■ T RADE

U.S. TRADE REPRESENTATIVE ROB PORTMAN WILL NEED TO RELY ON HIS BLEND OF AFFABILITY AND DETERMINATION TO CARRY FORWARD HIS LARGE PORTFOLIO OF TRADE ISSUES. Trade Mission

B Y B RUCE S TOKES ■

n early May, only four days after the Senate confirmed Rob Port- man as the new U.S. trade representative, he Iflew to Paris for talks with trade ministers from other leading trading nations about a uniform method of measur- ing agricultural tariffs. Trade ministers generally don’t bother themselves with such arcane details, but the stalemate on this key point had held up the Doha Round of multilateral trade negotiations for months. To make matters worse, the Japan- committee, rose to speak. He joked that, although he had ese, the Swiss, and others were threatening to block an moved up in the pecking order, from Congress to the Cabi- emerging compromise because they felt that the “big boys”— net, he was still a peon compared with Chairman Thomas. “It including the United States and the European Union—were broke the ice in the room,” recalled one business lobbyist in making decisions without consulting them. attendance. “It created a good feeling that Portman under- When Portman arrived, one observer recalled, “the Hong stood the process [that Congress has the ultimate constitu- Kong trade minister said, ‘Get in the room or this will fall tional authority on trade]. And it showed that he knew apart.’ Portman looked everyone in the eye, was straightfor- Thomas’s strengths and weaknesses, and could play to them.” ward, honest, and said he would talk to anyone about their These two vignettes, nearly three months apart—one on concerns. The whole tone of the meeting changed. It was not the world stage and one within the clubby confines of Capitol the big, bad bullying United States. He calmed everyone Hill—capture the uniformly positive reaction, at home and down.” The ministers reached a tariff deal, and the Doha abroad, to Portman’s appointment. All of those who have Round was back on track. worked with him—trade experts, business lobbyists, foreign Fast-forward to a day in late July. Congress was preparing to trade officials, and even congressional Democrats—praise the vote that night on the Bush administration’s controversial 14th U.S. trade representative as a smart, hard worker, a per- Central American Free Trade Agreement. The House GOP sonable man who is a terrific listener. These are all qualities leadership was hosting a final strategy session in Room HC-5 of that Portman will need in spades if he is to rebuild bipartisan the Capitol. Anxiety was high. It was unclear whether House support for trade in Washington. Ways and Means Committee Chairman Bill Thomas, R-Calif., “Rob Portman is the right person at the right time,” said who had crafted the implementing legislation, had the votes. Mickey Kantor, President Clinton’s first trade representative, Portman, who until April had been a member of Thomas’s who, like Portman, inherited both an unfinished regional

3186 NATIONAL JOURNAL 10/15/05 trade deal and an unfinished multilateral agenda—and who “He got dealt a very tough hand with CAFTA,” acknowl- thinks that Portman’s congressional background will prove edged a Democratic House aide whose boss opposed the invaluable in wrapping up those negotiations. “If I had trade agreement. “As many cards as could have been stacked designed someone for this job at this time, I would have against him, were. And the fact that he took the lead and got designed him,” Kantor said. it through Congress was a real testament to his skill.” Nevertheless, some people have qualms about Portman, “And he did it without leaving a lot of wounds,” said Clay- a former six-term Ohio congressman, who had no real ton Yeutter, a former U.S. trade representative who is now of public profile on trade issues before he was chosen to suc- counsel at Hogan & Hartson. “In fact, he may have healed ceed Robert Zoellick, President Bush’s first USTR and a some wounds with Congress. That was an excellent begin- highly respected trade strategist, who is now deputy secre- ning for him.” tary of State. Moreover, said Frank Vargo, a vice president at the Nation- “Portman is the John Roberts of the trade world,” quipped al Association of Manufacturers, “he got the president involved to a degree the president hadn’t been MANNIE GARCIA/GETTY IMAGES (LEFT); AP/EUGENE HOSHIKO involved before. He was brilliant on CAFTA.” Yet for all the good vibes surrounding Port- man’s handling of CAFTA, the deal still gar- nered only 15 Democratic votes, hardly a sign of budding bipartisanship. “It was tough to convince many Democrats to come over,” Portman admitted in an interview with National Journal. (See box, p. 3188.) “But I think we made some progress in reaching out to Democrats and dealing with some of the parti- san feelings out there, so that the next agree- ment will be a little easier.” “A lot of people think he’s a nice guy,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “And he treats members of Con- gress with respect, while many in Congress really did not like USTR Zoellick. But neither his good congressional relationships nor his dogged CAFTA lobbying schedule seemed to have made much of a difference. CAFTA passed AT THE WHITE HOUSE: only after it was reframed as deciding whether Portman seems to have the ear of President Bush would be a lame duck in his sec- President Bush, something he will ond term’s first year. And that is politics above need as he faces a host of thorny the pay grade of any USTR.” issues, particularly the growing one European diplomat. trade deficit with China, whose “It’s a short record, with lit- MR. CONGENIALITY commerce minister, Bo Xilai, met with Portman in July. tle to go on.” Foreign gov- No discussion of Portman—be it with his acquaintances or ernments, in particular, are his adversaries—gets very far without some comment about anxious to hear more about his affability and low-key demeanor. A veteran of more than a Portman’s vision: What compromises is he willing to make to decade of Washington trench warfare, he seems, somehow, conclude the Doha Round? How does he intend to deal with to have made few enemies. Moreover, in an administration China? What are his plans for more bilateral or regional free- that has developed a reputation for arrogance, Portman is trade agreements? And at home, Thomas and other conserv- known for his responsiveness. “The guy actually listened and ative Republicans are skeptical that Portman, even with all of comprehended and was sympathetic to what an industry his people skills and close ties on both sides of the aisle, can faced,” said one veteran trade lawyer who recently pleaded a woo congressional Democrats back into the free-trade camp. client’s case before Portman. It’s a tall set of challenges, and over the next two years, the But colleagues caution that the USTR’s congeniality trade stakes will be unusually high. should not be confused with a lack of tenacity. “He is very much results-oriented,” said Democratic Rep. Ben Cardin of CAFTA Maryland, who worked with Portman on pension reform in Portman, 49, could not have taken the USTR post under 1997. “When focused, he is incredible in not taking no for an less auspicious circumstances. Lacking the votes to pass answer.” CAFTA, the White House had long refrained from sending Still, in an era of embittered and deepening partisan divi- implementing legislation to Capitol Hill. When a decision sions in Washington, Portman is known for his commitment was finally made to roll the dice and seek a vote last spring, to bipartisanship. As a congressman, Portman was more con- Portman was to be the croupier. servative than two-thirds of the House of Representatives, Even before his confirmation, he was working the halls according to National Journal’s 2004 vote ratings. Although he and hideaways on Capitol Hill—listening, cajoling, cut- was the GOP House leadership’s designated liaison with the ting deals. administration, he was not part of the hard-line conservative

10/15/05 NATIONAL JOURNAL 3187 circle surrounding then-House Majority Leader Tom DeLay, lishment of a bipartisan coalition on Capitol Hill in support R-Texas. Rather, the representative from Cincinnati earned a of trade liberalization.” reputation for reaching across the aisle and endeavoring to A USTR that can get along with Capitol Hill would be an build bipartisan coalitions for legislation, a strategy he contin- invaluable asset for the White House. But Congress most ued with CAFTA. respects, and fears, Cabinet members who have clout within “Rob Portman was indefatigable in trying to work with the administration. Democrats on CAFTA,” Thomas said. “He was willing to Portman worked in the Bush 41 White House, so he knows spend countless hours listening to and talking to Demo- many of the Bush 43 players. During the campaign to pass crats”—a kind of backhanded compliment from a chairman CAFTA, he used that experience and those personal connec- who seldom has had much time for such efforts. tions to bridge the communications gap between Capitol Hill Portman still has to deliver on a number of the deals he and 1600 Pennsylvania Avenue. cut in order to win CAFTA votes. And some, such as a “I think he knows how to [translate] the needs of his for- promise to Sen. Jeff Bingaman, D-N.M., for more funding mer fellow Hill types into language that the White House can to enforce labor rights, may prove difficult to fulfill. But understand,” said one lobbyist. “I also think he has some per- Democrats who have worked with Portman in the past sonal relationship with W. that Bob Zoellick did not have, vouch for his integrity. “When he gives you a commitment,” and that is also an important function in getting compromis- Cardin said, “you can go to the bank on it. If there is any- es that look like W. victories—the entire point of the whole one who can bring us back on track in a bipartisan way, it’s exercise.” Rob Portman.” One sign of Portman’s self-assurance about his relation- This ambition has support from major U.S. corporations. ship with the White House: He skipped the late-July presiden- “If we are going to achieve our long-term objectives on the tial photo op that accompanied Bush’s signing of CAFTA, trade and investment front,” said Calman J. Cohen, president Portman’s first major legislative triumph. A World Trade of the Emergency Committee for American Trade, which Organization meeting in Geneva was more important to him represents many of the largest U.S. international firms, “I than an event that many Washington power brokers would cannot imagine any more important goal than the re-estab- consider a command performance.

■ NONPARTISANSHIP HELPS THE U.S.

.S. Trade Representative Rob tiles. You lose some people, and the cles having to be removed to have a Portman sat down with National question is, how do you make up that Doha deal that would be acceptable to Journal in late September to group? You end up having a trade pol- American farmers? U Portman: talk about his first few months in office icy that is less consistent. Having more Doha doesn’t deal with those and about the challenges ahead. of a consensus, you have some consis- issues. The beef hormone case will not tency going forward. be resolved by Doha. I wish it were oth- NJ: Why do you care so much about I think partisanship should, for the erwise. On the other hand, I have raised rebuilding bipartisan support for trade? most part, be left at the water’s edge these issues [with E.U. trade minister Portman: I suppose we could [keep] with trade. We are competing with the Peter Mandelson]. We have had those passing agreements by one vote. But I world now as Americans, not as Demo- discussions now in a way that are much don’t think it’s the right way for us to crats or Republicans. And that competi- more direct, and we are seeing a little proceed, because sometimes we will tion is more intense than ever. And bit of progress. We are talking about try- lose an agreement by one vote. That how we face that global competition ing to work something out in some of leads to fissures and divisions on a par- will determine the economic future of these areas parallel to the Doha Round. tisan basis that make it harder to pull our country. So I think that the fact We can’t make any promises, but cer- together the votes for the next agree- that [trade policy] can be nonparti- tainly that would be my interest. ment. So, instead of creating more rifts, san—I wouldn’t say bipartisan—bene- and creating a smaller and smaller uni- fits the United States. There will be NJ: Do you see the Doha services nego- verse of people who are interested in legitimate differences every four years, tiations leading to sector-specific agree- being supportive on trade, it’s about in a presidential election, but then, ments among like-minded countries? expanding that base and having a larg- when we are facing global competition, Portman: Yes. I also think it’s true in er group of members involved and giv- we ought to try to stick together. the non-agricultural market-access ing us input and being supportive. talks, by the way. But with services, I Second, I think you get two benefits NJ: The Europeans have offered to cut think there are two hopeful signs. One from [bipartisanship] that are not farm subsidies and agricultural tariffs, is that the Indians and the U.S. have always recognized. One is consistency. but many European barriers to Ameri- decided to co-chair a smaller group of If you pass something by one vote, the can agricultural products involve bans countries that have a particular interest next agreement, frankly, is going to on the importation of hormone-treated in services, which will attempt to come have to be a little bit different because beef or genetically modified organ- up with a better framework for dealing of sugar—and if it’s not sugar, it’s tex- isms. Would you envision those obsta- with services. I like the sectoral

3188 NATIONAL JOURNAL 10/15/05 INSIDE THE BUILDING internal griping about slow or ad hoc decisions. The agency The U.S. Trade Representative’s Office, housed in the must also adapt to their new chief’s looser management style. Winder Building, across 17th Street from the Old Executive Portman, a quick study, relies more on personal briefings than Office Building, is an intimate place; its 205 self-motivated on memos, for example, and seems to want to know just high achievers routinely work long hours, and many of them enough to achieve his objectives. Zoellick prided himself on travel almost nonstop. knowing more than his briefers, and he showed an attention to Zoellick, Portman’s predecessor, drove the agency relent- detail that was intimidating, but also reassuring, to USTR aides. lessly. “There are a lot of shell-shocked people here who are beaten down,” said one veteran trade official. “One of the CHALLENGES AHEAD things Portman will have to do is water the plants.” In the end, however, history will judge Portman not on By all reports, he is doing just that. Camaraderie is return- CAFTA or on his personal style but on how he handles the ing to USTR, and morale is on the rise. “In the building,” Doha Round of multilateral trade negotiations and the wors- observed a business lobbyist, “people find Portman refresh- ening U.S. trade situation with China. ing—someone who is working with them rather than berat- “He has done the easy part,” said Jeffrey Schott, a senior ing them and telling them how little they know.” fellow at the Institute for International Economics, “com- Even foreigners notice. European trade officials say they pared with the adventures that lie ahead.” find senior U.S. officials much more open and collegial, will- Orchestrating a multilateral trade negotiation involving ing to speak up in the boss’s presence. Yet problems remain. 148 nations is like playing Go, the complex Japanese board Many of USTR’s senior decision-making positions have been game, in three dimensions. Simultaneous discussions deal vacant for months. Zoellick’s departure coincided with a with agriculture subsidies, tariffs on manufactured products, wholesale exodus at the top of the agency. Portman is filling the right to open an insurance agency or another service- slots, but he still doesn’t have his own team in place. The provider in a foreign country, and trade rules about dump- delay couldn’t have come at a worse time. ing or subsidies. Everything is related to everything else, and Zoellick had tightly limited decision-making to a small nothing is decided until all is decided. group of top officials. Now, the power vacuum has led to some “The only game in town is the Round,” said William A. PHOTOS BY RICHARD A. BLOOM

approach. From our point of view, a sured. We should understand that we tariff line specifics and with a sense relatively small number of countries are behind, and until we can unlock of urgency and goodwill. making serious commitments on a rel- tough issues like agricultural market atively small number of services would access, it will be tough to make NJ: What about rising congressional be a huge success. We have identified progress. Keeping expectations in concerns about China? about 16 countries and about 12 differ- check is important. Portman: I think the Chinese govern- ent types of services—from express The way I would determine success ment is learning the impact of the leg- delivery to financial services—where is whether in Hong Kong we have the islative branch on our policies. I don’t we have a particular interest. framework in place, with specificity, know that they yet fully appreciate the so that it’s not just that we are going importance. So, part of this is an educa- NJ: What is your benchmark for com- to reduce manufacturing tariffs sub- tional process, explaining to them that ing home from Hong Kong claiming stantially, but [that we are going to there are certain things in our system success? have] a formula, and commitments that we do on an executive branch basis. Portman: First, just to be clear: The by countries to live with that formula. But there are other things where the [Doha] agreement was never meant to And we have—and this is less easy to legislative branch has quite an impor- be done in Hong Kong. Second, we measure—a good-faith commitment tant influence. Sometimes, I think they are behind [schedule]. So, our expec- by countries to spend the next 12 underappreciate the way our represen- tations for Hong Kong should be mea- months in intensive negotiations with tative government works.—Bruce Stokes

10/15/05 NATIONAL JOURNAL 3189 Reinsch, president of the National For- LIZ LYNCH risk, to allow Portman to get a victory eign Trade Council. “Portman will be and put some points on the board.” measured by his ability to bring that Such an intellectual-property case would home intact, on time, and in a way that have the added advantage of enjoying is good for the United States.” support from business, labor, and The Round has already lasted a year Democrats. longer than anticipated, and a whole However, many of the decisions on new cast of characters is now on the trade with China may not be Portman’s stage, including Portman, Peter Mandel- to make. Congress wants to take action son as European Union trade minister, against Beijing’s alleged manipulation of and Pascal Lamy as the director-general the Chinese yuan—but that’s a jealously of the World Trade Organization. guarded Treasury Department preroga- “It comes down to trust and personal tive. Zoellick, in his new post at State, BILL THOMAS: leadership in generating negotiating wants to be the China czar. And the momentum,” Yeutter said. “And, so far, On CAFTA, Rob Portman White House is sure to be a principal Portman has made all the right moves.” “was willing to spend player, because the administration needs Chi- countless hours listening to To break the Doha deadlock, Portman, and talking to Democrats.” nese cooperation on North Korea, Iran, and in early October, offered to cut American terrorism—not to mention Taiwan. farm subsidies by 60 percent and to slash Finally, Portman will have to decide what U.S. tariffs on agricultural imports by at least 55 percent. to do with another Zoellick legacy: a patchwork of proposed The initiative was aimed at giving momentum to the WTO’s bilateral and regional trade agreements, with potential part- biennial meeting in Hong Kong in December. Negotiators ners in the Persian Gulf, the Andes, and Southeast Asia. Con- need to make decisions there to ensure that the talks finish gress will probably swiftly approve some of these pacts, such by the end of 2006 and that Congress, in turn, has time to rat- as an already negotiated deal with Bahrain. Others could face ify any deal before U.S. presidential trade-negotiating author- a rocky reception, such as the yet-to-be-completed agreement ity expires in mid-2007. with Thailand, which U.S. auto interests are likely to oppose. The chairmen of the Senate and House Agriculture com- And Portman must either spurn or welcome other suppli- mittees had already expressed their wariness of cutting farm cants in the queue, notably South Korea and Egypt. subsidies in order to spark progress in WTO talks. So Port- “I see no inconsistency between working hard on the glob- man must walk a narrow line, putting enough on the table in al front to achieve a successful Doha Round and, at the same the run-up to Hong Kong to advance the negotiations, with- time, making progress where we can on the bilateral and out incurring the wrath of Congress. regional front,” Portman told National Journal, addressing for- “Portman needs to make sure he controls expectations for eign fears that deals like CAFTA suggest the United States is Hong Kong,” Yeutter said. “Trade ministers need to hit sin- less interested in the Doha Round. “These are not competing gles in Hong Kong, maybe a double or two. But they don’t visions. In my view, these are complementary visions.” need to hit home runs. And what they have to avoid is strik- More broadly, the erosion of the American public’s faith in ing out.” trade will severely test Portman’s political talents. His USTR Trade veterans expect Portman to blame any lack of predecessors argued that expanding exports would solve Amer- progress in Hong Kong on the Europeans and, possibly, on ica’s trade woes. But what exports? The industrial heartland the Japanese. That Kabuki performance has already begun: has moved offshore. The United States is running an agricul- In his October proposal, Portman offered to eliminate all tural trade deficit. Portman will undoubtedly promote the sale U.S. subsidies and tariffs within 10 years. It’s a commitment of more American-made services overseas, but U.S. white- col- the administration is unlikely to be able to deliver on, but it lar jobs are rapidly being outsourced around the world. With gives Portman the moral high ground. American workers’ incomes stagnating and the trade deficit mushrooming, restoring the public’s faith in trade liberaliza- THE CHINA CONUNDRUM tion may be the new USTR’s greatest challenge. Portman’s second major challenge is China, which is likely Many Washington trade experts wonder how long Portman to run a $210 billion trade surplus with the United States in will be around to wrestle with that problem, and all the others. 2005. “China could bite Portman in a big way,” predicted a He is young, talented, ambitious, and tight with the GOP lead- trade association president, because it’s a problem without an ership. In the past, he has made no secret of his hope to one obvious solution. day run statewide in Ohio, either for senator or for governor. Ostensibly to get on top of the China issue, but also to buy But USTR has never been a good stepping-stone to higher himself time, one of the first things Portman did upon assum- office. So, the speculation among some lobbyists is that Port- ing office was call for a “top-to-bottom” review of China poli- man may eventually want a better launching pad. “I would not cy. “When I got involved in the confirmation process,” he told be surprised if he would be Treasury secretary before this is National Journal, “I wasn’t convinced that we had a compre- over,” opined one lobbyist quite close to Portman. hensive, carefully thought-out, longer-term plan for China. But first things first. The Doha Round endgame looms. So, what I am seeking is not just how we respond short term. The fractious China trade relationship needs better manage- It’s more of a longer-term view for me.” Few observers expect ment And Portman’s concept of “complementary liberaliza- more than symbolic changes. tion”—simultaneously pursuing both multilateral and bilater- One of those symbols might be an initiative aimed at curb- al trade agreement—remains to be fleshed out. It’s a stiff set ing Chinese piracy of U.S. intellectual property: recordings, of challenges. ■ films, software. “My sense,” one lobbyist said, “is that USTR will look for a strong WTO case that is not enormously high- The author can be reached at [email protected].

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