Obama’s inspired choice for US Trade Representative

One the same day the construction workers hoisted a flag-bedecked spire to the top of the new One World Trade Center in New York City, President Obama unveiled his Cabinet appointments for Commerce secretary and the United States Trade Representative in Washington, D.C.
 
{mosads}As was long expected, Penny Pritzker was tapped to take over at Commerce. Heir to the Hyatt Hotel fortune and a long-time financial donor to Obama, Pritzker will presumably bring a wealth of experience to the top job at Commerce left vacant when John Bryson resigned in June 2012. The nomination is a step in the right direction for gender balance in the second Obama Cabinet; her appointment, if confirmed, will see 8 out of 23 cabinet-level positions held by women. However, her Senate confirmation hearing will not be entirely straightforward and some awkward questions about her offshore financial activities are likely to arise.
 
While the Pritzker pick is not wholly surprising but somewhat controversial, Obama’s selection of Michael Froman to be the next U.S. Trade Representative is an inspired choice. Froman has served as deputy national security adviser for international trade and economics since Obama’s election in 2008. Long regarded as an expert on international trade, Froman is a key supporter of the U.S. trade pacts with the European Union and the Asia-Pacific region and free trade in general.
 
Indeed, it is widely believed that he was responsible for pushing the president, in his State of the Union speech, to agree to open negotiations with the EU on the transatlantic trade and investment partnership (TTIP). Announcing Froman’s nomination, Obama said “He has won the respect of our trading partners around the world. He has also won a reputation as being an extraordinarily tough negotiator while doing it.”
 
Froman, who succeeds Ron Kirk, takes over at the USTR at an extremely sensitive time. As trade representative, he will act at the main negotiator for the U.S. with the EU and the Pacific Rim. On the European side, if successful, the TTIP will form the world’s largest trading area with a combined population of 800 million and generate almost half of the world’s gross domestic product. As the world’s two biggest markets, the U.S. and the EU will account for more than 40 percent of world trade.
 
As Republican Sen. Bob Corker (Tenn.) recently pointed out, in 2011, U.S. investors earned more than $250 billion in income on European assets. European investments like Volkswagen’s in Tennessee have created millions of jobs in the U.S. Froman, and by extension Obama, is acutely aware of the challenges that lie ahead in forging a comprehensive deal with the EU, especially in the fields of agriculture, GMOs, and regulation, while at the same time getting any trade pact through a less than friendly Congress will not be easy.
 
Similarly, the Trans-Pacific Partnership (TPP), an agreement between the U.S. and 11 trans-Pacific countries, just concluded its 17th round of negotiations last week in Lima, Peru. This agreement is the cornerstone of the Obama administration’s Asia-Pacific trade and investment strategy to boost U.S. manufacturing and job creation.
 
America’s economic fortunes just became much brighter in recent months thanks to the recent wise decision by the USTR to accept Japan into the TPP. With Japan’s participation, the TPP will apply to 40 percent of the world’s Gross Domestic Product (GDP), a full $27 trillion of economic output – almost twice as much as is produced by the entire EU. Japan, host to the third largest economy in the world, is itself an economic powerhouse of considerable influence. Its inclusion in the TPP is going to have significant and lasting impact on the U.S. economy, not least of all on our ability to create and sustain jobs.
 
At the heart of both trade pacts is Froman, who has the connections and won the respect of trade negotiators from Brussels to Kuala Lumpur. His presence at the USTR will also demonstrate to Congress the U.S. has a proven leader who will promise to look out for U.S. domestic interests. Crucially, his appointment sends a very positive signal to the U.S. trade partners that Obama is serious about securing a positive and speedy outcome to both the TTIP and TTP negotiations.
 

Geary is a Global Europe Fellow at the Wilson Center in Washington, D.C., and assistant pofessor at Maastricht University in The Netherlands.