Is Obama an internationalist or trade skeptic?

By Jonathan Lynn - Analysis

GENEVA (Reuters) - In Barack Obama, America's trade partners face a man who has strong internationalist instincts yet is committed to defending U.S. jobs.

At a time when the need for economic stimulus is matched by pressure for tighter regulation, the politician drawing support from the unions and one who wants the United States to benefit from global integration may both find their hands tied.

The incoming president has shown he is aware of the jaundiced view many U.S. voters have of trade, even if he does not share it himself.

Speaking in April about the frustrations of small-town voters bitter over job losses, Obama described people who "cling to guns or religion ... or anti-trade sentiment."

He wants to amend the NAFTA trade agreement between the United States, Canada and Mexico to strengthen labor and environment standards, and favors a tough line with China over its huge and growing bilateral surplus with the United States.

However, an 18 percent rise in U.S. exports in the first eight months of this year is one of the few bright spots in an economy already contracting in the third quarter, and no U.S. president can afford to dismiss trade.

"When he talks in general terms he's strongly pro-trade, he's strongly pro-globalization, he's strongly pro an interconnected world," said Fredrik Erixon, director of the European Centre for International Political Economy (ECIPE).

"I wouldn't call him a free trader, but I would call him an internationalist."

EARLY SIGNALS

Brazil's Foreign Minister Celso Amorim also rejects the idea that Obama's Democrats are protectionist.

"I don't think that holds any more. This has more to do with manufacturing than with the agricultural problems we are facing, and the Democrats are also more multilateralist," he said.

The first indication of Obama's approach to trade may come next week, two months before he takes office, at a summit in Washington on November 15 to discuss the financial crisis. Obama has not yet said whether he will attend but the outgoing administration will in any case have to reflect his views.

Brazil and Australia want the summit to instruct negotiators to speed up work on the World Trade Organisation's (WTO) Doha round to open up global trade, and EU trade chief Catherine Ashton said on Thursday a breakthrough was possible this year, sending a positive signal to the battered world economy.

If the summit does not give an impetus to the Doha talks, launched seven years ago, they risk further delay next year partly because of uncertainty generated by elections in India and the formation of a new EU executive commission.

Although Obama wants to revise NAFTA, he has not indicated he wants a new approach to Doha, says Pascal Kerneis, managing director of the European Services Forum.