See below for a guest post from MFAN Co-Chair, Senior Transatlantic Fellow at the German Marshall Fund U.S., and former Congressman Jim Kolbe. To learn more about this blog series, click here.
Most pundits and politicians, when they envision the purpose of the United States Trade Representative (USTR) office, are likely to think first of its role in opening foreign markets to U.S. goods and services. Indeed, when President Obama made doubling U.S. exports in five years an economic and foreign policy goal, USTR took the driver’s seat in meeting the challenge.
But USTR has another mission—one of advancing U.S. soft foreign policy objectives through trade. When one looks around at the tools available for development and sustained economic growth in the lesser developed countries of the world, particularly in sub-Saharan Africa, two stand out. They are trade and foreign direct investment (FDI). But neither tool can be used successfully without the commitment of the private sector—businesses deciding that consumers’ needs can be met and stockholders’ investments enhanced by buying and selling in other countries; and investors concluding that a reasonable return on investment can be found in making an investment abroad.
It is apparent from the USTR response to MFAN’s query to various federal agencies inquiring on agencies’ efforts to implement the Presidential Policy Directive (PPD) for its Policy to Action microsite, that USTR understands the importance of these tools. They note that they lead the U.S. government in promoting a range of initiatives designed to boost trade, including Generalized System of Preferences and the African Growth and Opportunity Act; they push economic growth through regional integration; they seek to advance development through new bilateral trade and investment agreements; they participate in other trade initiatives, including the U.S. Feed the Future program.
These initiatives and commitment on the part of USTR are both substantial and vital. But they leave unanswered two other vital questions: does USTR—or any of the government development agencies—fully appreciate the dominant role that must be assigned to the private sector if trade and investment is to grow in the least developed countries? And do they understand that policies of developing countries are very often the major impediment to such growth—regulatory, tax, tariff, procurement and the unsanctioned but often choking prevalence of corruption?
On this score the answer is not quite so clear. Clearly, USTR has initiatives to deal with these issues. But do they get the priority attention they deserve? Will the President and his representatives raise them repeatedly in G-20, World Bank, WTO and other international forums? Will USTR expend its energy to convince Congress of the centrality of these questions?
The development community would do well to acknowledge the significant contributions of USTR to promoting trade and investment as tools of development. But at the same time the community cannot be complacent. It must hold USTR accountable. It must insist that USTR understand that public-private partnerships are not about some grant or joint venture to achieve a public good, but about giving the private sector primary responsibility for increasing trade and investment for sustainable economic development.