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OAS ROUNDTABLE EXPLORES TRADE POLICY CONSENSUS IN ERA OF GLOBALIZATION

Focusing the spotlight on trade policy issues and globalization, experts at the Organization of American States (OAS) highlighted the need to move forward on free trade agreement initiatives between the United States and certain Latin American countries. They also underscored a concern about the impacts of globalization, coupled with complex U.S. political processes, as major issues affecting progress.

During the roundtable discussion on “Building a Consensus on Trade Policy in an Era of Globalization,” OAS Secretary General José Miguel Insulza emphasized the important role that the United States plays globally in free trade. He expressed concern over the present mood in the United States regarding trade liberalization initiatives, arguing that dire consequences could flow from a failure to approve the free trade agreements with Colombia, Panama and Peru now pending in the U.S. Congress. It is of vital importance that a way be found to push forward for a successful vote on these agreements, Insulza stressed; otherwise future trade relations could be affected in the Americas and globally.

The roundtable featured panelists C. Fred Bergsten, Director of the Peterson Institute for International Economics and former Assistant Secretary for International Affairs of the U.S. Treasury; Federico A. Humbert, Panama’s Ambassador to the United States; and Grant Aldonas, Chair of International Business at CSIS and a former U.S. Undersecretary for International Trade in the Department of Commerce. The discussion was moderated by Washington Post columnist Steven Pearlstein.

Bergsten focused on the politics of U.S. trade policy and noted the growing anxiety in the United States about the impact of globalization, in large part due to the inadequacy of adjustment assistance programs for those workers negatively affected. He noted as well that recent studies have shown an “overwhelming” net benefit-to-cost ratio of around 20 to 1 from moving toward further trade liberalization. However, he said, until strategies and programs are developed that can do a better job of dealing with the downside costs and the losers from globalization, the underlying tensions and anxieties will continue. Bergsten also asserted that the growing U.S. trade and current account deficits contribute to tilting the balance away from trade liberalization.

The Panamanian Ambassador spoke about the free trade agenda of Panama and other Latin American countries, and noted the effects of political change in the United States on the conduct of its trade policy towards Latin America. He emphasized that policy should be separated from politics; otherwise policies could be negatively affected by political changes that introduce different dynamics to international trade policy. Ambassador Humbert emphasized the importance of the passage of the free trade agreements before Congress and how they would not only provide important trading opportunities but also create needed jobs. He remained upbeat that a bipartisan consensus to move forward on trade can be reached in the United States.

For his part, Aldonas accentuated the need to create a vision to move forward on these outstanding trade issues, but acknowledged the effects in the United States of wage compression and real income declines, which
have affected a large segment of the American population. Calling for consensus to be built within the Republican and Democratic parties, Aldonas argued in favor of developing a broader-based national platform to promote competitiveness, of which trade policy would be just one of many interrelated and equally important components. Given today’s globalized world, in which capital, technology and information flow without borders, it is necessary to develop broader and more forward-looking policies to provide a less prescriptive and more facilitating environment for trade that includes programs designed to facilitate labor adjustment, he said..

The Director of the OAS Department of Trade, Tourism and Competitiveness, Sherry Stephenson, in opening the forum, stressed the OAS perspective of trade as a vital component of the policy package available to governments. She explained that “liberalized trade and strengthened trade relations can contribute to the Summit [of the Americas] goals of furthering economic growth, creating jobs and reducing poverty.” The challenge, she said, is how best to ensure that the trade agenda fits appropriately into the context of overall social and economic objectives.

The forum was the fourth session in the OAS Policy Roundtable series, organized by the OAS Department of External Relations.

Reference: E-121/07