WASHINGTON — The race to fill the slot of one of the most prolific trade chiefs in memory is heating up, and his successor will take the helm at a critical time in domestic and international trade policy.
U.S. Trade Representative Robert Zoellick recently announced he was leaving his post to join Secretary of State Condoleeza Rice as her deputy. He is expected to be confirmed by the Senate in the coming months.
Zoellick, a staunch defender of free trade ideology and the catalyst behind the Bush trade agenda, leaves behind a slate of unfinished trade business and one of the most anticipated definitive trade agreement battles on Capitol Hill since the North American Free Trade Agreement.
Among the contenders for Zoellick’s position are Grant Aldonas, Under Secretary of international trade at the Commerce Department; Josette Shiner, deputy USTR and lead negotiator on trade issues for East Asia, South Asia and Africa; Gary Edson, former deputy national security adviser for international economic affairs; Rep. Jim Kolbe (R., Ariz.), and Robert M. Kimmitt, current head of global policy at Time Warner Inc. and a former ambassador to Germany.
President Bush laid out an aggressive trade agenda in his first term, launching several trade negotiations and completing four trade deals, three of which were enacted.
In the second term, a new USTR will face a tough Congressional battle over the Central American Free Trade Agreement, oversee many free trade deals in the hopper, deal with many outstanding World Trade Organization cases and be involved with trying to revive the stagnant round of global trade talks, as well as the moribund Free Trade Area of the Americas pact.
The administration is also negotiating bilateral trade agreements with several other countries, including one with four Andean countries, Thailand, Panama and five African nations.
“The administration will have to get a heavyweight because it knows it has extremely difficult fights ahead,” said Norman J. Ornstein, resident scholar at the American Enterprise Institute.
Ornstein singled out Shiner as a “strong, inside contender.”
“Josette knows the issues well and she has been indefatigable as deputy for the last four years,” he said.
Gary Hufbauer, senior fellow at the Institute for International Economics, said the defining moment for the next USTR will be CAFTA.
“It will be a big triumph if the [USTR] gets it through and if [the USTR] does not get it through people will begin to wonder if he [or she] has clout,” said Hufbauer.
Hufbauer said Kimmitt is lobbying aggressively for the USTR slot and noted he is “well-connected.”
But the true White House insider, according to Hufbauer, is Edson. Hufbauer said Aldonas’ strengths are his Capitol Hill credentials. A former staff member of the Senate Finance Committee and currently undersecretary of Commerce, Aldonas has spearheaded domestic manufacturing initiatives at Commerce and has an insider’s knowledge of domestic manufacturing woes.
“He is extremely highly qualified,” Hufbauer said, although he noted Aldonas and Shiner are less on the inside than Kimmitt or Edson.
Textile and importer lobbyists and trade association executives are watching the race for USTR closely. Trade issues have dramatically divided textile and fiber producers trying to protect the remaining job base in a quota-free world, and importers and retailers fighting to take advantage of unrestrained trade.
There are several outstanding issues related to the elimination of global apparel and textile quotas on Jan. 1 that could have a major impact on domestic textile producers and importers.
The debate over China’s potential to monopolize global textile and apparel production culminated in a lawsuit and preliminary injunction against the government, barring it from reviewing or accepting threat-based China safeguard petitions. USTR has one of five votes on the Committee for the Implementation of Textile Agreements, which reviews and rules on China safeguard petitions.
Retailers and domestic producers are also divided over the controversial CAFTA trade pact.
Zoellick’s successor will inherit the battle to find the votes on the Hill for passage of the controversial trade package.
The USTR will also take the reins of the current round of global trade talks that collapsed in Cancun and has experienced a slow revival. Importers and domestic textile producers are fighting over the U.S. proposal to eliminate tariffs — the last significant protection — on industrial products, including apparel and textiles.
“We hope the new USTR analyzes the direction of trade policy overall and comes to grips with the difficult question of a $600 billion-plus annual trade deficit, recognizes what that is doing to our economy and sets out to reverse that trend,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition. “The new USTR is going to be confronted with the reality of trade policy having to meet a higher standard, or a bigger test, in terms of what is going on in the overall economy and whether or not it continues to exacerbate the trade deficit.”
Tantillo called Aldonas a “seasoned veteran who understands trade policy and is genuinely concerned about the issues the industrial base has raised.” Tantillo also said there is a hope the new USTR will rethink the policy of negotiating bilateral free trade deals with poor countries that have no ability to buy U.S. exports.
“We would hope there is a greater emphasis on agreements or relationships with countries that can actually purchase U.S. goods as well as export goods, as opposed to this aggressive drive to have FTAs with countries that are nothing more than export platforms for the U.S.,” Tantillo said.
Cass Johnson, president of the National Council of Textile Organizations, said, “I would hope the new USTR understands that trade liberalization has become a hard sell in the U.S. because we’ve had so many agreements perceived as giving away U.S. jobs. They would need to be sensitive to that. The government needs to do a better job of making sure U.S. workers don’t lose out as a result [of trade agreements].”
Importer and retailer association executives have a completely different set of expectations from a new USTR.
“Zoellick brought his knowledge of the international community to the table and he was very hands-on, particularly with Africa development,” said Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel. “Whomever comes in may have a different background than Zoellick and may want to emphasize different areas. It will be interesting to see what the goals will be for market opening in addition to other new free-trade agreements.”
Hughes also noted the new USTR will have to “decide how [he or she] wants to look at textile trade policy.”
“Even if Zoellick stayed in the position in 2005, it is clearly a year for rethinking how the Bush administration will approach textile trade policy,” Hughes said, noting Vietnam, Russia and Ukraine are the only countries with remaining bilateral textile agreements.
Erik Autor, counsel and vice president of international trade at the National Retail Federation, said the next USTR will have to finish the current global round of trade talks because the deadline is largely driven by the President’s trade-promotion authority deadline. TPA expires at the end of June, and a two-year extension will be considered by Congress this year.
“That defines the time frame for completing the Doha round,” said Autor, referring to the location and name of the current round of global trade talks.
Autor also noted the next USTR will rebuild bipartisan consensus on trade, which would be an uphill battle.