Excerpt from an exclusive interview with Christopher R. Wall, former U.S. Assistant Secretary of Commerce for Export Administration in the Bureau of Industry and Security (BIS)
IF&T: There’s been a great deal of talk about the Obama Administration’s focus on change. What does that mean for international trade issues?
Wall: So far, it appears that the Obama Administration may be backing away from the Bush Administration’s commitment to free trade and open markets. Instead, it is sounding the theme of “fair trade” and playing to domestic constituencies, especially the labor and environmental lobbies.
Fortunately, the Obama Administration has not tried to renegotiate NAFTA, but Canada had to push back very hard to water down the Buy America provision in the stimulus bill, and the Administration allowed Congress to block Mexican trucks from the U.S. despite the NAFTA requirement. It is not clear how the Administration will fix that problem.
Nevertheless, Administration statements have criticized protectionism, and it appears that the Administration may yet seek Congressional approval of the Panama, Colombia and Korea free trade agreements with some cosmetic changes. It’s still too early to tell if the Administration’s statements supporting international trade will be backed by concrete actions.
IF&T: Under the previous administration, the U.S. was not able to conclude Doha-round negotiations. Why was that and will it change now?
Wall: Concluding the Doha Round was a top Bush Administration priority and the failure to conclude the Round was not for lack of trying. However, the political and economic dynamics of the WTO have changed over the years and India, Brazil and other large industrializing economies now play a more important role than previously. They are demanding more concessions from the U.S. and EU in exchange for lower tariffs and market access.
The big motivator to re-start Doha Round discussions is the global economic downturn. In 2009 global trade will decline by the largest amount since World War II. But countries have not yet indicated whether they are prepared to make additional concessions to resolve the outstanding issues and so far, the Obama Administration has not taken concrete action. U.S. Trade Representative Ron Kirk has said he will not seek to commence Doha round negotiations for a while, and the Administration has not indicated whether or when it will seek “fast track” negotiating authority, although it has the votes in Congress to get that authority if it wants to.
IF&T: How do export controls fit into all of this?
Wall: Trade in high technology products is a subset of the larger trade picture and, despite the general decline in U.S. manufacturing, remains an area where the U.S. excels. High tech exports support high wage jobs, and countries such as China and India with large and growing markets want to increase U.S. high tech trade.
U.S. export controls inhibit the expansion of high tech trade because of the risk that goods or technology may be used for military purposes or in other ways that are adverse to our interests. U.S. export control rules were drafted to address the threats faced during the Cold War era, which has long since passed. The rules need to be fundamentally revised in order to address the threats we currently face – primarily terrorism and the proliferation of weapons of mass destruction – so that U.S. export controls do not stifle increased high tech trade where the risks can be managed.
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