Instead of giving trade preferences to Philippine textiles, Obama should cut tariffs across the board.

Philippine President Benigno Aquino III visited Washington last week with two objectives. One, reaffirming bilateral security ties, was a success. But on Mr. Aquino’s other goal—dropping U.S. tariffs on his country’s clothing exports—the Obama administration sent the president home empty-handed.

The Philippine leader urged Barack Obama to support a bill introduced in both the Senate and House of Representatives to boost Philippine clothing exports to the U.S., which amounted to $1.7 billion last year. The SAVE Act—for Save Our Industries—would give Philippine garment manufacturers duty-free access to U.S. clothing markets as long as they buy U.S. fabrics to make their jeans, shirts and dresses.

Instead, Mr. Aquino got the brush off. All Mr. Obama offered regarding economic issues was a vague statement that he was working “on how we can make sure that we are structuring a relationship of expanding trade and commerce.”

As disappointing as this is to some Filipinos, the outcome is actually good news for free trade. Both sides want trade distortions, so the lack of agreement could end up putting pressure on them to make concessions in multilateral forums. Ultimately the U.S. needs a complete overhaul of its high clothing tariffs, which generally range from 18% to twice that.

The SAVE act is flawed because it would use tariff preferences to divert trade flows to the benefit of a few firms doing business in the Philippines, mainly two well-known names in the world of fashion: Ann Taylor and Ralph Lauren. The tariff breaks for the Philippines would come at the expense of more efficient producers in Asia.

Of course, the Philippines’ beleaguered garment industry doesn’t see it that way. A decade ago, it employed roughly 700,000; now it’s down to 150,000. The industry’s former success relied on guaranteed access to American markets because of assigned quotas Washington doled out to more than 40 countries pursuant to the Multifibre Arrangement. But when these quotas were eliminated in 2005, Filipinos could no longer compete with lower-wage Asian neighbors.

It’s clear this Philippine industry is globally uncompetitive and has thus suffered after the trade quotas were withdrawn, but its advocates don’t want to admit that. For one thing, today’s remaining workers rely on high-end fashion makers like Ralph Lauren and Ann Taylor, who sell to price-insensitive markets. Thanks to the Philippines’ comparatively high-cost labor markets, the rag trade has found more economical opportunities elsewhere in Asia.

That’s why Philippine boosters are resorting to historical and emotional appeals to get back on America’s trade dole. Many ask why the U.S. hasn’t eliminated tariffs for Manila, while doing so for some African clothing exporters like Mauritius, which has an economy five times that of the Philippines.

“It’s kind of perverse” to exclude the Philippines, a former U.S. colony, argues Ron Sorini, a former U.S. textile negotiator who is lobbying for the Philippines. And Chris Panlilio, the Philippine undersecretary of trade who came to Washington with Mr. Aquino, says it is unfair “given our historical relationship with America” for the Philippines not to enjoy preferential trade.

The SAVE proposal might help the Philippines, but it would only be robbing Peter to pay Paul, shifting the relative tariff burden between countries instead of promoting freer trade. For years, diplomats from lower-cost Asian clothing exporters like Bangladesh and Cambodia have been asking American presidents of both political parties to give them tariff breaks on their clothing exports—requests that have consistently been rejected.

The big problem for all textile traders around the world is that the leader of the biggest economy is running a zero-sum game, where the winner has to lobby his way out. There is a simple way Mr. Obama can help all these countries, and at the same time avoid distortions: He can cut these tariffs across the board.

But not only is this not on the agenda, the Obama Administration is these days pushing to create more two-way trade preferences. During the ongoing Trans-Pacific Partnership negotiations, Mr. Obama has been fighting tooth and nail to make Vietnam buy American fabrics in return for tariff reductions. The Vietnamese, sensibly, have pointed out the economic absurdities of this policy. Undeterred, the Obama White House vows to keep up the pressure until Vietnamese negotiators give in. The hypocrisy is too hard to ignore: Washington wants from Hanoi what it won’t give to Manila.

President Obama, who once promised to change how America treats other countries, shows no signs of shame at pitting poorer nations against each other in the scramble to get around high U.S. clothing tariffs. Nor does he appear to see the intellectual inconsistencies between his various trade positions. Dropping tariffs across the board would end the political merry-go-round and allow healthy competition based on efficiency and quality.

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.