WASHINGTON: A trade debate in the week ahead puts President Barack Obama on the side of Congressional Republicans with global investors hoping for a deal.
The U.S. Senate could vote in the new week on Trade Promotion Authority. The bill puts forth a special authority to more quickly approve international trade deals. This is the first step in a larger strategy to expand global trade, first in the Pacific with Asian countries, then across the Atlantic with Europe.
The fast-track legislation essentially gives the president the ability to negotiate a trade deal and allows Congress to take a yea or nay vote on the deal. Congress would not be able to amend any agreement (forcing another round of negotiations). It would just approve or reject a deal.
In 2010, Obama set out to double U.S. exports in five years. The U.S. is only two-thirds the way to that goal with less than a year left on his timeline. A drop in exports helped slow the American economy considerably in the first quarter. A slowdown at West Coast ports and a strengthening dollar hit exports hard.
The worry of opponents is that lowering trade barriers would further hollow out America’s manufacturing base. International trade can displace jobs. It also creates new employment opportunities as new markets are tapped and products and services developed.
Global investors follow those opportunities beyond their borders. International stock indices, like those in Japan and across Europe, are far out-performing the S&P 500 Stock Index so far this year. The prospect of opening new trade opportunities with the U.S. is worth watching.
Tom Hudson, financial journalist, hosts “The Sunshine Economy” on WLRN-FM in Miami, where he is the vice president of news
