettes, a major Indonesian export, that would seem clearly to violate WTO rules. In short, restoring America’s image in Indonesia is going to require more than a visit from Mrs. Clinton, although she’s making an important start.

By far the most unfair U.S. trade practices are the high tariffs on clothing and shoes, which can range from “only” 8% to an extraordinary 30% — or even twice that in some cases. Last year, Indonesia’s exports of clothing and shoes to the U.S. were valued at $4.6 billion, and were subject to tariffs of $790 million. By contrast, high-tech products that wealthy European countries export to the U.S., like airplanes and telecommunications equipment, face minimal American duties. The total value in 2008 of all products exported across the Atlantic by Britain and France was $101 billion — and that resulted U.S. tariffs of $790 million too. Clearly the Indonesians are getting a raw tariff deal. As Edward Gresser of the Progressive Policy Institute, a pro-trade, centrist-Democratic think tank in Washington, points out, the high shoe- and clothing tariffs are not only “regressive, but they impact poor women in countries like Indonesia, and poorer American shoppers, the hardest.”

And there’s much more. Consider that the U.S. subjects Indonesia’s canned tuna to a 12% tariff — but canned tuna that is processed in Australia is duty free, thanks to the U.S.-Australia preferential trade deal. That Australian tuna often spawns in Indonesian waters.

In other cases, Indonesian exporters are falling victim to congressional arbitrariness. Congress is considering a move that would bar the sale of Indonesia’s famous clove cigarettes in the U.S. as part of a broader ban on flavored cigarettes. This is billed as a health measure, especially since clove cigarettes have become a teenage fad in America. But thanks to lobbying from domestic industry, American-made menthol cigarettes would be exempt from the flavored-smoke ban. This kind of special exemption for domestic producers most likely runs afoul of America’s WTO commitments. Indonesia’s ambassador to Washington, Sudjadnan Parnohadiningrat, notes that hundreds of thousands of Indonesian farmers and workers are employed in the clove-cigarette industry. No wonder he says “We do not want our products discriminated against.”

All of this certainly colors Indonesian perceptions of America. And the difficulty of trading with America certainly has an impact on Indonesia’s economic development, which will become only more pronounced as the worldwide economic slowdown drags on. The U.S. has a critical interest in a prosperous, free Indonesia. As she travels through Asia this week, Mrs. Clinton would do well to pay careful attention to what her counterparts tell her about the effects of U.S. trade policy on their economies, and about how that trade policy alters their views of American economic leadership.

A three-judge World Trade Organization panel has ruled America’s method for taxing shrimp imports out of line with the country’s WTO obligations. What happens next will say a lot about the credibility of American leadership in promoting free trade.

The new WTO ruling is the latest twist in a politically charged case involving some $2 billion in annual shrimp exports to the U.S., counting not just India and Thailand — the two countries pressing the current litigation — but also China, Vietnam, Brazil and Ecuador. Three years ago, the U.S. Commerce Department slapped punitive duties ranging from 4% to 113% on shrimp from the six countries, alleging that they had been “dumping” their seafood delicacies in the U.S. at “unfairly” low prices.

That move was bad enough. But then U.S. Customs officials made matters worse by rolling out a novel accounting trick. Customs decided that shrimp imports from the six involved countries would be subject to a newfangled policy concoction called “continuous bonds.”

In practice, that meant that an importer who planned to bring in, say, $100 million annually in shrimp subject to a 6% antidumping tariff would normally be required to post a $6 million cash deposit to cover the expected duties. On top of that, the importer would pay a $50,000 surety bond as “insurance” that payment can be made, in case import duties — which can subsequently be raised or lowered by Commerce officials — exceed the expected amount that year. Such bonds are backed by credit lines extended by the duty payer’s banks.

But the new continuous-bond policy morphed the traditional $50,000 bonds into a bond equal to the expected-duty deposit over again — meaning in the example above a bond of $6 million, in addition to the $6 million cash deposit importers already had to put up. While Customs was aiming at foreign exporters, the agency ended up squeezing the American importers who normally pay the duties.

For importers, the continuous bonds have been a continuous nightmare. They’ve been forced by lenders to scramble to obtain enormous annual credit lines, secured by putting up a portion of their businesses as collateral. Whether or not the importers end up having to borrow against their credit lines, the burdensome bonds constrain their ability to raise capital to re-invest in their businesses, as assets against which they could ordinarily borrow are already tied up. Predictably, some U.S. shrimp importers have been forced to exit the business, as their credit lines have been over-extended.

Customs officials justified the new policy — which was announced without official prior notice in the Federal Register, and thus with no opportunity for affected importers to comment publicly — as necessary to prevent possibly shady shrimp importers from failing to ante up duties when they are calculated at year’s end. Such evasions had occurred in previous antidumping cases involving Vietnamese catfish and Chinese crawfish.

But when the National Fisheries Institute, whose members import some 80% of the seafood that Americans eat, challenged the Customs’ paperwork burdens in the New York-based U.S. Court of International Trade, evidence of unsavory political calculations surfaced. Citing the agency’s internal documents, U.S. Judge Timothy Stanceu found that Customs officials had been motivated “by domestic political pressures to take action directed against the shrimp importing industry.” The bureaucrats had calculated that lawmakers from shrimp-producing states wielded more influence on important congressional committees than did representatives from shrimp-importing states. Despite that finding, the case is still wending its way through the federal courts.

Meanwhile, India and Thailand pursued their own claim against the U.S. at the WTO. Last Friday, they prevailed, when a three-judge dispute panel declared the continuous bonding policy inconsistent with America’s obligations as a WTO member. The U.S. will likely appeal the finding.

Better, though, to comply with the decision by dropping the burdensome bond sham. When the U.S. prevails in WTO litigation, Uncle Sam expects the foreigners to comply forthwith. Now, Asians are asking that American officials do the same. Doing so would enhance America’s credibility both in the WTO’s dispute-resolution system and at the negotiating table for further trade liberalization, not to mention the benefits to America’s own shrimp importers and consumers. Surely, U.S. trade policy has bigger shrimp to fry.