The front-runner for U.S. Trade Representative--California Representative Xavier Becerra--is already setting off alarm bells among some cheerleaders of free trade. Becerra was a prominent figure in the House opposition to the Central American Free Trade Agreement and has publicly declared that he regrets voting for NAFTA. Accordingly, the prospect of the Becerra pick has raised "a lot of anxiety" within some trade policy circles, says Paul Blustein, a fellow at the Brookings Institute. "[Becerra] is going to be pushing pretty hard for doing deals only when fairly strong labor provisions are written into them...developing countries are really worried that it's going to be a hidden form of protectionism." The Los Angeles Times editorial page called Becerra a "dyed-in-the-wool protectionist" who has led the Democratic Party to oppose NAFTA and nearly all other trade deals, warning of the return of legislation like 1930 Hawley-Smoot Tariff Act.
But Becerra's record is more moderate than his most vocal critics have made it out to be. He voted in favor of a free trade agreement with Peru and to normalize trade relations with China, and there's no evidence that he would simply reject all free-trade deals on the table, says Edward Gresser from the Democratic Leadership Council's Progressive Policy Institute, a former adviser to Clinton-era trade rep Charlene Barshefsky: "He's internationally minded in terms of economics, and he's not going to be an isolationist." Even Dan Griswold, a trade policy expert at the Cato Institute, has admitted that Becerra's trade record is "mixed" and "probably puts him on the more pro-trade side of his party."
There is enormous symbolic significance attached to Free Trade Agreements--consider the flap over Austan Goolsbee's remarks on NAFTA during the campaign. But in fact they Bush-era FTAs only cover 5 percent of total U.S. trade*. And the huge blows that have been dealt to the U.S. manufacturing sector have little to do with the passage of trade agreements; they are largely the result of huge advances that China, India, and others have made in technology, transportation, and infrastructure. While free trade agreements may continue to be a political lightning rod, policy experts are also encouraging the next U.S. Trade Rep to focus on more broad-reaching ways to bolster the U.S. economy by supporting export-driven growth.
For example, Becerra and his colleagues "could think more about what are going to be the sources of growth, innovation, and employment in the U.S.," says Gresser. "What can we do to capitalize on the wealth of hospitals, medical equipment-makers-is there a way to reduce the cost of clean tech, and export a lot of these things?" In other words, looking inward at the U.S. economy doesn't preclude looking outward: Obama's plan to invest in industries like clean energy and healthcare to stimulate the domestic economy should also strengthen America's future position as an international trading partner.
*Correction: NAFTA covers about 15 percent of total imports to the U.S.; the 5 percent figure is with regard to total U.S. trade under Bush-era FTAs. But all FTAs--including NAFTA--are arguably becoming less economically significant as the percentage of U.S. trade that they cover has declined over the past decade.
--Suzy Khimm