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George Mason University ITRN 603 002 Professor Stuart Malawer 2 December, 2009

George Mason University ITRN 603 002 Professor Stuart Malawer 2 December, 2009. President Obama’s Trade Policy: Balancing between protectionist pressures and open-market ideals Presented by: Brian Adams Solaiman Afzal Junaid Abu. The two sides of President Obama’s trade policy.

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George Mason University ITRN 603 002 Professor Stuart Malawer 2 December, 2009

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  1. George Mason University ITRN 603 002 Professor Stuart Malawer 2 December, 2009 President Obama’s Trade Policy: Balancing between protectionist pressures and open-market ideals Presented by: Brian Adams Solaiman Afzal Junaid Abu

  2. The two sides of President Obama’s trade policy

  3. Sanction Categories

  4. The President’s legal backing for sanctions • The U.S. Constitution (Article 2 Section 2) • The International Emergency Economic Powers Act (IEEPA) • The National Emergencies Act • The United Nations Participation Act of 1945

  5. Obama Sanction Outlook • Less sanctions on “sponsors of terrorism” • More pressure from labor for protectionist sanctions • Expend political capital to support multilateral trade (the completion of Doha Round negotiations.

  6. Obama supports the completion of Doha Round Negotiations

  7. President Obama’s Trade Policy Rules-based trading system Social accountability and political transparency National energy and environmental goals Trade agreements address unresolved trade frictions Trade agreements and Bilateral investment treaties Strong partner to developing countries

  8. Global trade and Economic downturn

  9. The rule based system and current global economic downturn

  10. Antidumping cases

  11. Stimulus Package and Trade

  12. Overview of Obama and China • “As presidential candidate, Barack Obama wanted to punish China for manipulating its currency to boost exports.” (The Economist) • Tire Tariffs • Trade Dominates the current Relationship • First “Pacific President”

  13. Major Problems. • How tough will Obama be in regards to China currency manipulation which gives them a trade advantage?

  14. Legislation • September tire sanctions: He said he wants to "further expand trade" by showing the world that the US will credibly enforce its own trade rules. One of those rules is a specific legal provision that allows a president to block surges in Chinese imports if they simply disrupt an American industry. • Obama's reasoning in furthering trade through tariffs may sound like doublespeak, but that provision, known as Section 421 of the Trade Act, was actually agreed to by China when it joined the WorldTrade Organization (WTO) in 2001. (Christian Science Monitor) • This claim is “widely disputed” • “based on their negotiations with the Clinton Administration on Section 421, China expected this tool to be used, if ever, only in the rarest and most exceptional of cases”. (John Veroneau )

  15. Tire Sanctions • In the cover of the night • The US tire manufacturers are against the tariff • Tariff means US consumers will pay more for tires. • China response

  16. Obama abroad in China • Media’s Nothing Narrative • Potentially easing trade tensions • Who knows?

  17. One Issue: • Is Obama going to continue to maintain the US role as the dominant force on behalf of global (free) trade?

  18. Clues: • Obama’s political allocation towards trade • Campaigning against NAFTA • The potential for global protectionist backsliding • The lack of progress on negotiations on three regional trade deals. • Ron Kirk • Trade and the US Image

  19. Verdict? • “…it doesn't look like he is planning a big new drive on Doha or global trade - his statement on trade made no reference to the fact that world trade is collapsing." (Adam Posen of the Peterson Institute) • So, in President Obama first term it appears Global Trade is going to need a new leader. • Will Obama policies continue to reflect ambivalences, leadership, or protectionism?

  20. Sources • The Economist • Christian Science Monitor • Whitehouse.gov • Financial Times • Petersen Institute for International Economics • WTO • World Bank • Imf

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