by Ray Keating
In 2008, presidential
candidate Barack Obama was a protectionist who wanted a do-over on NAFTA, for
example. Sound familiar? Yes, candidate Obama held much the same positions on
trade, that is, being anti-free trade, as does presidential candidate Donald Trump
today. Once in office, President Obama went silent on trade for his first term,
and eventually got around to signing trade deals negotiated by President George
W. Bush, and now even favors the Trans-Pacific Partnership trade accord, though
he has spent little, if any, political capital in making it become a reality. This
Long Island Business News column from early January 2009 raised similar
questions about Obama then as we would face if Trump actually won the race for
president in 2016 …
Will the real President-elect Barack Obama please stand up
when it comes to international trade?
Well, apparently, not just yet. Unfortunately, trade policy
presents another uncertainty for entrepreneurs, businesses and the U.S. economy
in general.
The President-elect’s position on trade matters a great
deal. Consider the importance of exports, for example, after the 2001
recession. Export growth accounted for 20 percent of GDP growth from 2002 to
2007.
Unfortunately, Obama had a thin and contradictory record on
trade during his brief time as a U.S. senator. He voted in favor of trade
agreements with Oman and Bahrain, but voted against the Dominican
Republic-Central America Free Trade Agreement (CAFTA).
While vying for the Democratic Party’s presidential
nomination, Obama highlighted his opposition to pending trade deals with
Colombia, South Korea and Panama, and declared a desire to renegotiate the
15-year-old North American Free Trade Agreement. It was a disturbing display of
protectionist pandering for votes.
But during the general election against John McCain and
since his victory on November 4, Obama’s protectionist talk has pretty much
disappeared. It has been replaced by silence.
Indeed, President-elect Obama seems to have everyone
guessing on trade. Will he choose the generally pro-free trade path followed by
most U.S. presidents for over three-quarters of a century, or flirt with
protectionism for the first time since the bad old days of Herbert Hoover?
Do Obama’s picks to fill key posts in his White House offer
any clues? Well, again, the signals are mixed, but offer some hope.
U.S. Rep. Hilda Solis, California, is Obama’s choice for
labor secretary. The AFL-CIO, according to The New York Times, pushed Solis for
the position. Since being elected to Congress in 2000, Solis seems to have
never met a free trade accord she liked.
However, more encouraging are the President-elect’s
selections for Commerce Department secretary and U.S. trade representative.
Obama’s choice for trade representative is former Dallas
Mayor Ron Kirk. He has been a pro-free trade voice, including advocating the
construction of a “NAFTA Freeway” to speed the transportation of goods between
the U.S. and Mexico, according to The Wall Street Journal.
The Commerce Secretary-designate is New Mexico Governor Bill
Richardson. In a June 2008 interview at the Council on Foreign Relations,
Richardson said, “I’m a free-trade Democrat. I’m also an endangered species in
the Democratic Party.”
Unfortunately, Richardson is right about his own party. In
recent times, the Democrats have moved in a protectionist direction at the
urgings of labor unions and environmental activists. While rejecting the
“protectionist” label, these groups advocate inserting labor and environmental
regulations into trade agreements. That is, they want to impose U.S. domestic
regulations on other nations. But if such requirements have real teeth, then
other nations will simply not enter into trade agreements, thereby limiting
opportunities for U.S. entrepreneurs and businesses.
This version of protectionism is not exactly a new trend.
The free trade leanings of President Bill Clinton’s administration during the
1990s, for example, clearly were an exception among Democrats. In fact, Clinton
needed strong support among Republicans to get NAFTA passed. The sentiment
among congressional Democrats has only become more stridently anti-free trade.
President-elect Obama has two – and only two – choices when
it comes to trade. He can remain linked with the protectionists in his own
party. Or, Obama can join with his Commerce secretary and trade representative
by becoming that rare breed, i.e., a free trade Democrat.
Given the current economic challenges, Obama would have an
excuse for shifting his position. After all, U.S. businesses and workers need
to be free to capitalize on all possible opportunities. That means passing
bilateral and multilateral trade agreements that reduce governmental barriers
to trade.
After being sworn into office, Obama should push Congress to
pass the pending trade deals negotiated by the Bush administration with
Colombia, South Korea and Panama. That would send a positive signal to
businesses and markets that the threat of protectionism during an Obama
administration is dead.
The next steps would be to move aggressively on free trade
agreements covering from North America to South America, and the Pacific Basin.
If President-elect Obama is serious about real change, about
working in a bipartisan manner, and about getting the U.S. economy back on
track, then free trade is a must.
______________
Mr. Keating is an
economist and novelist who writes on a wide range of topics. His Pastor Stephen
Grant novels have received considerable acclaim, including The River: A Pastor
Stephen Grant Novel being a finalist for KFUO radio’s Book of the Year 2014,
and Murderer’s Row: A Pastor Stephen Grant Novel winning for Book of the Year
2015.
The Pastor Stephen
Grant Novels are available at Amazon…
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