Presidential candidate Barack Obama promised Ohio voters last February that if elected he would renegotiate NAFTA and make it fair for American workers. With that, he cut Hillary Clinton’s lead in the Ohio Democratic primary, put himself on the path to political victory and ultimately the Presidency.
Yet, the people who President-elect Obama is appointing suggest that he intends to follow the failed "free trade" policies of his two predecessors.
Indeed, Obama’s key economic advisors are all hard-core "free traders," as devoted to the theories of Adam Smith, David Ricardo, and Milton Friedman as the Bush appointees they will be replacing.
For example, Lawrence Summers, the former Treasury Secretary in the Clinton Administration, a key advocate for NAFTA and an architect of U.S. policies for global financial deregulation, will head the Obama National Economic Council.
The Secretary of the Treasury will be Timothy F. Geithner, Summers’ aide in the 1990s and now the head of the New York Federal Reserve Bank – the man who failed to monitor Wall Street during the Bush years. A former employee of Kissinger and Associates, Geithner, too, is a devoted free trader.
The Administration’s point person on trade will be Ron Kirk, who is glaringly unqualified for the job. In the late 1990s, Kirk was the Mayor of Dallas, Texas, and in 2002, a candidate for the U.S. Senate seat now held by his GOP opponent.
Kirk has no experience in negotiating major trade deals or enforcing them. As Mayor, he supported NAFTA and as candidate for the U.S. Senate he supported having the U.S. make more free trade pacts.
After failing to win the 2002 Texas Senate race, Kirk joined the giant Houston law firm of Vinson Elkins, where he lobbied the Texas Legislature for the Wall Street private equity firm Kohlberg Kravis Roberts & Co and TPG, a global investment firm.
TPG has more than $50 billion of capital under management around the world. KKR controls 51 private equity portfolio companies and has a total value of more than $68 billion. KKR has done the largest buyouts in the history of the U.S., the Netherlands, Denmark, India, Australia, Turkey, Singapore, and France. Besides its U.S. offices, Vinson Elkins has offices in Abu Dhabi, Beijing, Dubai, Hong Kong, London, Moscow, Shanghai and Tokyo.
The principal criticism of the Clinton and Bush trade policies is that they were not about trade, but about making the world safe for U.S. investments. It was investment policy. Those policies, reduced to binding international treaties, facilitated and speeded the outsourcing of U.S. factories, jobs, and service work, even as they made the import of those foreign-made goods and services quota and tariff-free in the U.S.
U.S. Trade Representative designate Kirk has the perfect background and connections to continue those corporate-pleasing investment policies for the Obama Administration. His will be a familiar career path – continue to serve corporate interests while in charge of U.S. trade matters and then become a highly paid international "consultant" after leaving Office.
The Obama Administration can do better than this. The U.S. Senate should help the new President by refusing to ratify this nominee.