Fear that President Barack Obama will backslide on America’s free trade commitments is misplaced—in fact, he may eventually expand America’s commitment to liberalization. His pledge to revisit the North American Free Trade Agreement (NAFTA) amidst an economic slump was one of his most widely discussed policy positions of the campaign season.

The economy—and, notably, unemployment—has gotten far worse since Obama derived political benefit from making the rhetorical connection between trade and job loss. Obama could use the magic policy window of his first 100 days to push through controversial but politically plausible anti-free trade measures. He will not do so—and if he does not do it now, he is unlikely to revisit it later.

If Obama is ever going to pound away at NAFTA it would in coming weeks. He is pushing this month for a comprehensive approach to saving or creating up to 4 million jobs in two years. If there was any real desire to rework NAFTA because it was thought responsible for job loss, it would make sense to address it now.

But Obama is unlikely to seek substantive change to NAFTA now or in the future because he recognizes the benefits of the agreement and knows that the U.S. has little room to maneuver in terms of renegotiation.

In fact, trying to “fix” NAFTA will more likely set off a firestorm with America’s neighbors than actually accomplish anything of substance.  Obama may be politically shrewd to have raised the issue, but he’s more pragmatic than protectionist.

The term “protectionist” is often thrown around incorrectly—and has inappropriately been attached to Obama. He is not a protectionist. Fears that he is should have been quashed with his selections of pro-market internationalists Timothy Geither, Larry Summers, and Ron Kirk for his economic and trade teams. But any one still left unconvinced should have taken solace in his recognition of the market’s “power to generate wealth and expand freedom” in his inaugural address. So rather than focus on misplaced pledges, what can be expected from Obama’s trade policy?

First, expansion of Trade Adjustment Assistance (TAA) has a good chance of being included in the final stimulus and economic recovery package. Doing so would roll service workers that lose their jobs in trade-related economic shifts into a benefit program that currently only covers manufacturing workers affected by specific trade agreements.

This move will be expensive—and the jury is still out on if such efforts are actually effective—but protecting American workers from the impact of trade adjustment is not protectionist. In fact, it is a precursor to the opposite: Even the U.S. Chamber of Commerce supports TAA expansion because it recognizes that Democrats will only consider pending trade agreements with Colombia, Panama, and South Korea if losers from trade receive adequate retraining opportunities. And unlike under the Bush Administration, when the Obama White House requests that the Democratic Congress consider trade agreements—as it will likely do once the economy begins to recover—Congress will likely give these victories to the president.

PRESSURE ON CHINA

Second, increased pressure, potentially leading to action in the next year or so, against China on its currency management and trade practices is probably in the cards. China’s currency will be particularly tricky to address. The U.S. has shied away from actually labeling China a currency manipulator in recent years—but, in his past role, Senator Obama was explicit in doing so on multiple occasions. And Geithner was even goaded into agreeing in his Senate confirmation hearing that China’s currency manipulation was a concern.

However, if the U.S. tries to initiate countervailing action or WTO legal action against China’s currency, it will set off serious tension with Beijing. But China’s own currency policy is distorting trade—so if anything pressuring China to remove the distortion is an effort to further realize free market principles.

A bill was introduced in the House last week in line with another of Obama’s campaign pledges—to step up trade agreement enforcement. Just as drivers speed much more frequently than they actually receive tickets from the police, trading nations cheat on their commitments far more than they are actually compelled to compensate for the malfeasance.

Aggressive enforcement will be billed as politically-motivated protectionism by countries like China that are on the receiving end of action. But it is exactly the opposite: Enforcement seeks to keep other nations in line with their free trade commitments and often leads to retributive action that can force to US to live up to its own trade promises.

Obama is more tentative on free trade than was his predecessor, which will limit his willingness to aggressively push trade liberalization through the Doha Round and bilateral agreements. But he will do so slowly and surely because he is not a protectionist. When he does not use the first 100 day job growth efforts to push protectionist policies like backsliding on NAFTA then it should be relatively clear that he does not intend to follow this path during his administration.

On the campaign trail, President-elect Barack Obama pledged to rethink U.S. trade policy.   The initial nomination of Xavier Becerra as United States Trade Representative was a signal that Obama will work to fulfill that promise. Congressman Becerra declined the offer and former Dallas Mayor Ron Kirk has been chosen to head the office instead.  Given Kirk’s enthusiastic support for NAFTA, he will receive close scrutiny as he takes over a USTR that has the mandate of rethinking U.S. trade policy.

Regardless of the messenger, Obama has pledged to fundamentally change U.S. trade policy.  To this end, there are four early priorities for Kirk and Obama: honor existing commitments under the WTO, press for an equitable completion of the Doha Round, conduct a thorough evaluation of major U.S. trade agreements, and enact comprehensive trade adjustment assistance legislation.

The immediate first step is to honor the WTO ruling that deemed that the $3.2 billion in annual cotton subsidies and $1.6 billion in export credits violate trade rules.  The Institute for Agriculture and Trade Policy estimates that U.S. cotton subsidies caused damages of $400 million between 2001 and 2003 alone for poor African cotton-producing countries, where more than 10 million people depend directly on the crop.

Returning to multilateralism by honoring the cotton ruling would not only aid poor farmers but would also allow the U.S. to regain legitimacy at the WTO by sending signal to developing countries that the U.S. no longer preaches a global trade policy of “do as we say, not as we do”.

Second, Obama and Kirk should move to complete the Doha Round on terms that benefit both the U.S. and its trading partners.  A core principle of a reconfigured Doha Round should be the recognition that developing countries need the policy space to deploy the kinds of government measures that have been proven to work for development in the west.  According to separate studies by the World Bank and the Carnegie Endowment for International Peace, the deal debated while Bush was in office would have yielded only $6.7 billion to 21.4 billion (or less than a penny per person per day) for the poor.  Rich countries were projected to see per capita income gains 25 times those in developing countries. (Read the full report here.)

Third, Obama’s first year in office should also honor his pledge to evaluate impacts of the North American Free Trade Agreement (NAFTA) and other major trade agreements. It is essential that the assessment analyzes the economic, environmental, social and regulatory impacts of past agreements on the U.S. economy– and on our trading partners.

Under NAFTA, Mexico did witness a surge in exports and foreign investment, and for a while a bump in employment. However, such increases did not translate into growth and prosperity - economic growth in per capita terms has been just over 1percent annually and poverty, inequality, and environmental degradation remain persistent.  This has cost the U.S. in terms of lost markets and raises political tensions at home due to the fact that NAFTA’s failure in Mexico gives 500,000 Mexicans a year the incentive to migrate to the U.S.

Until a comprehensive assessment of NAFTA and other past agreements is completed, there should be a moratorium on new U.S. trade agreements – including the pending deal with Colombia. According to the UN, the agreement as tailored will actually make Colombia worse off by up to $75 million or one-tenth of 1 percent of its GDP. In addition, reducing tariffs will strip the government of funds needed for combating guerrillas, fighting crime and developing their economy. According to a new study by the Inter-American Development Bank, the tariff revenue losses for Colombia will amount to $520 million per year.

The findings from a comprehensive review should guide the formation of new Trade Promotion Authority legislation that forges clear guidelines for the renegotiation of past agreements and provides a template for future trade policy. Two Democrats, Senator Sherrod Brown of Ohio and Congressman Mike Michaud of Maine, have recently introduced the Trade Reform, Accountability, Development and Employment (Trade) Act that can provide a guidepost for the assessment process. The Trade Act requires a review of existing trade agreements and a renegotiation of those agreements based on the review. It sets terms of what must and must not be included in future trade agreements.

Finally, any new U.S. trade policy should be coupled with strong Trade Adjustment Assistance legislation in the United States that extends assistance to more manufacturing workers and to services workers, creates incentives to redevelop communities hit by the loss of manufacturing, extends healthcare to those affected by plant closures and reforms unemployment insurance for those displaced by trade policies.

Barack Obama supported these types of policies when serving in Congress.  He made a promise on the campaign trail to rethink U.S. trade policy while president.  Ron Kirk’s job is to help make these promises a reality.