“Second Opportunity” reads this headline from La Vanguardia, one of Spain’s leading daily newspapers, the morning after President Obama was re-elected to a second term.
This theme was repeated in the coverage of U.S. election results which received front page attention worldwide. The Foreign Policy featured its top ten front pages from around the world.
What are some missed opportunities from President Obama’s first term or emerging ones worthy of follow-up during his second term?
United States-European Union Free Trade Agreement?
Behind the scenes, a team of negotiators from both sides of the Atlantic has been in discussion about the prospects for successfully concluding a trade agreement between the United States and the European Union. Lowering tariffs would not be the primary focus of such an agreement. Instead, to be successful it will need to rationalize the regulations imposed by the two sides to address safety concerns in such products as the foods we eat and the cars we drive. In some cases, there are radically different approaches that need to be taken into consideration. The EU has been skeptical of the genetically modified (GMOs) foods that are commonplace in the U.S. In other areas there are no real safety concerns and the regulations are just another hurdle to be jumped at the border. No one on either side of the Atlantic questions the safety of the cars that we import from each other, for example.
Subsidies that each side provides to its industries are another huge area of concern. From agriculture to airplanes, subsidies have been at the heart of the most contentious disputes brought before the World Trade Organization by both sides.
Despite the many challenges, the U.S. and the EU are both keenly interested in concluding a US-EU trade agreement. The EU and U.S. are each other’s largest trading and investment partners with their joint trade accounting for 40% of world trade. A trade deal is seen as a path to generate economic growth and jobs and an additional tool to help pull its members out of the global economic crisis.
Using Trade to Further Development?
President Obama has been criticized for being less active in this area than his predecessors. Expectations are high that this will be remedied during his second term.
His 2012 trade policy agenda sheds some light on this with the following commitments:
- Develop a Trade and Investment Partnership Initiative in the Middle East and North Africa (MENA) region. This effort will include building on trade agreements that already exist with Bahrain, Israel, Jordan, Morocco, and Oman agreements to increase trade and investment between the United States and the region, as well as within the region.
- In sub-Saharan Africa, seek to conclude Trade and Investment Framework Agreements (TIFAs) with the regional economic communities. The most active of these regional communities are the West African Economic and Monetary Union (WAEMU), East African Community (EAC), the South African Customs Union (SACU), and the Common Market for Eastern and Southern Africa (COMESA). These communities are taking steps to reduce the tariff and regulatory barriers to trading among themselves, making it easier for US and other companies to do business. The Obama Administration has pledged to support these efforts.
- Extend key provisions of the African Growth and Opportunity (AGOA) Act. For many sub-Saharan African countries AGOA will continue to offer duty-free and other preferential access to the US market, creating an opportunity for U.S. importers and trade partners.
We should expect these opportunities to occupy much of President Obama’s second term.