Brown urges U.S. to shun protectionism

• Article
• Comments ()
• Click-2-Listen
• Videos

By David M. Dickson and Kara Rowland

British Prime Minister Gordon Brown implored Congress on Wednesday to resist the impulse to erect barriers to trade to protect industry from the "economic hurricane" raging around the world.

Mr. Brown told a rare joint session of Congress that a "global New Deal" is needed to energize the world's tattered free markets and called for uniform international rules to stabilize the banking industry.

He also called on the United States to help the world fight climate change and emphasized the special relationship between America and Britain, pledging continued support to combat terrorism.

With less than a month before he will host the Group of 20 economic summit in London, Mr. Brown devoted most of his speech to the global economic crisis.

"An economic hurricane has swept the world, creating a crisis of credit and confidence," Mr. Brown told Congress, where members of both parties have become more skeptical of the world trading system.

"So should we succumb to a race to the bottom and a protectionism that history tells us that, in the end, protects no one? No," the prime minister said. "We should have the confidence that we can seize the opportunities ahead and make the future work for us."

Free-trade advocates were pleased.

"I'm delighted he said that," said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics.

"It suggests that the anti-protectionism theme will get important billing in London next month. Protectionist smoke is fairly serious now, and Mr. Brown is trying to dampen it down," Mr. Hufbauer said.

In European capitals, fear has been rising about President Obama's ability to resist growing protectionist tendencies in Congress, especially among Democrats.

Trading partners detected budding protectionism when Congress inserted a "Buy American" provision into last month's stimulus legislation.

The Buy American version in the House received unanimous, bipartisan support in the Appropriations Committee. An even more stringent Buy American provision percolated in the Senate. But the stimulus bill the president signed into law last month required the Buy American provision to be "applied in a manner consistent with United States obligations under international agreements" - a condition embraced by the White House during the legislative process.

Mr. Obama's two immediate predecessors in the White House were strong proponents of globalization and worked hard to pass trade legislation. Since becoming president, Mr. Obama's trade rhetoric has changed.

During the Democratic primaries last year, Mr. Obama promised to renegotiate the North American Free Trade Agreement in order to bolster its labor and environmental provisions.

"If he wanted to win the Democratic presidential nomination, he really had no choice," said Jagdish Bhagwati, an economics professor at Columbia University who is a staunch advocate of free trade.

"I have always been optimistic because many of Mr. Obama's advisers are pro-trade and centrist," Mr. Bhagwati said. "But in this administration, where unions are very powerful, there are constraints on how big a role pro-trade advisers can play."

"We've got to be very careful about any signals of protectionism," Mr. Obama said during a Feb. 19 press conference in Ottawa with Canadian Prime Minister Stephen Harper, alluding to Congress' protectionist sentiments reflected in the stimulus bill. "Because as the economy of the world contracts, I think there is going to be a strong impulse on the part of constituencies in all countries to see if they can engage in beggar-thy-neighbor policies."

Whether Mr. Obama is adjusting his trade views, there can be no doubt that Democrats in Congress have much different positions on trade today than they did 15 years ago.

When Congress approved NAFTA in November 1993, a total of 49 percent of Senate Democrats and 40 percent of Democratic House members voted for it. When Congress voted in 2005 to approve the Central American Free Trade Agreement, which involved much smaller trading partners in much greater poverty, only 23 percent of Democratic senators and 7 percent of Democratic representatives supported it. Since 2005, congressional Democratic views against free trade have intensified.