U.S. in a “trade twilight zone”

“The U.S. is standing at a crossroads in trade policy,” said Chairman Max Baucus (D-Mont.) at the Senate Finance Committee hearing on the future of U.S. trade policy. He explained that the past eight years have seen an “explosion” of free trade agreements and market liberalization that have come with many costs. Baucus said that American workers have been displaced from their jobs, environmental and labor standards have not kept pace with economic growth, and America’s current account deficit “looms larger than ever.”

Michael Kantor, former U.S. Trade Representative under President Clinton, said that “conceptualizing, considering, concluding, and implementing” U.S. trade priorities will be dependent on the nation’s ability and willingness to address the “crucial issues of our competitiveness.” Kantor explained that the U.S. needs to work in “building a competitive America,” needs to restore a credible, open and expanding trade agenda, enforce trade laws and agreements, advance U.S. trade and economic interests, create Fair Trade Initiatives, promote developing countries access to international trade, and encourage presidential leadership and advocacy.

Former Tennessee Senator William Brock said that the U.S. needs to focus on improving education. He said that better education and training is of fundamental importance to American trade policy. Carla Hills, a former U.S. Trade Representative under President George H. Bush, agreed with Brock and said that the U.S. needs to create a bi-partisan commission to study effective ways to improve American’s human capital by focusing on actions that will improve students’ performance at all education levels, as well as in their post-diploma training programs.

Ambassador Charlene Barshefsky, also a former U.S. Trade Representative under President Clinton, said that trade has rarely been as important globally as it is now. She explained that public anxieties over globalization are extremely high due to structural changes in the global economy which are creating new industries and overturning familiar ones. Barshefsky said that the nation needs to remind itself that the U.S. does not “own the position of world’s economic leader,” it needs to earn that title in each generation. She said that the U.S. needs more ambitious and focused trade policies accompanied by efforts to improve the country’s financial position, develop the public services that help create a more efficient and innovative economy, use energy more productively, and ease the transition for workers.