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RPT-SCENARIOS: Kirk brings political skills to US trade post

Published 12/19/2008, 04:20 PM

(Repeats to fix headline)

WASHINGTON, Dec 19 (Reuters) - Former Dallas Mayor Ron Kirk, chosen by President-elect Barack Obama on Friday to be U.S. trade representative, brings a politician's skill to a job that puts him on the frontline of trade battles in Congress.

Kirk, who is not well-known in Washington trade circles even though he worked here in the 1980s and 1990s, would be the first black man to fill the post. As an outsider, he carries no scars from the sometimes bitter trade fights between Republicans and Democrats over the past eight years.

If confirmed, he would hold the title of ambassador and is likely to spend much time abroad. But he has far less international recognition than Obama's pick to lead the Commerce Department, Bill Richardson.

Here are some details on his background and the difficult issues he will confront:

HIS BACKGROUND

From 1995 until 2001, Kirk was the mayor of Dallas, the ninth largest city in the United States. He is currently a partner in the Dallas office of the law firm Vinson and Elkins, specializing in public finance and public policy.

He campaigned for Obama, saying that Hillary Clinton was too divisive a figure to effectively govern.

Kirk ran for the U.S. Senate in 2002, but lost that open-seat contest to current Sen. John Cornyn, a Republican.

He was an aide to Sen. Lloyd Bentsen during the 1980s and followed Bentsen to the Treasury Department in 1993, when President Bill Clinton tapped the Texas Democrat to be his first Treasury Secretary.

NORTH AMERICAN FREE TRADE AGREEMENT

Obama has promised one of his first acts in office would be to call the president of Mexico and prime minister of Canada "to fix NAFTA" by adding stronger labor and environmental provisions to the pact.

It will be Kirk's job to negotiate those changes to the 14-year-old agreement, and he will face pressure from U.S. business groups not to make concessions that would undo the many benefits they now enjoy.

Although many doubt there will be significant changes to the pact, Obama has criticized NAFTA for giving broad rights to business investors and only paying "lip service to the rights of labor and the importance of environmental protection."

CHINA

The U.S. trade deficit with China hit a staggering record $256.2 billion last year, more than tripling since President George W. Bush took office in early 2001.

Democratic lawmakers repeatedly pressed Bush to take action at the World Trade Organization against China's currency practices, which they said have unfairly boosted China's exports and and curbed its imports from the United States.

Bush refused, but Obama has raised expectations of more aggressive action. Kirk will also face pressure to bring other cases against China to help Obama follow through on his pledge to beef up enforcement of U.S. trade agreements.

WORLD TRADE TALKS

Many U.S. trading partners hope Obama and Kirk will move quickly to bring seven-year-old world trade talks to an end as an insurance policy against increased protectionism during a time of global economic stress.

But U.S. farm groups and manufacturers are deeply unhappy with proposed terms of the agreement because they believe it would not give them enough new export opportunities in exchange for concessions they would have to make.

The stalemate raises doubt about ability of countries to reach a new international agreement to address global climate.

Those negotiations will also be a test of Obama's trade diplomacy, with carbon-intensive U.S. industries like steel demanding that any agreement not leave developing country competitors with a big cost advantage.

OTHER FREE TRADE AGREEMENTS

Obama and Kirk will face decisions on free trade agreements with Colombia, South Korea and Panama that Bush could not persuade Congress to pass.

Kirk will need all of his political skills to find a way forward on the Colombia agreement, which U.S. labor groups strongly oppose on the grounds that Colombia President Alvaro Uribe has not done enough to stop murders of trade unionists.

However, the United States' failure to approve the pact is seen in Latin America as a sign of U.S. indifference to one of its staunchest allies in the region.

Kirk also faces the daunting challenge of persuading South Korea to renegotiate auto provisions of its free trade deal with the United States, after Obama complained they were too heavily tilted in favor of Seoul.

Some lobbyists believe Obama could submit the Panama agreement to Congress for a vote fairly early in the first year. It is least controversial of the three pacts.

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