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McCain, Obama target trade's impact

By David M. Dickson | Monday, August 11, 2008

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Foreign trade has played a key role in defining the economic policies of the presidential contenders, and the issue's perceived impact on jobs and wages could be the determining factor in the election's outcome.

The private sector of the U.S. economy has shed jobs during each of the past eight months. The unemployment rate, which has increased by one percentage point nationally in the past year to 5.7 percent, has been rising even faster in many states.

In recent months, voters consistently have ranked the economy, including jobs, as the most important issue of the presidential campaign. With economic growth much slower today than a year ago, the jobs-related battle over trade may become the most decisive issue of the presidential election.

This is especially true in pivotal states such as Florida, Pennsylvania, Ohio, Michigan, Missouri, Minnesota and West Virginia, where the unemployment rate has increased significantly during the past year.

On the margin, the increasingly popular perception that soaring trade deficits have caused unemployment to rise could flip one or more states from President Bush's column in 2004 to Sen. Barack Obama's column in 2008.

On the other hand, the trade sector has become the principal factor that has kept U.S. economic growth positive in recent quarters.

"Over the past year, exports have accounted for two-thirds of our nation's economic growth," National Association of Manufacturers (NAM) chief economist David Huether told The Washington Times. "Rising exports are the brightest light for our economy right now."

'Stark distinction'

"On trade, there is a stark distinction between the two candidates," said Sallie James, a policy analyst at the Cato Institute, which advocates unfettered trade.

Mr. Obama is "firmly in favor of government intervention," while Sen. John McCain "has an excellent and consistent record" supporting free trade, she said.