Capitol Comments

Senate Confirms New U.S. Trade Representative

By Peter Mayberry and Jessica Franken | July 18, 2006

Schwab takes office at turbulent time for global free trade initiatives

Amidst a larger personnel reshuffling that was widely anticipated as President George Bush enters the last years of his final term in office, a somewhat unexpected turn of events occurred April 18 during a Rose Garden press conference. In a move precipitated by the resignation of Andrew Card, who served as White House Chief of Staff since the beginning of the Administration, President Bush announced that he had tapped U.S. Trade Representative (USTR) Robert Portman to become director of the Office of Management and Budget, a position left vacant when OMB Director Joshua Bolten was selected to replace Mr. Card.

During the same press conference, President Bush also announced that Susan Schwab—Ambassador Portman's top deputy since late 2005—was being nominated to serve as the next USTR. Less than two months later, on June 8, the Senate voted unanimously to confirm Ambassador Schwab.

And, while news of this appointment probably did not make much of a splash beyond the Beltway, it certainly caught the attention of those who follow international trade matters, including INDA, Association of the Nonwoven Fabrics Industry. Considering that the USTR is a Cabinet-level officer who serves as the principal advisor, negotiator and spokesperson on trade issues and that the Bush Administration is presently engaged in sensitive negotiations all around the globe, anyone with international trade interests should want to know more about the President's pick to fill this important position.

In this article, therefore, we will profile Ambassador Schwab and offer insight on some of the challenges and obstacles she can expect to face in the months ahead.

A "Negotiator's Negotiator"

Almost immediately after the nomination was announced, U.S. business interests lined up to applaud the President's decision to nominate Ms. Schwab. This support was largely based on the fact that she is a seasoned international trade expert with diverse professional experience. Her trade policy résumé dates to the 1970s when she worked as an agricultural negotiator for the Office of the U.S. Trade Representative—an experience she followed by working as a trade policy advisor at the U.S. Embassy in Tokyo.

During the 1980s, Ms. Schwab joined the staff of Senator John  Danforth (R-MO) who was then Chairman of the Senate Finance Committee's international trade subcommittee and played a key role in shaping U.S. legislative trade policy. Based on this experience, in fact, she later served as Assistant Secretary of Commerce and Director General of the U.S. and Foreign Commercial service during the first Bush administration.

After a stint as Director of Corporate Business Development for Motorola, Inc., Schwab became the Dean of the University of Maryland's School of Public Policy—a position she held from 1995 to 2003. In October 2005, she was nominated to become one of Ambassador Portman's deputies and given responsibility for issues including U.S. trade relations with Europe and Eurasia, the Middle East and the Americas, as well as the WTO.

During her time as Deputy USTR, Ambassador Schwab helped craft U.S. strategy during the WTO's "Doha Round" of multilateral trade negotiations and played a significant role in concluding bilateral free trade agreements with Peru and Colombia. This kind of experience has led backers to characterize her as a "negotiator's negotiator" and to describe her as "�[one of] the most qualified trade experts in Washington, if not the world."

Ringing endorsements aside, however, some international trade experts have expressed concern about Ambassador Schwab's ability to fill her former boss' shoes. Ambassador Portman, for instance, served six terms in the U.S. House of Representatives as a Congressman from Ohio and is well regarded by members of Congress on both sides of the political aisle (a quality that served particularly well when it came to persuading Congress to endorse deals such as the U.S. free trade agreement with Central America). But, some observers question whether Ambassador Schwab, having never held an elected office, will get the same sort of reception on Capitol Hill.  

Others worry that Ambassador Portman's relatively short term as USTR might serve as a signal that White House interest in international trade issues is waning. These concerns are also grounded in the fact that Ambassador Portman left USTR at a critical juncture in the Doha Round negotiations with an end-of-July deadline on the horizon for reaching agreement on tariff reduction formulas and efforts to reduce other barriers to trade globally. European Union Trade Commissioner Peter Mandelson spoke for many, in fact, when he summed up the situation in an April 18 statement that noted, "We will of course manage without him, but at this stage in the Round, it would have been easier to manage with him."

Beyond the WTO talks, Ambassador Schwab's appointment also comes at a time that when the Administration's trade agenda is in a particularly precarious position. In the coming months, for instance, Congress is expected to vote on trade agreements that have been negotiated with Colombia, Peru and Oman. In addition, the White House recently launched free trade negotiations with South Korea and Malaysia. Against this backdrop, Congressional elections are looming in November, and Presidential Trade Promotion Authority is set to expire in July 2007.

And, on top of everything, Members of Congress on both sides of the aisle have signaled frustration over the growing trade deficit and what they perceive as a laissez-faire attitude on the part of the Bush Administration for making our trading partners play by global trade rules.

Looking Ahead

What does all this mean for the nonwoven fabrics industry?  During the last four years, members of INDA's International Trade Advisory Board (ITAB) have adopted a series of position statements on international trade issues that support the efforts that Ambassador Schwab is expected to pursue. INDA supports, for example, the successful adoption of a Doha Round Agreement that will help open foreign markets and facilitate global trade. INDA has also spelled out several elements that must be included in any free trade agreement negotiated by the U.S. for our industry to formally lend its support to such an agreement.

So while it is clear that Ambassador Schwab has a challenging road ahead of her, INDA will continue to voice the industry's support for U.S. efforts to liberalize trade and will offer itself as a resource to the new USTR to provide her with information outlining our industry's positions on these timely international trade matters. To that end, in fact, INDA staff recently met with one of Ambassador Schwab's newest deputies, Special Textile Negotiator Scott Quesenberry, to express support for the new USTR and articulate our industry's views on trade-related issues.

As we go forward, therefore, INDA will continue to seek opportunities for working with Ambassador Schwab and her staff in an effort to negotiate free trade deals at the bilateral and multi-lateral level. We will also participate in efforts to get acceptable trade deals approved by Congress. But, for fans of free trade, the coming months will likely offer more frustration than celebration, especially as the clock continues to tick on the Doha Round and the November elections draw closer.
Peter Mayberry's column appears monthly in Nonwovens Industry.

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