EoW January 2009

T ransat lant ic Cable

The Forbes.com writers noted that Asian countries, too, are ❈ ❈ bracing themselves for the presidential election’s impact on US trade policy, and there are prospects for friction here, as well. Mr Obama has suggested that he might push for a revision in the terms of an historic South Korea-US free trade agreement, signed in 2007 but not yet ratified. The pact would abolish most tariffs on goods moving between the two countries and would add tens of billions of dollars to bilateral trade. In his final campaign debate with Senator John McCain, Mr Obama declared that, every year, South Korea exports hundreds of thousands of cars to the US, which in turn sends only a few thousand cars in the other direction. “That is not free trade,” he said. “We’ve got to have a president who is going to be advocating on behalf of American businesses and American workers.” Data supplied by Forbes.com support the contention of unequal trade flow. In 2007, South Korea shipped some 700,000 automobiles to the US and imported 5,000 from there. The assertion of heavy job losses from trade worked to Mr Obama’s advantage in the prelude to the election, as the perception took hold in industrial swing states such as Michigan, Ohio, and Pennsylvania. Some Democrats have also called for relaxed South Korean restrictions on US steel exports. Introduced on YouTube as “Your Weekly Address from the President-Elect,” the video featuring Barack Obama went online on 15 th November. Mr Obama will be the first US president to utilise YouTube as well as the traditional radio format favoured by another president for hard times: Franklin Delano Roosevelt, who employed his ‘fireside chats’ to reach a wide radio audience as he steered the nation through the Great Depression and World War II. On the same day that Mr Obama launched his YouTube series, policy experts, future Cabinet officials, and senior members of his transition team commenced holding video interviews and question-and-answer sessions at the president-elect’s website Change.gov. The comparison between all this accessibility and the guardedness of the George W Bush administration was very striking, and was met with general delight. In telecom circles, the response to the communications-minded incoming president is more measured. Writing in the Washington Post, Cecilia Kang noted that Mr Obama – who famously made the Web a pillar of his successful campaign for the presidency – has championed the idea of an open Internet, or net neutrality. (“TelecomWarily Waits on ‘Wired’ President,” 14 th November) Ms Kang wrote, “It is widely expected that [Mr Obama] will make net neutrality and access to broadband in rural and poor areas a key part of his agenda to close economic divides and help spur job creation.” Telecom What will the Obama ‘Technology and Innovation’ plan mean for the American telecommunications industry?

Trade

Will President Obama favour free trade, protectionism – or neither?

On the day after the election of Barack Obama as the 44 th president of the United States, a three-person team of Forbes.com reporters recalled one of the few gaffes made in the course of Mr Obama’s nearly mistake-free campaign for the office. It came in March 2008, when another senator, Hillary Clinton, was still very much in contention for the Democratic nomination. In a leaked memo, an Obama adviser was disclosed to have assured Canadian officials that his candidate’s protectionist speeches were “more reflective of political manoeuvring than policy.” Predictably, Mr Obama’s political rivals made capital of the forked-tongue memo, although it obviously did him no lasting damage. In speeches he had frequently knocked the North American Free Trade Agreement (NAFTA), and had even suggested that the US should consider leaving the pact if it could not be renegotiated. The trilateral trade bloc, in effect since 1994, binds Canada, the US, and Mexico in ways that do not wholly satisfy all three signatories, on all points, at all times. Now, Tina Wang, Lionel Laurent, and Andrew Farrell were reviving the memo incident on Forbes.com. They wrote, “[It] highlights the uncertainty around what Obama’s trade policy will be as president. How much of what he has said is campaign rhetoric? How much is deeply held belief? Or is it all a bit of both? Although he frequently took protectionist stances on the campaign trail, there are indications his trade policies could be more centrist in practice.” (“Reading Obama’s Trade Tea Leaves,” 5 th November) The president-elect’s first appointment suggests as much. Rahm Emanuel, the Chicago-area congressman who is to be White House chief of staff, supports expanded trade and would not want the president to govern as a protectionist. And Marco Simoni, a research fellow at the London School of Economics’ European Institute, said that he would not expect an overall rise in protectionism from an Obama administration. But, Mr Simoni told Forbes.com, there could be “maybe some limit to international free trade, and also perhaps a more prudent approach to international movement of capital.” Eloi Laurent, senior economist at the Sciences-Po economic research centre in Paris, warned that Mr Obama’s push for American energy independence could create friction with Europe. “The desire to launch a new ‘green’ economy brings the risk of trade confrontations,” he said. “The automobile sector will be the first battleground.” Mr Laurent told Forbes.com that, with auto makers on both sides of the Atlantic appealing to government for green eco-investment loans, the sector could end up rife with the kind of rivalry seen between Boeing, of the US, and French-based Airbus. The US and Europe have accused each other of illegally aiding their own plane makers, and the acrimony can be expected to mount as the stakes rise in the creation of an ecology-grounded economy.

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EuroWire – January 2009