Obama Needs an Economic Initiative for the Americas

In "Obama Needs an Economic Initiative for the Americas," Thomas O'Keefe and Evan Scott Thomas ludicrously assert that U.S. trade policy has been characterized by a "lack of vision, unwillingness to compromise, incoherence and inconsistent enforcement." If anything, those features more accurately describe the behavior of many of our trading partners. Admittedly, the U.S. is not free of guilt in a host of areas (e.g., subsidies, Buy American clauses), but it was Brazil that played the larger role in derailing the FTAA and India in scuttling the Doha Round. And since we have (hopefully) entered an era of "post-partisan politics," the writers should be honest enough to recognize that U.S. goods and services trade surged 58% since 2000, development assistance increased, the Millennium Challenge Corporation was launched, and FTAs expanded from three to 15 in force, two awaiting entry into force, and three awaiting congressional action. Additionally, five bilateral investment treaties were concluded or are being negotiated. None of this was done by the previous administration alone. Congress cooperated with the former president-and not just Republicans. Centrist Democrats stood up to the plate and courageously supported trade liberalization measures. As for the writers' argument that the Obama Administration needs an "economic initiative for the Americas," it is a pipe dream to think for a minute that in the midst of a deepening economic recession, conflicts in Iraq and Afghanistan, and more urgent needs to address and fund health care reform and alternative energy-not to mention the growing influence of organized labor-that Latin America take on any greater importance than it did during the Bush Administration. "Soñar no cuesta nada" (it doesn't cost anything to dream). Reigniting growth and reforming and restoring financial health to our own economy is the surest, most effective, and most immediate path to facilitate expanded and deepened trade, investment, economic renewal and sustained development in the Americas.

When the current occupant of the Oval Office launched his campaign on a frigid Springfield, Illinois morning in February 2007, it was dismissed as a pipe dream. Even last year at this time, his supporters were derided as naive dreamers as it was "inevitable" that Hillary Clinton would be the Democratic Party nominee. From the earliest days of our Republic, when 13 poor colonies hugging the Eastern Seaboard of North America took on what was then the mightiest army and navy in the world and (with French support) won, we have repeatedly defied conventional wisdom and turned pipe dreams into reality. I'll throw in my lot with the dreamers! The reality is that from enhancing energy security to expanding the use of alternative energy sources and creating a viable "cap and trade" system for reducing greenhouse gas emissions, not to mention the future health of our social security system, the United States economy needs Latin America.

Ton and Evan,

Thanks to you for this positive and timely article on an initiative that I truly believe is critical to re-building ties within our hemishere and helping our economies.

Thanks again for this strong suggestion to Obama and his administreation. I only hope that he and his advisors will listen to the wisdom and timeliness of it.

Kevin M. Ecclesine

http://www.globalgrowthassociates.net

I have to say that new dreams, if well thought out, are exactly what America (and the world in general) now needs.

Latin American relations were simply taken for granted under the Bush II admininstration, and have been rather condescending on America's part for 20+ years. Relations have to change, however.

With the current massive financial markets failure of supposedly free market policies and unchecked greed on Wall St (The Reagan/ Friedman "Revolution") since the mid 80s, it is time to rethink. The Doha rounds failed not because of Brazil and India, but because US negotiators decided not to negotiate to open up their own agricultural and other barriers that the US still has ample of (note that US still has versions of the Smoot-Hawley tariffs in place, exactly what landed America back into a prolonged depression in the 1930s.)

Also let's not forget that the US is not exactly a free trade country- you cannot compete in their large military-industrial complex market owing to "national security" and cannot form many JVs owing to "sensitive" trade secrets or intellectual property concerns, stuff that covers roughly 20% of the US $13T annual GDP ! Of course foreign entities cannot compete in the vast US government services market either. The "outsourcing" market that has been much decried hardly accounts for 2% of total US GDP. Since US trade is still less than 10% of overall GDP, America, with 20% of global GDP, has a lot more room to grow out of the current global mess compared with other industrialized nations.

It is thus advisable for the US to form a much needed Latin America- US free trade zone just like there is a NAFTA primarily in the North. It allows the US to expand long term ties in a neighbor region that has ample supply of commodities and finished goods; blessed now with vast oil production potential in case oil prices go upwards of $100/bbl.

There is too much focus on "cheap" MidEast oil, which is no longer cheap given tectonic political changes. Of course Latin America also is a huge market for value-add US goods and services, given its educated populations and high per capita incomes.

Socio-politics cannot be ignored anymore. The growing Latino population is now a large swing vote in US elections, without which Obama could barely have won. Clinton's Latino inroads were early warning.

Currency is another issue: with China already having appreciated the yuan against USD by 20% since 2006, and refusing to do more in a hurry to satisfy the incoming Obama administration, the US now is in process of rapidly depreciating the USD by printing vast amounts of dollars to support its financial bail-out package(s.) This will result in another commodity price boom over the next couple of years, so it certainly is again in the US's best interest to look for long term bargains (easiest being in Latin America due to its persistent desire to form a trade bloc.) Such deals can lock in good prices with a stable economic outlook for all parties involved.

I am a layperson, not an economist, and I know almost nothing about trade, let alone trade in the Americas. Yet, I find this well-written article interesting and educational, though -- for me -- lacking in anything truly specific, with, say 4 or 5 key action-plan items.

Do the authors assume in Paragraph 8 that the USA "will need to rely" on increasing productivity and exports to dig itself out of the current debacle? Or, is this a known principle of economics? Aren't there other legs on which to stand as well?

It seemed to me that the "solutions" suggested were nearly all political, rather than based on policy or known features of economics. (Perhaps there is no difference.) There was very little discussion of monetary policy and its reality.

Do any of the "emerging economies" in the hemisphere really support (at a grass roots level) the elusive notion of "economic integration," including labor "rights," environmental "protection," and other progressive ideas? How can those of us in the USA expect Brazilians or Mexicans to support progressive notions that are advocated by barely 50% of U.S. citizens, and with union-busting a clear Republican and corporate agenda item? One needs only to look at the auto workers in Southern states versus those in Northern states to see this problem here at home. Do citizens of the USA truly support economic integration? Does Obama? Where is the USA's own national discussion on this topic and what does it reveal?

What will be the effect of having the new Commerce Secretary Judd Gregg (if confirmed) have on Latin American trade policy? The man does not even speak Spanish, and from all indications, he is about far from progressive ideas as one can get. I know this news post-dated the publication of this article.

Worthy as the idea may be, just how does the USA "encourage" trading blocs and countries to activate their most favored nation clauses to join regional trade pacts? Are "most Western Hemisphere countries" sill opposed to protectionist measures and committed to expanded trade and economic relations with the United States? On what basis do we know this? What USA policies underscore their commitment? I just don't understand this assertion.

Why hardly a mention of Brazil's giant economy?

I agree with the authors that the Obama administration has a unique opportunity to exercise good judgment and its power to bring about a Western Hemisphere that really behaves as if it is in a mutually-cooperative trade situation. Will Obama have the backbone? At least he has brains on his side, a welcome change from the last 8 years. But, does he care?

I just wish that there had been more clear specifics about how obama might exploit his unique opportunity.

Over the past two decades, Latin America has experienced a dramatic political makeover. In January 1990, just three years before Jorge G. Castañeda published his classic analysis of the post–Cold War Left, Utopia Unarmed, only two Latin American countries had leftist governments: Cuba and Nicaragua. In neither case did the head of state come to power through the ballot box. Today, the electoral map has been turned upside down: almost two-thirds of the continent’s population is now governed by democratically elected leftist leaders.
Term Paper and Dissertation Writing

Thanks to you for this positive and timely article on an initiative that I truly believe is critical to re-building ties within our hemishere and helping our economies.

Thanks again for this strong suggestion to Obama and his administreation. I only hope that he and his advisors will listen to the wisdom and timeliness of it.

Obama has achieved so much in such a short period of time compared to its predecessor, so let us give him some credit. The Americas need to support each other and I am sure it is on top of his agenda.

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Thanks again for this strong suggestion to Obama and his administration. I only hope that he and his advisors will listen to the wisdom of sound experts.