U.S.-EU Free Trade Agreement? A Pep Talk or Overhaul at USTR Is the Place to Start

In its first 49 months, the Obama adminstration has paid lip service to trade liberalization. There have been the announcements, the platitudes, the initiatives, the task forces, and the interminable negotiations, but no new trade agreements. Not one. Still, in his State of the Union speech tonight, the president will offer assurances that his rhetorical commitment to trade liberalization remains steadfast, when he announces grand plans to pursue a trans-Atlantic free trade deal. Of course, rhetorical commitments and pursuing free trade don’t exactly get the job done.

Whether anything comes of prospective U.S.-EU trade negotiations or the still-brewing Trans-Pacific Partnership negotiations depends, more than anything else, on whether President Obama believes his own rhetoric. Of course, actions speak louder than words and on that score things don’t look especially promising.

Exhibit A is the Office of the U.S. Trade Representative, where employee morale has gone from bad to worse. In a 2012 OPM survey of 29 small federal agencies published in a report titled “Best Places to Work in the Federal Government,” USTR ranked dead last. The results showed employee dissatisfaction with their jobs, their organization, and their senior leadership.

The overall weighted index score of 32.7 (out of a possible 100) in 2012 is the latest point in a continuous and steep decline in satisfaction, which was 74.2 in 2009, 57.4 in 2010, and 47.7 in 2011. The sub-index for “Effective Leadership - Senior Leaders” declined from 71.2 to 49.7 to 37.5 to 18.6 over those same four years. Only 17.7 percent of the 101 USTR respondents said they had a high level of respect for their organization’s senior leaders, while 62.1 dissented from that view. Only 12.8 percent of 102 USTR respondents said their organization’s leaders generate high levels of motivation and commitment in the workforce, while 67.3 dissented.

These are some profound rebukes of U.S. Trade Representative Ron Kirk, and by extension, President Obama.

What explains the morale implosion? My guess is the agency’s shifting focus and the change in culture that process initiated. During the Obama-Kirk era, the USTR has shifted emphasis away from its traditional mission of liberalization and negotiation toward more aggressive enforcement and prosecution. Under this administration, the USTR has concluded zero new trade agreements, but has initiated 12 WTO complaints against U.S. trade partners. Moreover, some of USTR’s resources have been diverted to the Interagency Trade Enforcement Center (ITEC)—President Obama’s big trade initiative unveiled at last year’s SOTU. Cooperation between ITEC and USTR has been reinforcing the latter’s emphasis on prosecution and may be foreshadowing the type of consolidated entity the president envisions, as he’s proposed merging some of the agencies that have jurisdiction over various aspects of international trade.

For USTR professionals attracted and committed to the more diplomatic aspects of the agency’s mission, the new emphasis on scouring the trade agreements to find actionable violations and contesting trade partners’ policies must feel a bit like a seasoned foreign service professional finding himself trapped in an office cubicle in the basement of the Justice Department. That could also explain the high level of staff turnover at USTR in recent years.

But there is nothing to suggest that the president considers any of this a problem. In fact, President Obama has known for more than a year that Ambassador Kirk would be stepping down as USTR around this time. But when Kirk’s announcement was made official last month, the administration had no replacement candidate vetted and ready to go. Why not? The agency is allegedly in the final stages of negotiating the TPP; the adminstration hasn’t even obtained fast track negotiating authority from the Congress, and; a bold new trade initiative is about to be announced. But there’s nobody ready to take ownership of these efforts? Really? That tells you everything you need to know about this president’s commitment to trade liberalization. It’s not a high priority.

Worse than trade liberalization not being a high priority is that the president appears to be leaning toward nominating Jeff Zients from the OMB to be the next USTR. Zients is one of the masterminds behind the trade agency consolidation proposal that would further marginalize the traditional mission of the USTR to liberalize trade. If the president were serious about trade liberalization, the facts on the ground would be very different than they are today. Remember that, tonight, as the president announces with a smile his intention to pursue a free trade agreement with Europe.