Free Trade: The Courageous And Correct Approach
By Pejman Yousefzadeh Posted in 2008 | Barack Obama | Free Trade | Hillary Clinton | John McCain | Protectionism — Comments (1) / Email this page » / Leave a comment »
The responsible thing for Presidential candidates to do when it comes to trade policy is to be in favor of free trade and reduced--if not eliminated--trade barriers.
Dominic Lawson shows that when it comes to trade policy, Barack Obama shows no hint of political courage and that conversely, John McCain shows no absence of it:
Barack Obama has lost it. Not the Democrat nomination - he remains the favourite in that increasingly bitter battle; no, what he has lost is the aura of invincible charm which had hitherto repelled all incoming fire, like some invisible force-field.
That has disappeared with the publication of his remarks to a private dinner for wealthy Democrat donors in San Francisco about his difficulties in attracting support from the blue-collar vote in the de-industrialising Midwest. That sophisticated audience laughed - it's on tape - when he told them how such people found it hard to buy the message of "a 46-year-old black man named Barack Obama".
Oddly, it was not this explicit imputation of racism against people whose votes he had failed to capture which has caused Obama the biggest problem. It was his follow-up remarks: "They get bitter, they cling to guns or religion or... anti-trade sentiment as a way to explain their frustrations".
The most extraordinary thing is that Obama has actually been pandering to the "bitterness" he identified - the "anti-trade sentiment". In the rust belts of Ohio and Pennsylvania the Senator from Illinois has lost no opportunity to blame America's economic woes on the free-trade treaty with Canada and Mexico (Nafta) - which had been enacted by President Clinton.
Obama is one of three Congressional sponsors of "The Patriot Employer Act", which seeks to give preferential tax status to American companies that choose not to invest overseas. His anti-globalisation rhetoric goes far beyond criticism of free-trade deals such as Nafta. Obama told voters in New Hampshire:"I would stop the import of all toys from China". China supplies 80 per cent of the toys sold in the US, so that's one heck of a pile of embargoed fluffy bunnies.
Obama's electoral calculations, at least, are rational: recent polls suggest that three quarters of voters believe that international trade has "made things worse for Americans". So as not to appear "protectionist" - perish the thought - Obama graciously concedes that "not every American job lost is due to trade". Not every job? The true figure - according to the apolitical US Council of Economic Advisors - is that only 3 per cent of US job losses can be attributed to "outsourcing".
Other figures which are never discussed are those measuring the "insourcing" of jobs, when companies from foreign countries have invested in the US. The value of those investments has been staggering - the biggest secret in a debate conducted (at least in the Democrat primaries) at a shocking level of ignorance.
The two Democrat candidates have made frequent attacks on the multi-billion dollar US trade deficit with Canada and Mexico: what Mrs Clinton and Mr Obama never acknowledge is that almost 95 per cent of the growth in that deficit since 2000 is entirely attributable to oil and gas imports. Are they seriously suggesting that America would be better off buying oil from countries without preferential trade status, such as Chavez's Venezuela or Ahmedinejad's Iran?
Read on . . .
Good question. And here is Lawson's description--entirely apt--of McCain's stance:
John McCain is not quite of an age to recall all that personally; but it must help to have been born in the 1930s - he is absolutely not prepared to pander to protectionism in the manner of his competing Democrat opponents. Not only has he refused to appease such "anti-trade sentiments", he has been courageous in tackling them head on.
This week McCain travelled to recession-hit Youngstown, right in the heart of the old Ohio steel-producing belt - where Clinton and Obama had been most strident in their anti-free trade rhetoric--and told a town hall meeting: "The biggest problem is not free trade, but our inability to adjust to a new world economy. I can't look you in the eye and tell you that I believe those jobs are coming back... [but] protectionism and isolationism have never worked in American history."
Reporters described McCain's speech as "risky". Indeed it was - he will need to win the support of such town hall meetings to secure the Presidency. It was a demonstration of pure political courage - something which Barack Obama has yet to provide: I can't find a single speech of his - brilliantly constructed and delivered as they are - in which he did anything of the kind.
Read the whole thing. And read this as well, especially if you are from Ohio and think that free trade is responsible for your state's economic woes and also think that the pending trade deal with Colombia will only serve to make matters worse:
The state's exports are growing every year, according to an Ohio Department of Development report released last month. In 2007, Ohio companies exported more than $42.4 billion worth of products, up from $24.8 billion in 1999.
The state's biggest trading partner by far is Canada, not known for human-rights abuses, anti-worker climate or cheap labor. More than $19.6 billion worth of Ohio goods were sold in Canada in 2007, compared with less than $3 billion in Mexico.
Colombia is an even smaller player, but exports are growing in a big way, up from $73.5 million in 2005 to nearly $133 million last year. You would have to think the trade deal would generate more business for Ohio companies.
The oft-cited statistic is that Ohio has lost 200,000 manufacturing jobs since 2000. Many of the Mahoning Valley's lost jobs occurred well before NAFTA was signed in 1993.
Meanwhile, in 2005, the most recent year available, 308,500 Ohio jobs were related to manufactured exports, according to the Department of Development report.
McCain has spread this message rather than pander to protectionist sentiment in Clintonian or Obamanian fashion. If we are serious about electing a President who tells us what we need to hear rather than what we want to hear, we will keep this fact in mind and make sure that John McCain is rewarded, not punished, when November rolls around.
Volunteer
Listening to Mr. O on FOX Sunday, showed his lack of fire in the belly for the continuing contentious camapign.
He simply repeated his standard speech, trying valiantly to say nothing offensive to Chris or the audience.
Now, free trade. Pres. Bush and the Mexican Pres, as well as the Canadian Priemer, appeared to hold hands in a show of solidarity on C Span. The drive bys pretty much ignored the appearance.
Economics 201 says, any nation needs to trade, to sell and to buy goods if the nation wants to survive. Simple road side stand sales techniques says sell as much, to as many, as you can.
It is neat rhetoric to say we will keep your job, we will save your bacon, we will, we will, but the devil is in the details. If the folks in NC and Indiana want the Guvmnt, run by the controllers from the Left, to actually fulfill the rhetoric promises, they will live to regret thier choice.
Control via prices and wages and trade agreements, that rest in some Washington DC Agency in basket is doomed to failure. Market forces, entrepenurship, new technology, new methods of dealing with the folks at the other end of the block, are the best controls a thriving economy can use.
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