Mr. Joshua Bolten, the new chief of staff for U.S. President George W. Bush, is cleaning house in the White House. Mr. Bolten has two objectives: to restore the luster to the Bush presidency as it enters its final two years and help Republican candidates in the 2006 midterm elections. Yet, changes in the administration do not occur in a vacuum, and one move in particular — the shift of U.S. Trade Representative Rob Portman to the Office of Management and Budget (OMB) — will have international repercussions. Mr. Bolten, and Mr. Bush, may have just ended prospects for a successful conclusion to the Doha Round of global trade talks.
Mr. Bush has been battered by the Iraq war, the ongoing investigation into who leaked the name of CIA agent Valerie Plame and why, and scandals in Washington. His public-approval ratings are plummeting and there is fear that he has become a liability for Republican candidates in the congressional elections that will be held in November. In this environment, there have been calls for the president to embrace change in his administration to regain momentum and initiative.
A first step was taken earlier this month with the resignation — and indeed, all such changes are “resignations” — of White House Chief of Staff Andrew Card and his replacement by Mr. Bolten, former head of the OMB. He then moved to put his stamp on the administration. He has forced political consigliere Mr. Karl Rove to shed his policy role and engineered the “resignation” of Press Spokesperson Scott McClellan. More changes are on the way.
To fill the vacancy at OMB, Mr. Bush tapped Mr. Portman, a former congressman and family friend. The OMB head is not well known, but he (or she) is a critical player in Washington. The director controls the purse strings, and while foreign policy may get the headlines, a presidency is ultimately judged by its domestic policies. A successful OMB director knows the intricacies of the budget — a massive document — and how to handle Congress to ensure that it gets passed. The selection of Mr. Portman is a signal that he is a key player in the president’s eyes.
Unfortunately, Mr. Portman was also doing critical work in his post as U.S. trade negotiator. The U.S. is engaged in a number of bilateral-trade negotiations with counties like Malaysia and South Korea. Most important, Mr. Portman was also central in the Doha Round of global trade negotiations, talks that have missed several deadlines and face another one April 30 when ministers are supposed to agree on numbers to reduce protection and subsidies for agricultural and manufacturing industries. These are the thorniest issues on the table: If agreement can be reached on these items, there is hope for a complete deal by the end of the year. That is a crucial deadline since the U.S. president’s authority to rush any deal through Congress expires early next year. Without that power — officially called “trade promotion authority” and known more colloquially as “fast track” — Congress may amend the agreement beyond recognition, killing any deal.
Changing personnel at such a critical juncture has two impacts. First, it deprives the U.S. (and the negotiation process) of a key and skilled participant. Mr. Portman is well liked and receives high marks from even his counterparts on the other side of the table. Equally significant, his move indicates that trade is not a priority for Mr. Bush, signaling that he is unlikely to spend political capital fighting to get a deal approved. Other governments will respond in kind, and that is no way to get a contentious trade deal approved.
All hope is not lost, however. Mr. Portman has been replaced by Ms. Susan Schwab, one of three deputy trade negotiators. She has good credentials — she has spent her entire professional career working on trade issues — and as a deputy she can assume the portfolio almost immediately. Someone from outside the USTR office would take considerably longer getting up to speed.
But while U.S. officials speak of a “seamless transition,” Ms. Schwab does not have Mr. Portman’s relationship with other negotiators, Mr. Bush or Congress. All three are crucial if a deal is to be realized.
The changes in the U.S. require other countries to step forward and take up the burden of pushing the trade talks to a successful conclusion. Japan should be one of the countries most eager to meet that challenge. Few countries benefit from an open trade system as much as Japan. Moreover, Japan is always looking for issues it can champion to demonstrate international leadership. Of course, pushing for a successful conclusion of the Doha Round will be politically difficult — for Japan as well as other governments — but surmounting such difficulties is the very essence of leadership. It is time Japan proved itself.
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