- The Washington Times - Wednesday, June 9, 2004

Ronald Reagan’s independent thinking on international trade is best illustrated by the varied and profoundly contradictory descriptions of his policy. Mr. Reagan broke ground in trade. He pushed for a new global trade round and, as part of those talks, presciently called for a 10-year phase-out of all direct and indirect agricultural subsidies that distort trade and barriers to farm exports — the main sticking points of today’s ongoing trade round. He signed in 1988 a free-trade agreement with his Canadian counterpart and laid the groundwork for NAFTA. Mr. Reagan also angered staunch free traders by leveraging America’s economic prominence to challenge what he saw as unfair trade practices.

Mr. Reagan’s dedication to opening markets wasn’t heralded universally during his presidency. In a March 1988 column for The Washington Post, Mark Shields criticized Mr. Reagan for his “blind devotion to the doctrine of free trade.”

Some high-profile free-traders gave very different accounts. For Mr. Reagan, liberalizing global markets entailed knocking down unfair trade practices, particularly those harmful to U.S. industry. In this pursuit, Mr. Reagan negotiated with foreign governments, in some cases successfully. He also was willing to put up trade barriers to challenge — or at least protect U.S. industry from — those practices.

Japan was most prominently the target of those challenges. In 1986, the Reagan administration reached an agreement with the Japanese government that would have prevented Japanese computer memory chip makers from dumping their products in foreign markets. About a year later, the administration placed a 100 percent tariff on $300 million worth of Japanese electronic products, in response to what the administration felt was Japan’s failure to uphold the agreement.

Mr. Reagan’s measures to protect Harley-Davidson Motorcycles perhaps are more widely remembered. In 1983, Mr. Reagan imposed a sliding-scale, five-year tariff, which started at 45 percent, on Japanese heavy motorcycles. He removed the tariffs in 1987, a few months early. Mr. Reagan also negotiated an agreement with Japan that limited its auto exports, and negotiated agreements with 18 different countries to reduce steel exports.

In response to these and other policies, Sheldon Richman said in a 1988 report for the Cato Institute: “Only short memories and a refusal to believe one’s own eyes would account for the view that President Reagan is a free trader.” He was similarly criticized by Milton Friedman in an April 1987 op-ed for the Wall Street Journal.

Mr. Reagan has been widely described as a free-trade ideologue. More accurately, Mr. Reagan was a trade pragmatist. He managed to keep relations cordial while trade disputes heated up. His willingness to put up trade barriers may have been just as influential as his efforts to tear them down.

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