Redstate

Posted at 5:25pm on May 8, 2008 The GOP--On The Right Side Of The Trade Issue

And That's Not Just A Pun

By Pejman Yousefzadeh

In the event that people think the debate over free trade is smallball in this election cycle, let me note that in fact, the issue is attracting a whole lot of attention--and for all of the correct reasons; what we do in terms of formulating and implementing trade policy will have a tremendous impact on our economic growth, or lack thereof.

To that end, I want to direct reader attention to this and this, both of which show that trade policy is going to be a special focus of attention for the GOP come this fall. This is a good thing; Republicans are not backing down in the face of protectionist demagoguery. Quite the contrary, a pro-growth, pro-free market, pro-opportunity message is being spread that is in the best traditions of the Republican Party.

I don't feel like being reminded of Smoot-Hawley. I know that you don't either. And if we work hard enough in this upcoming election cycle, we won't be.

Posted in Economy | Free Trade | Protectionism — Comments (9)/ Email this page » / Read More »

Posted at 1:28am on May 8, 2008 It Cannot Be Stressed Enough

By Pejman Yousefzadeh

Both Hillary Clinton and Barack Obama are the most protectionist major Presidential candidates to come down the pike in recent memory. I say "recent" because, of course there is one particular President who was in the same league with both Clinton and Obama when it came to promulgating lousy trade policy and making the country suffer for it. I know that Charlie Black works for the McCain campaign and gets paid to throw elbows, but he is right to go where he goes verbally:

The growing shopping list of promises has also served further to sharpen the contrast with John McCain, the Republican nominee, who has staked out a robustly free-trade stance for the general election.

"The last time we had a protectionist president was Herbert Hoover [in office from 1929 to 1933] and look how that worked out," says Charlie Black, a senior adviser to Mr McCain. "We think we can win this debate in a general election."

The ghost of Hoover may be smiling now. The ghosts of Hawley and Smoot most certainly are. The rest of us have every reason to feel grim.

Posted in 2008 | Barack Obama | Economic Antediluvianism | Free Trade | Hillary Clinton | Protectionism — Comments (3)/ Email this page » / Read More »

Posted at 12:31am on May 7, 2008 If Pandering Is The Game . . .

By Pejman Yousefzadeh

It is generally agreed by those who are actually in the know when it comes to the specifics of trade policy and how free trade genuinely benefits America that both Barack Obama and Hillary Clinton are moving Heaven and Earth to pander to protectionists for votes. But as Daniel Ikenson points out, in the runup to tonight's primaries in Indiana and North Carolina, both pandering to free traders is the smart thing to do:

According to the U.S. Department of Commerce, Indiana's producers shipped $26 billion worth of goods to foreign customers in 2007 -- 14 percent more than the year before, and 80 percent more than in 2001. In fact, since 2001, the state's exports have grown at a rate one-third faster than U.S. exports overall. In North Carolina, producers shipped $23 billion worth of goods to foreign customers in 2007 -- 10 percent more than the year before, and 59 percent more than five years ago.

In 2007, exports accounted for 20 percent of U.S. manufacturers' total sales revenues -- the highest percentage in modern history. And nowhere in America is manufacturing more important to the economy than in Indiana, where the sector accounts for over 30 percent of the state's gross domestic product. Manufacturing is also more important to North Carolina's economy than it is to most other states, accounting for 22 percent of the state's gross domestic product, ranking it fifth among states in that measure.

In China, Canada, and Mexico -- the primary villains in the candidates' anti-trade narratives -- Indiana's producers are building relationships that are yielding extraordinary returns. Exports from Indiana to China increased by a whopping 36 percent between 2006 and 2007 -- twice the rate of total U.S. export growth to China, and nearly four times Indiana's exports to China in 2001.

Likewise, Indiana's exports to Canada and Mexico have grown 9 percent from 2006 and 67 percent from 2001, eclipsing overall U.S. export growth to the NAFTA countries in both periods. North Carolina's exports to NAFTA have grown 46 percent over the past five years -- to $7.4 billion.

Read on . . .

Posted in Barack Obama | Economy | Free Trade | Hillary Clinton | John McCain | Protectionism — Comments (2)/ Email this page » / Read More »

Posted at 9:32am on Apr. 29, 2008 Pass the Colombia trade pact

By Senator Kay Bailey Hutchison

President Reagan once observed, "The way to prosperity for all nations is rejecting protectionist legislation and promoting fair and free competition."
On April 10, the U.S. House speaker indefinitely blocked a vote on the pending Colombia Free Trade Agreement. The action by the Democrats sends the wrong message to trade partners around the world and squanders an opportunity to help Americans shouldering the burden of unemployment and a stalling economy.

Indeed, failure to ratify the trade agreement with Colombia denies economic growth opportunities for both the United States and Colombia, stifles competition and undermines efforts to create a safer, more stable world.

Economically, enactment of the agreement would level the playing field and foster fair trade by removing the costly tariffs levied on U.S. exporters trying to sell their goods in Colombian markets. The U.S. International Trade Commission projects that the deal would increase U.S. exports to Colombia by $1.1 billion a year, which in turn will create jobs for American workers.

In 2007, America exported high-quality beef, cotton, wheat, soybeans, fruits, vegetables and other goods to Colombia, with sales valued at $8.6 billion.

Although Colombia was able to export goods into the U.S. duty-free, American businesses and producers are still obligated to pay tariffs on exports to Colombia. The U.S. trade representative estimates that, since negotiations on the trade pact were completed in 2006, American products have been taxed nearly $1 billion in tariffs paid to Colombia. By eliminating this inequity, producers in the U.S. will have greater access to this lucrative market.

This would particularly benefit Texas, which led the nation in merchandise exports to Colombia last year, resulting in $2.3 billion in revenue for the state.

Read on . . .

Posted in Columbia | Foreign Affairs | Free Trade | Texas — Comments (27)/ Email this page » / Read More »

Posted at 10:48pm on Apr. 28, 2008 Free Trade And Its Effects On The Economy

By Pejman Yousefzadeh

While it is fashionable to say that free trade policies are responsible for just about every negative thing that is currently going on with the economy--not to mention also being responsible for the reason certain adolescents are unable to get dates for the prom--the facts tell us something different. I have said before and will say again that while there is no economic silver bullet, free trade is as close to a silver bullet as anything there is. That we are turning our backs on a policy that has brought us a tremendous amount of prosperity with very little attendant cost is nothing short of bizarre and appalling.

I still dream of a world where bloggers don't have to constantly bring this sort of thing up and where the mainstream media will take the lead in challenging--and calling on the carpet--candidates who trash free trade and all of the good that it does just to get votes. I keep hearing that this is supposed to be a tremendously important election. Someone will have to explain to me, therefore, why it is that the mainstream press seems all too willing to allow candidates in this tremendously important election to demagogue a tremendously important issue. Are journalists too incompetent to challenge people like Hillary Clinton and Barack Obama when they rabble-rouse on the issue of free trade? Or are they just not courageous enough to act on what they know to be true?

Posted in Economic Antediluvianism | Economy | Free Trade | Protectionism — Comments (11)/ Email this page » / Read More »

Posted at 2:39am on Apr. 28, 2008 Free Trade Will Fill Your Belly

By Pejman Yousefzadeh

I am surprised that it has taken this long, but finally, we have some press attention on the fact that shortage and price concerns relating to the food supply will be tremendously alleviated if we finally resolve to implement free trade practices. Tyler Cowen--whose intellectual rigor and peerless advocacy are, as always, tremendously appreciated by those who reject the Dark Side of the Force and its attendant policy agenda--makes this very case here. By all means, be sure to read the whole thing, but if you want an excerpt to sum things up, here it is:

Lately, it's become fashionable to assert that, in this time of financial market turmoil, the market-oriented teachings of Milton Friedman belong more to the past than to the future. The sadder truth is that when it comes to food production -- arguably the most important of all human activities -- Mr. Friedman's free-trade ideas still haven't seen the light of day.

Quite emphatically so. And the longer policymakers decide to remain troglodytes, antediluvians and Sith Lords about the matter of trade policy, the food price/food supply crisis will continue.

Posted in Economy | Free Trade | The Food Price/Inflation Crisis — Comments (0)/ Email this page » / Read More »

Posted at 2:30am on Apr. 28, 2008 Free Trade: The Courageous And Correct Approach

By Pejman Yousefzadeh

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 . . .

Posted in 2008 | Barack Obama | Free Trade | Hillary Clinton | John McCain | Protectionism — Comments (1)/ Email this page » / Read More »

Posted at 1:04am on Apr. 26, 2008 Guess Who Is In Favor Of Free Trade Agreements With Latin America

By Pejman Yousefzadeh

Behold. And relatedly, see this.

Heckuva job, Pelosi.

Posted at 11:50pm on Apr. 24, 2008 On Whether Poisoning The Well Can Sometimes Be A Good Thing

By Pejman Yousefzadeh

Nick Kristof is comparing Democrats who oppose a free trade deal with Colombia with George W. Bush. If this is what it takes to break the Congressional logjam over the trade deal, then I am all for it. Of course, the end result may merely be that the New York Times will get a lot of "how dare you compare me with that man!" e-mails, so this plan isn't really foolproof.

Posted at 12:41am on Apr. 23, 2008 Responsibility Politics

By Pejman Yousefzadeh

Two public officials made strong statements in favor of free trade and free markets today. One will never face an election again, but his support and his stance against trade demagoguery is most welcome:

President Bush chastised lawmakers on Tuesday for letting international trade deals falter in Congress and criticized Democratic presidential contenders for wanting to scrap or amend the vast North American free-trade zone.

At the close of a two-day summit, Bush, along with Mexican President Felipe Calderon and Canadian Prime Minister Stephen Harper, stood solidly behind the North American Free Trade Agreement. Under NAFTA, trade between the U.S., Canada and Mexico has swelled from roughly $290 billion in 1994 to an estimated $1 trillion by the end of this year.

"Now is not the time to renegotiate NAFTA or walk away from NAFTA," Bush said. "Now is the time to make it work better for all our people. And now is the time to reduce trade barriers worldwide."

The summit was overshadowed by Tuesday's Pennsylvania Democratic presidential primary race between Sens. Hillary Rodham Clinton and Barack Obama, who have threatened to pull the U.S. out of NAFTA or renegotiate it to push for more protections for workers and the environment.

With fears about job security already being fanned by downturns in the economy, trade has become a key issue of the presidential election. Bush argued that NAFTA has fostered prosperity in all three countries and that Clinton and Obama are wrongly using anti-trade messages to lure working class voters. Free-trade opponents say expanded international trade helps businesses, but threatens U.S. jobs and keeps wages from growing.

Bush warned that without NAFTA, migratory pressure from Mexico would be worse.

"If you do away with NAFTA, there's going to be a lot of Mexicans, more Mexicans out of work," Bush said. "It will make it harder on the border.

"So people who say, `Let's get rid of NAFTA' because of a throwaway political line, must understand this has been good for America and it's also been good for Mexico and Canada."

Read on . . .

Posted in Economy | Free Trade | George W. Bush | John McCain — Comments (22)/ Email this page » / Read More »

Posted at 4:38pm on Apr. 18, 2008 If You Are A Protectionist . . .

By Pejman Yousefzadeh

The Chinese will love you. And why not? If the Chinese are seen as a reliable trading partner and the United States is not, then China will likely beat the U.S. to being able to access markets around the world.

I certainly don't begrudge the Chinese as they try to do well in the field of international trade. But I certainly begrudge American "leaders" who apparently are bound and determined to have us unilaterally disarm and retreat behind protectionist walls--reconciling ourselves to less and less prosperity in the process.

Posted in Economic Antediluvianism | Economy | Free Trade | Protectionism — Comments (17)/ Email this page » / Read More »

Posted at 10:47pm on Apr. 17, 2008 I'll Make This Short And Sweet

By Pejman Yousefzadeh

Hillary Clinton accuses Barack Obama of being excessively pro-free trade.

Meanwhile, Barack Obama accuses Hillary Clinton of being excessively pro-free trade.

And while all of this goes on, world trade growth suffers:

World trade growth declined sharply in 2007 and is expected to slow further this year as financial turmoil and rising commodity prices further depress global economic activity, the World Trade Organisation said on Thursday.

Preliminary estimates suggest the volume of world trade rose 5.5 per cent in 2007, down from a robust 8.5 per cent in 2006.

Based on the latest gloomy global output forecasts by the International Monetary Fund, the WTO says trade growth this year could slip to 4.5 per cent, the lowest since 2002.

The candidate who can work to reinvigorate world trade will be the one who helps implement policies designed to bring about greater prosperity. Too bad that Clinton and Obama are too busy trying to define themselves as the anti-prosperity candidate.

Posted in Barack Obama | Economic Antediluvianism | Economy | Free Trade | Hillary Clinton | Protectionism — Comments (2)/ Email this page » / Read More »

Posted at 12:37am on Apr. 16, 2008 The Consequences Of Ditching The U.S.-Colombia Free Trade Agreement

By Pejman Yousefzadeh

As this article points out, it is going to be a whole lot harder to pursue an agreement in the context of the Doha round of multilateral trade talks now that fast-track authority for the U.S.-Colombia trade deal has been derailed and the deal itself has been put on the backburner indefinitely.

Incidentally, it is laughable to suggest--as the article quotes some as suggesting--that the real problem here is that the Bush Administration sought to craft a bilateral deal with the Colombians rather than paying exclusive attention to multilateral talks. My understanding was that the United States government could walk and chew gum at the same time and that the trade consequence of this was that we could pursue bilateral deals while at the same time working to hammer out a multilateral accord in the context of the Doha round. But here, apparently, we are being told by those who are sympathetic to Speaker Pelosi's efforts to keep the U.S.-Colombia trade deal from being ratified that it is just not right for the United States to engage in bilateral diplomacy and create bilateral trade agreements--not even when these agreements open foreign markets to American goods.

Additionally, we are told that the Speaker's actions may have been justified and responsible because they prevented an outright defeat of the trade agreement on the floor of the House. I have to think, however, that the reason the trade deal was put on the back burner was because Speaker Pelosi and her cohorts are protectionists--or at the very least, they want to do a good enough impression of protectionists to ensure that Big Labor supports Democratic candidates this fall with full enthusiasm.

Posted in Democrats | Economic Antediluvianism | Economy | Free Trade | Protectionism — Comments (0)/ Email this page » / Read More »

Posted at 1:06am on Apr. 15, 2008 Trade Follies

By Pejman Yousefzadeh

Either Nancy Pelosi doesn't understand the nature of the U.S.-Colombia trade deal, or she thinks that she can fool the public. In any event, she makes a hash of things in trying to explain why she allowed for fast-track authority to expire--thus putting the deal on the back burner:

Democrats will vote on a free trade agreement with Colombia only after the White House and Congress address pressing domestic economic concerns, House of Representatives Speaker Nancy Pelosi said on Monday.

"We still believe it is possible to bring the Colombia free trade agreement to the floor under the proper circumstances, but first we need to address the worsening economy," Pelosi told reporters.

Earlier, President George W. Bush said the pact was "dead" until Pelosi scheduled a vote.

"This has to be done in recognition not only of the concerns that we have about human rights violations of workers in Colombia, but based on the economic security of America's workers here in our country," the California Democrat said.

"We ask the president to, once again, bring his people to the table so we can move forward," she said.

Administration officials said they have been trying for months to engage Pelosi in talks on bringing the pact to the floor for a vote, only to have their efforts ignored.

One does not know whether to laugh or cry. American markets are already open to Colombia products. The deal opens Colombian markets to American products. How American workers do not benefit from having another market opened to the things they make is beyond comprehension.

But of course, there are a lot of myths associated with the rejection of the trade agreement. And concerns about American workers and the environment are Pavlovian and come about with the advent of any trade deal, the facts notwithstanding. Robert Zoellick was right and while I hate to say that I told you so, I did.

Posted in Democrats | Economic Antediluvianism | Economy | Free Trade | Protectionism — Comments (4)/ Email this page » / Read More »