WASHINGTON — President Bush’s emphasis on a domestic policy agenda comprising three pillars — health care, immigration and energy reforms — in his State of the Union address Tues­day night disappointed importers seeking more ambitious proposals on trade and raised red flags for U.S. textile manufacturers looking to put a brake on market-opening deals that have contributed to their demise.

Facing one of the lowest approval ratings of any sitting president and sharp divisions over the worsening war in Iraq, Bush made one reference to the strength of the economy and used the word “trade” only once in his 49-minute speech.

“We’re now in the 41st month of uninterrupted growth, in a recovery that has created 7.2 million new jobs so far,” Bush said. “Unemployment is low and wages are rising. This economy is on the move and our job is to keep it that way, not with more government, but with more enterprise.”

Bush opted not to touch on two key trade items: the current round of tariff-lowering global trade talks that have been faltering for months or the pending expiration of trade promotion authority that gives the President the ability to negotiate trade agreements that Congress must pass or reject without amendment. That authority expires at the end of June and Congress must vote to renew it.

By contrast, in laying out his domestic agenda in last year’s speech, Bush placed a stronger emphasis on trade and warned against developing a protectionist stance against growing economic superpowers such as China and India. But that was when Republicans controlled Congress and his trade agenda had a better chance of success on Capitol Hill. Now Democrats control Congress for the first time in 12 years and Bush’s trade agenda faces more uncertainty as Democrats formulate their own trade priorities.

The consensus on both sides of the debate is that a new skepticism about trade has taken hold in both parties in Congress.

The impact of globalization on U.S. manufacturers and their workers resonated throughout Sen. Jim Webb’s broadcast response to Bush’s speech. Webb, a Virginia Democrat selected by his party to give the rebuttal, focused on the disparities between the classes and the adverse impact of trade.

This story first appeared in the January 25, 2007 issue of WWD. Subscribe Today.

“Wages and salaries for our workers are at all-time lows as a percentage of national wealth, even though the productivity of American workers is the highest in the world,” said Webb. “Our manufacturing base is being dismantled and sent overseas. Good American jobs are being sent along with them.”

Erik Autor, vice president of international trade for the National Retail Federation, said, “Quite frankly, given the fact that trade policy is stuck in the mud, I was not expecting much on trade in his speech. Right now, trade policy does not seem to be the focus of this administration.”

Autor characterized Webb’s speech as “another example of the persistent global phobia in the Democratic party that blames the endemic problems that are, frankly, largely home-grown problems, on globalization.”

Domestic textile executives, who attribute the demise of their industry mostly to the impact of globalization and displacement of thousands of workers, were also disappointed by Bush’s speech.

“It is just appalling that there was no reference to an $800 billion trade deficit and the impact it is having on U.S. manufacturers and workers, as well as on pension programs and health care,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition. “It is very disturbing this problem has been swept under the rug and the belief that this is not an issue.”

Tantillo said he took no solace from the fact that Bush didn’t mention a trade agenda “because I know privately they are moving forward with an aggressive attitude” on global trade talks, and trade agreements with South Korea and Malaysia.

Tantillo said he was pleased Webb at least acknowledged the economic disparities between working families and the upper class in America, but also said he was disappointed the senator did not place more emphasis on tying those problems to trade.

Tom Synder, national political director at UNITE HERE, said he was pleased Bush called for a bipartisan solution on immigration reform, which the union supports.

“That’s not to say we liked every word the President used in talking about it, but we need the President to engage on this with the House and Senate on a bipartisan basis, and the fact that was highlighted I think was very positive,” Snyder said.

The absence of trade initiatives in the speech was a signal the president was “reading the handwriting on the wall,” he said.

“An important part of the reason Democrats swept into both houses is that, especially in parts of the Midwest, there is a grave concern about American workers getting the raw deal on these free trade agreements,” Snyder added.

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