Schwab to Replace Portman as USTR

President Bush nominated Susan Schwab to be the new U.S. Trade Representative, replacing Rob Portman, tapped to be director of OMB.

WASHINGTON — Susan Schwab, nominated by President Bush on Tuesday to be the new U.S. Trade Representative, faces a challenging agenda.

Schwab, who is to move up from deputy USTR after Bush appointed her boss, Rob Portman, director of the Office of Management and Budget, will take on responsibility for faltering talks in the World Trade Organization to reduce global tariffs and work on 14 pending free trade agreements. The administration wants to push the accords through Congress before July 2007, the expiration date for the trade promotion authority that gives the president the power to submit trade bills to Congress for approval without amendment.

“Susan will work hard to conclude these agreements and ensure that American goods, services and crops are treated fairly in overseas markets,” Bush, flanked by Schwab and Portman, said in the White House rose garden.

Schwab, 51, will help manage the delicate trading relationship with China, with which the U.S. had a record $202 billion trade deficit last year. The administration has been pressing China to better protect intellectual property rights and further open its market to U.S. firms. Bush also has been pressuring for reform of China’s currency policies through Treasury Secretary John Snow. Bush is to meet with Chinese President Hu Jintao at the White House on Thursday.

As budget chief, Portman can make good use of contacts cultivated over more than a decade as a republican congressman from Ohio, said Larry Sabato, executive director of the Center for Politics at the University of Virginia. Portman succeeds Joshua Bolten, who has been named White House chief of staff in an effort to reenergize the president’s second term amid congressional unrest.

“I think Bush and Bolten are trying to demonstrate that they are listening to republican senators and congressmen, and Portman would be a Capitol Hill choice,” Sabato said.

The appointments of Portman and Schwab must be approved by the Senate.

At OMB, Portman will watch over how the government spends its money and will be responsible for cutting the federal budget deficit, which hit $319 billion during fiscal 2005, in half by 2009.

The passing of the trade baton to Schwab comes at a delicate point for the WTO’s Doha Round negotiations, which are intended to reduce tariffs on industrial and agricultural goods and services, but have lagged behind schedule.

This story first appeared in the April 19, 2006 issue of WWD.  Subscribe Today.

“Behind the scenes, there has to be some legitimate view that the talks are stalling or about to stall,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition.

Schwab spent eight years working for former Sen. John Danforth (R., Mo.) when he chaired the Senate Finance Committee’s subcommittee on international trade. She started her career as an agricultural trade negotiator at USTR and has been director general of the U.S. and Foreign Commercial Service and dean of the University of Maryland’s School of Public Policy.

“Susan wrote big chunks of our trade law,” said Frank Vargo, vice president of international economic affairs at the National Association of Manufacturers. “She was with Sen. Danforth back in the Eighties and wrote and shepherded a lot of the trade act of ’88.”

Stephen Lamar, senior vice president of the American Apparel & Footwear Association, said, “She understands the rules, she understands the law and she also understands the politics.”