Free Trade: Obama Takes Up Romney's Banner

Michael Hirsh

Mitt Romney, the late lamented presidential candidate (in case you forgot who he was), has quickly become an unperson in a Republican Party that never much wanted him as its champion in the first place. But Romney made an uncredited reappearance this week in President Obama’s State of the Union address. In a single line toward the end of the 60-minute speech, almost as an afterthought, Obamaannounced “talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union — because trade that is free and fair across the Atlantic supports millions of good-paying American jobs.”

Though it has also been on Obama’s agenda for months, making a big, new trade push was, of course, was a key plank of Romney’s 2012 campaign plan to “create 12 million jobs.” Romney, inspired by President Reagan’s handling of free trade in the 1980s, said he wanted to create a “Reagan Economic Zone” of like-minded free-trading nations that would share low tariffs and open trade access. And somewhat ironically, considering that the GOP candidate often accused Obama of seeking to turn the U.S. into Europe, Romney aides said he intended that the European Union nations would be a central part of the new zone.

Obama’s renewed push for free-trade agreements, coming after a first term in which the Obama administration rarely emphasized such efforts, illustrates again how the president seems to be taking a new tack in trying to manipulate the Republicans. Between trade and the way Obama is touting immigration reform as an issue that it is consummately in the GOP’s political interest to resolve, Obama appears to be passively-aggressively encouraging a divided and self-doubting GOP take partial ownership of causes it will need to embrace in order to revive itself. And in the end, of course, if he gets the votes, this will only enhance Obama’s own standing in the polls.

Judging from his State of the Union address, the president wants to pursue an aggressive agenda that goes well beyond what might some consider his limited “political capital” to be. And he is exploiting the Republicans’ eagerness to redefine themselves by asking for their ideas on issues from Medicare to tax reform. “We should do what leaders in both parties have already suggested, and save hundreds of billions of dollars by getting rid of tax loopholes and deductions for the well-off and well-connected,” he said in his speech, taking up another Romneyism.

As is the tacit case with Obama’s zone, Romney’s zone would have sought to isolate China and other countries that might seek to emulate Beijing’s trade practices through currency manipulation or intellectual property theft — Brazil, India, and Russia, among others. The idea built on the Trans-Pacific Partnership that the Obama administration is pursuing (which, the Romney camp noted, was started by President George W. Bush) and would expand on the World Trade Organization’s already-robust dispute settlement mechanisms with tougher penalties for violations of intellectual-property rights.

Obama, of course, came up with his own plan. The current proposal was sketched out by then-Secretary of State Hillary Rodham Clinton in a speech last fall, and was studied by a joint White House-European Union committee. But it is striking considering that, in his first term, Obama was accused of slow-rolling the free-trade agenda. Obama signed three major free-trade agreements — with Colombia, Panama, and South Korea — but Republicans sniped that these were back-burner issues left over from Bush and that the Obama administration delayed them by haggling over workers’ rights, especially in violence-threatened Colombia. (The South Korea deal, however was also renegotiated to expand access for U.S. vehicles.)

But the GOP can hardly object if Obama manages to negotiate a massive free trade zone with Europe, which is flirting again with recession thanks to austerity measures linked to the euro crisis. It will be interesting to see if the president manages to sell debt reduction and tax reform the same way.