Trading places

OPINION:

In contrast to the strong free-trade credentials of their party’s presidential nominees in 1992, 1996, 2000 and 2004, Democrats Hillary Clinton and Barack Obama are promising American voters and foreign nations that the United States will abandon decades of leadership in forging bilateral and multilateral trade agreements throughout the world. Properly judged by their rhetoric, they actually intend to roll back hard-won trade progress achieved on a bipartisan basis since the end of World War II. With the U.S. economy already likely in recession, with world economic growth slowing considerably and with the latest round of multilateral trade negotiations dead in the water, Mrs. Clinton and Mr. Obama are sending a terrible message to our trading partners, including the billions of people in developing countries who are to be the main beneficiaries of the stalled multinational trade talks.

The differences between Mr. Obama and Mrs. Clinton, on the one hand, and previous Democratic nominees, on the other, is stunning.

Indeed, the signature economic achievements of President Clinton (1993-2001) included the bipartisan passage (1993) of the North American Free Trade Agreement (NAFTA), the bipartisan vote (1994) to establish the World Trade Organization (WTO) and the bipartisan approval (2000) of permanent normal trade relations (PNTR) with China.

The crowning economic achievement of Vice President Al Gore, who became the 2000 Democratic presidential nominee, was his vigorous defense of NAFTA in a November 1993 televised debate with 1992 and 1996 protectionist presidential candidate Ross Perot. Mr. Gore countered Mr. Perot’s repeated prediction of a “giant sucking sound” of U.S. jobs heading for Mexico by presenting him with a framed picture of Republican Congress members Reed Smoot and Willis Hawley, whose 1930 tariff increase helped to turn a major recession into the Great Depression.

In 2004, the Democratic standard-bearer, John Kerry, had a trade record that included support for NAFTA, WTO and PNTR for China.

As Mr. Obama and Mrs. Clinton have competed across the industrial states of Wisconsin, Ohio and Pennsylvania — all of which will be major battlegrounds in the fall — they have fought over the issue of which candidate is more determined to withdraw from NAFTA unless Canada and Mexico agree to re-open the pact and offer unilateral concessions. Both candidates seem oblivious to the economic realities since the Gore-Perot debate. Since NAFTA went into effect on Jan. 1, 1994, the historical record reveals that (1) U.S. economic growth has averaged more than 3 percent per year as the size of the U.S. economy has increased by more than 50 percent; (2) nonfarm payrolls in the United States have increased by more than 25 million jobs; and (3) the average U.S. unemployment rate declined from 6.6 percent during the 10 years (1984-1993) before NAFTA became effective to 4.9 percent during the latest 10-year period (1998-2007).

In addition to trashing NAFTA, Mr. Obama and Mrs. Clinton adamantly oppose the free-trade agreement with Colombia, our strongest ally in South America whose strategic importance in the northern region of that continent is impossible to exaggerate. The Democratic candidates also oppose the pending free-trade pact with South Korea. Both agreements would significantly lower trade barriers to U.S. exports. Those barriers are much higher than the relatively minimal restrictions that apply to U.S. imports of goods from both nations.

Liberals rightly emphasize the need to raise the living standards of poor people of color throughout the Western Hemisphere, but in 2005 Mr. Obama and Mrs. Clinton voted against the Central American Free Trade Agreement (CAFTA), which will — no thanks to them — not only benefit U.S. workers and companies but also the poor workers of El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica and the Dominican Republic. As president, Mrs. Clinton, like her husband in the late 1990s, would intensely lobby Congress to re-instate trade-promotion authority (TPA) in order to pursue her trade priorities in negotiations with other nations. But she voted against giving President Bush TPA in 2002.

Both Mrs. Clinton and Mr. Obama supported a proposal that would have levied a 27.5 percent tariff on imports from China if that nation did not revalue its currency to a level deemed appropriate by American protectionists. A major priority of the Doha Development Round of multinational trade negotiations is to share the benefits of free trade with poor, developing nations populated by billions of people of color. However, both Mrs. Clinton and Mr. Obama rejected a proposal to reduce taxpayer-financed U.S. farm subsidies (which are routinely handed out to millionaire farmers) in order to increase the competitiveness of poor farmers around the world.

In contrast to the records of the two Democratic presidential candidates, the free-trade credentials of Republican John McCain are impeccable. Mr. McCain supported NAFTA, WTO, CAFTA, PNTR for China and TPA for the president. He opposed the 27.5 percent Chinese tariff; and he supports the free-trade agreements with Colombia and South Korea. He also favors reducing farm subsidies not only because it is the right policy, but also because it would jump-start the stalled Doha trade negotiations.

Instead of exercising responsible leadership on trade, as Bill Clinton has done for years, Mrs. Clinton and Mr. Obama seek to capitalize on the recession-induced fears of voters. In the Ohio and Wisconsin Democratic primaries, 80 percent and 72 percent of voters, respectively, told exit pollsters that “U.S. trade with other countries loses jobs” — despite the reality of the post-NAFTA employment record. As the Democratic Party has moved away from its decades-long embrace of trade, it is clear that whoever is the party’s standard-bearer in 2008 will be sending an anti-trade message that will frighten U.S. trading partners around the world.