Spending cuts may hurt trade efforts

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WASHINGTON -- For those seeking to dramatize the high cost of across-the-board budget cuts in Washington, the temptation, understandably, is to paint in bold strokes: an aircraft carrier pulled out of the Persian Gulf or air traffic control towers gone dark.

Cutting the overseas travel budget of a few dozen trade negotiators hardly seems a comparable threat to America's national security. Yet it could have as large a ripple effect on the nation's global competitiveness as the budget cuts squeezing the Pentagon under the austerity program called sequestration.

The Office of the U.S. Trade Representative has been waging a lonely battle for its budget, which shrank 7 percent to $47 million this year because of sequestration spending caps. Officials in the office, pointing to the 2014 budget proposal in the Republican-controlled House, fear that they could end up with even less money next year.

This matters, officials say, because trade negotiators fly hundreds of thousands of miles to do their jobs. Since the trade representative's office spends the bulk of its budget -- $46 million -- on fixed costs such as salaries and benefits, a cut of $5 million or $8 million could effectively ground much of its 250-person workforce.

"We are in a situation where we're having to choose: Can we send people to a negotiation? Can we bring this enforcement case or another?" newly appointed trade representative Michael Froman said in a recent panel discussion with U.S. Chamber of Commerce President Thomas J. Donohue. When Mr. Froman described his operation as nimble, lean and agile, Mr. Donohue helpfully added "poor."

The office's financial woes have become a minor scandal in trade circles. Susan C. Schwab, a former trade representative in the George W. Bush administration, noted that even in the best of times, life at the office is not glamorous. Negotiators typically squeeze into economy-class seats for 15-hour flights to Asia, after which they plunge into round-the-clock talks on complex issues.

"All of this is under severe threat by virtue of $5 million, $8 million, $10 million," Ms. Schwab said. "That's a real travesty."

At the start of the Obama administration, clipping the wings of the trade representative would not have mattered that much. President Barack Obama's trade policy initially consisted of rewriting parts of free-trade agreements with Colombia, Panama and South Korea that the Bush administration had negotiated and then shepherding the agreements through Congress.

In the past two years, though, the administration has embarked on a genuinely ambitious agenda. The United States is deep in negotiations with 12 Pacific Rim countries on a free-trade agreement known as the Trans-Pacific Partnership. And it has begun what are likely to be multiyear talks on a free-trade pact with the European Union.

Mr. Froman is also pursuing trade-promotion efforts in Africa and a wide-ranging enforcement agenda, which includes exploring trade cases against China and other nations, monitoring new bilateral free-trade accords and compiling a report on 41 countries accused of violating U.S. intellectual property rights.

With the travel budget pressure, Mr. Froman said, he had money to send an official to only one of the 41 countries cited in that annual report, Ukraine. His colleagues like to point out that nations the United States accuses of violating its rights generally do not put their officials on flights to Washington to explain their behavior.

As anyone who has watched the ritual of the Doha Round of talks among World Trade Organization members can attest, international trade negotiations are grinding, labor-intensive ordeals, requiring teams of lawyers and other specialists who camp out in hotels in foreign capitals for months. Breakthroughs, when they come, are often reached away from the bargaining table.

Given the high priority of the Pacific and European trade negotiations, the Office of the United States Trade Representative is not about to leave either of them inadequately staffed. But to keep a full complement of negotiators on both projects, it has scaled back or canceled visits intended to encourage trade with Brazil, China, India, Russia and Turkey.

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