This is the third of four articles in a series on how President Barack Obama’s trade agenda is shaping up. Today’s report focuses on one key decision that the president will have to make personally. Obama is being asked by the United Steelworkers union to decide by mid-September to roll back imports of automobile tires from China. The US International Trade Commission recommended last month that the president slap on stiff 55% tariffs on the Chinese tires, which would almost certainly knock them out of the US marketplace (the tariffs would decrease to 45% next year, and to 35% in 2011, when the plan would end). On Friday, the office of US Trade Representative Ron Kirk will hold a public hearing on the matter, after which Kirk will send his own advice to the White House. For the steelworkers, who worked overtime to help put Obama in the Oval Office, it’s looking like Payback Time.

But for the president, it’s not so simple. Obama’s political problem is that the US statute he must apply requires him to consider the broader American national economic interest, not just the narrower interest of the steel lobby. The bottom line: Given the basic economic forces that are driving the global tire industry, it appears highly unlikely that any trade restraints on Chinese tires would save more than a handful of American steelworkers’ jobs. But it is likely that such tariffs or quotas would also throw thousands of other Americans out of work. The steelworkers are loathe to acknowledge such unpleasant economic facts of life. But some of the threatened jobs would obviously involve members of other unions, including longshoremen who earn their paychecks by unloading cargo at US ports of entry, and teamsters who deliver the tires to well-known US retail outlets like Tire Kingdom and Merchants. Meanwhile, the steelworkers express no sympathy for the the jobs of the non-union workers who sell tires to American consumers — workers who could be collecting unemployment checks by Christmas. In the USW’s eyes, such Americans are traffickers in goods from communist China, and shouldn’t have their jobs in the first place.

Apart from the high economic and political stakes, this case has raised ethical eyebrows in the international trade bar, which is normally marked by civility. Leo Gerard, the steelworkers’ president, has misrepresented the nature of the litigation, while questioning the patriotism of lawyers who represent clients who are opposing the steelworkers in the tire case. A group of Gerard’s allies in the congressional steel caucus have even written a letter to the Government Accountability Office calling for an investigation of some of the lawyers who oppose the steelworkers in the tire case. This in turn raises questions about the ethical perceptions of Terrence Stewart, the veteran Washington trade lawyer who represents the steelworkers and who, with Gerard, has crafted the litigation strategy. Stewart declines comment on whether he encouraged his clients to question the ethics and patriotism of other members of the bar, or whether he has just sat back and let it happen. Stewart perhaps revealed his true sympathies when he declined an invitation to say, for the public record, that he considers the lawyers who are on the other side of his tires case to be respected members of the bar who do not deserve to be tainted because of who they represent. In short, while the available public record turns up no evidence to accuse Terrence Stewart personally of engaging in unethical conduct, the insinuations that his clients and their supporters in the congressional steel caucus have made carry a familiar odor. For those who know their Washington lobbying history, the newest steelworkers’ smear campaign against those who cross them has a familiar smell.

Here’s the story. [Fair journalistic warning: it takes some length to get the context right and provide readers with enough details to enable them to make up their own minds. But at least the tale is easily broken down into bite-sized chunks, if not sound-bites.]

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[Note to readers: This is the second of a four-part series on where President Barack Obama’s still-stalled international agenda is headed. Today’s report focuses on at the marching orders that the White House has given US trade negotiator Ron Kirk, who attended an important trade meeting in Singapore last week — where he had basically nothing to negotiate. Beyond that, the Singapore meetings highlighted some of the diplomatic atmospherics that will be playing out later this year when the World Trade Organization’s trade ministers convene in Geneva, hoping to breathe life into the Doha negotiations. On that front, there was a hint of encouraging news from Singapore last week — along with a report issued by WTO Director General Pascal Lamy that highlighted the weakness of protectionist anti-dumping tariffs, the reform of which continues to be a major roadblock to making Doha work. And of course, in Singapore, Ron Kirk got an earful about US protectionism — from some of the same trade ministers whose own countries aren’t exactly free-trade purists.]

U.S. Trade Representative Ron Kirk flew to Singapore last week, where he attended meetings on July 21 and 22 with trade ministers from the 21-country members of the Asia Pacific Economic Cooperation Forum. This year, Singapore is hosting the annual rotating APEC trade-ministers’ meetings, which will move to Yokohama, Japan next year, and to the US in 2011.

The diplomatic meetings — including a lunch that Kirk held with the private-sector APEC Business Advisory Council, perhaps the strongest pan-Asia business lobby, if not always the most transparent — were not open to the public. No official transcripts of what the trade ministers and the executives had to say to each other privately are on the public record. However, Lim Hng Kiang, Singapore’s trade minister and host of the meetings, released a detailed 11-page press release that said the trade ministers had decried the current rise of protectionism and promised to resist it’s further spread — as had the G-20 leaders in London in April, and also the G-8 leaders in July. While such declarations of sincere good intentions at international confabs often fall short in their implementation, the APEC release went a bit further: calling for the World Trade Organization’s Doha Round to be successfully concluded by the end of next year. Indeed, interviews with some of the usual well-informed-but-anonymous journalistic sources from the diplomatic- and business communities who were in Singapore suggest that the long-troubled Doha negotiations may again be showing some signs of life. At least that’s the view of WTO Director General Pascal Lamy, who was a very visible presence in Singapore.

Lamy also released the WTO’s 2009 World Trade Report in Singapore. The headlines caught just one sobering statistic: that world trade flows could shrink by 10 percent this year. Presumably, few if any of the trade ministers who participated in the Singapore meetings then had the time to give the report’s 196 pages a careful read. But for those who might have, they would have seen some very thoughtful, hard-nosed analysis that explains why anti-dumping laws don’t work as their supporters (particularly in the US) imagine. As demands for reform of the often-draconian anti-dumping laws is a major stumbling block in the Doha negotiations, the new WTO report deserves close attention — particularly for US officials, whose ardent defense of these laws, for purely domestic political reasons, is the main reason the stumbling block exists.

But while the atmospherics in Singapore regarding how to remove some of those stumbling blocks were positive — indeed, it’s difficult not to be positive about the benefits of trade in a cosmopolitan city like Singapore — the political limitations of some of the major players who came to Singapore were readily apparent. Some of the Asian diplomats, for example, were happy to criticize US Trade Representative Kirk for America’s protectionist shortcomings, while ignoring the fact that their homegrown Asian protectionist rackets are often far more blatant. As always in international trade negotiations, it’s always easier to talk about making real progress, than really accomplishing such. We’ll get to that, but first, consider the awkward political situation of the representatives from the two largest economies in the world. In assessing the Singapore APEC meetings, the observations about political weakness begin with the representatives from Japan and the USA.

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[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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