Archive for the ‘Trade’ Category
Commenting on John McCain’s enthusiastic pro-Nafta speech this week north of the border, John Ibbitson writes:
Mr. Obama, on the other hand, is a NAFTA skeptic. “NAFTA and its potential were oversold to the American people,” his website declares. “Obama will work with the leaders of Canada and Mexico to fix NAFTA so that it works for American workers.” When Austan Goolsbee, Mr. Obama’s chief economic adviser, reportedly told Canadian diplomats that Mr. Obama’s statements on NAFTA were mere campaign rhetoric, the ensuing controversy embarrassed both the candidate and the Canadian government. Mr. Obama does appear to be trying to distance himself from some of his earlier tough talk, telling Fortune magazine that some of his trade rhetoric was “overheated and amplified.” But his support for increased trade ties with Canada is lukewarm at best, and he could actually prove hostile to the bilateral trading relationship.
I think the significant majority of Canadians who feel Obama’s politics more closely match their own political ideals (and therefore are inclined to favor his candidacy over McCain’s) are right not to worry too much about the Illinois senator’s nods to the protectionists and anti-globalists in the Democratic party. Nearly all parties of the left in rich democracies count within their ranks substantial numbers of people opposed to the further integration of the global economy. And the thing is, a number of states Obama either badly wants to win (Ohio) or absolutely must win (Pennsylvania) are home to large number of culturally conservative unemployed/marginalized blue collar workers who may abandon the culturally liberal Obama if they perceive he’s an excessively enthusiastic fan of free trade.
I believe it’s clear Obama knows the path to securing the living standards of working people lies in strengthening the safety net and not in erecting barriers to trade.
This is simply American presidential politics 101. There’s no serious prospect of an Obama administration’s igniting a trade war between the US and Canada. And in the unlikely event that a President Obama were to broach the subject of labor standards and worker protections with Ottawa (over the Nafta issue), Canadians would have nothing to worry about, since any resulting action would mean it is the US that would be beefing up its standards to match the practices of the more Western European-style Canadians.
Ezra seems skeptical about the ability of a President Edwards to enact his plans:
I can’t figure out what the Edwards plan is. How do you fight like hell to change the power balance in the system? What’s the pressure point? The vulnerability? I’ve heard some suggest campaign finance reform, but that has to pass Congress, first, and Congress is where the system exhibits its most profound rot. Does Edwards mean to use the bully pulpit to spark social organizing, as Reagan did with his tax cuts, creating enough voter pressure to scare Congress into constituent service before corporate fealty? If so, how will that work?
Well, it remains to be seen exactly how things will transpire, but I reckon there are two elements that speak to the superiority of the Edwards approach when it comes to effecting change:
a) Longer coattails. This has been written about extensively. Edwards will take more states against the Republican nominee than either Clinton or Obama, and this will give down ticket Democrats the greatest possible chance at gaining for their party larger congressional margins.
b) His fiery rhetoric probably is a big plus. I’m about as doctrinaire a free trader as you’re likely to find in liberal circles, but even I think Edwards’s views on trade may be useful if one’s goal is to strengthen the safety net and modify the tax code. The last thing the plutocrats want is anybody messing with their ability freely engage in the no-holds-barred form of capitalism that has made them jaw-droppingly wealthy. A populist president who enters Washington possessed of both deeper congressional majorities and the imprimatur of the voters for his anti Wall Street, pro worker views is probably in a far stronger position to exact meaningful concessions from the business community than either a connected DC insider or a national healer-in-chief.
Edwards surely is correct about the need to take power. It won’t freely be given.
Clive Cook talks about Dani Rodrik’s calm reaction to Hillary Clinton’s recent embrace of protectionism:
Dani is right of course that having doubts about the current multilateral arrangements does not make you a protectionist. Raising trade barriers, or turning your face against opportunities to lower them, is what makes you a protectionist. I also agree with Dani that taking a breather on trade agreements does not mean that the global trade regime will collapse. But collapse is an extreme scenario. The danger is not collapse, but erosion.
Dani argues that to maintain the openness we have, we must improve the legitimacy of the existing arrangements and build political support for liberal trade. Yet again, we agree. The issue that divides us is whether Hillary Clinton’s call for a time-out on trade advances or retards those goals.
Acknowledging that there can be winners and losers from trade, and developing better kinds of social insurance to ease the strain, makes sense. I am very much for that. But those policies do not envisage restrictions on trade. It is very hard to maintain that (a) trade is good for us in the aggregate and (b) it makes sense to go slow on trade liberalisation. If you are going to argue (b), before long you will find yourself failing to mention (a). And once you have forgotten (a), or decided it might actually be wrong, good luck in trying to “maintain the openness we have”.
If liberal trade is not good for America in the aggregate, why even try to maintain it? Why not join forces with outright protectionists and pursue the “fair trade” agenda without inhibition?…Once the US decides that liberal trade does not serve its collective interest–and Hillary, in effect, is proposing a time-out to think about this–the openness we have is indeed at risk.
I suspect most of the “US” — that is, the American people — already think liberal trade is against its collective interest. That horse has already left the barn. It’s a most deplorable state of affairs, and it unfortunately means that, in the party of the left, at least, the path to power requires mouthing protectionist bromides to peel off at least some protectionist voters.
I really doubt Hillary Rodham Clinton truly believes the fair trade nonsense. But she’s evidently concluded gaining the White House is going to require a certain amount of pandering. Nothing new there. Pandering is as muc a part of the American political condition as baby kissing or chicken dinners. I now suspect however, that, perhaps ironically, free trade’s best bet is to put a Democrat in the White House. The Republicans certainly don’t appear interested in making safety net improvements (heck, they don’t appear very interested in making the case for trade, either).
Perhaps after eight years of a safety-net-repairing Democratic administration, it will once again be morning in America for free traders.