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Tropical_Man 68M
6573 posts
11/6/2008 4:43 am
Paradise

By E. Thomas McClanahan, Kansas City Star Editorial Page columnist

Recently Canada and the European Union agreed to begin talks on a free-trade agreement.

You didn’t hear much about that over the din of the presidential campaign. But if Barack Obama wins, this pattern – other countries forging commercial agreements that leave us out – is likely to repeat.

That’s because Obama, if you believe what he says on the campaign trail, would be the most anti-trade president since Herbert Hoover. That’s an ominous prospect, when given that higher tariffs – and higher taxes – were the two big policy mistakes that worsened the Great Depression.

Nobody’s proposing a tariff bill as bad as the Smoot-Hawley measure, which Hoover infamously signed. But with the world facing a financial crisis, the arrival of an anti-trade U.S. president would come at an especially bad time.

Count on it: Any trade-restricting measure imposed by Washington will be quickly imitated by other countries, and that will choke off American exports – currently one of the few bright spots in the economy.

Obama’s stance on trade would mark a clean break with the bipartisan notion that trade is solidly in the national interest. Since World War II, presidents of both parties have led the way on trade.

But Obama is against the free-trade agreement with Colombia, already negotiated and signed and only awaiting congressional approval. He’s against the free-trade agreement with South Korea. He voted against the Central American Free Trade Agreement.

Worse, he’s threatened to renegotiate the North American Free Trade Agreement to make sure it “works for American workers.” He says he’d make changes unilaterally if Mexico and Canada refuse – changes that would no doubt crimp the import flow from those countries.

Does he actually mean that? During the primaries, Obama economic adviser Austan Goolsbee told a Canadian diplomat that Obama’s statements should be discounted as mere campaign rhetoric. But when Goolsbee’s remarks were made public, the Obama campaign repeated the renegotiate-NAFTA pledge.

John McCain, by contrast, has a strong free-trade record. He’s against any reopening of NAFTA. He favors the accords with South Korea and Colombia. And unlike Obama, he would lower the nation’s ruinous farm subsidies, as a path toward a far-reaching global trade pact.

The United States, as one of the world’s great exporting nations, depends on open markets abroad. But the benefits of trade have become so familiar that many Americans take them for granted.

True, some workers lose in foreign competition. But most job losses come from technological change and productivity increases, not from changes in trade flows. And the overall benefits of trade are impressive.

Over the last two decades, net payroll employment has increased by 36 million. The nonpartisan Peterson Institute for International Economics says that since 1945, trade has added about $9,000 to average household incomes. Foreign competition keeps our own industries on their toes. It helps hold down inflation, and it broadens the range of choices for consumers.

Obama’s stance on trade raises a question. Is there any issue on which he is prepared to cross organized labor?

Unions are naturally hostile to trade, which is hardly a shocker. They exist to protect their members from competition, but presidents are supposed to represent the entire nation, not just the small percentage of the workers who are members of unions.

For generations, the United States has provided the leadership that maintained a global trading system that has become an ever-increasing support for our economy.
A break in that tradition would be a tragedy, and would presage a beggar-thy-neighbor world of rising commercial barriers and rising hostility in general.

If Obama wins on Tuesday, one can only hope that on trade he’s been lying through his teeth.