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Monday, August 13, 2007
Michael Barone :: Townhall.com Columnist
Stuck in the past of trade
by Michael Barone
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One issue thats going to come up this fall that you havent heard much about is trade. Or at least I hope its going to come up. The Bush administration has submitted four free-trade agreements for approval by Congress -- with Peru, Colombia, Panama and South Korea. At the moment, their chances dont look very good. Democrats have taken to opposing FTAs almost unanimously. In July 2006, the House voted by only a 217-215 margin for the CAFTA, the FTA with four Central American countries and the Dominican Republic. House Democrats voted 188-15 against, House Republicans 202-27 for. In the Senate the vote was 54-45, with Democrats voting 33-10 against and Republicans 43-12 for. Those numbers suggest that the four pending FTAs are in severe trouble unless some votes are switched.

The administrations special trade representatives, Rob Portman and then Susan Schwab, responded to the CAFTA vote by obtaining more concessions on labor and environmental standards -- the reason (or pretext) many Democrats cited for voting against CAFTA. They worked closely with Charles Rangel, now Chairman of the House Ways and Means Committee, who has looked favorably on previous FTAs and sees such agreements as a means for poorer countries to improve the lot of their people. Which of course they are. As you learn in Economics 101, or in Adam Smiths Wealth of Nations if you want to go back farther, free trade benefits workers and consumers in both countries. Freer trade accounts for billions in improvement of the standards of living in the United States.

FTAs with countries like Peru, Colombia, Panama and South Korea benefits us more than them. They tend to place barriers on our manufactured products and not to honor our intellectual property rights. We let most of their stuff in with little or no duty. Approving these FTAs would open up fairly large markets to us. Colombia, with 46 million people, is the second-largest Spanish-speaking country after Mexico. Peru has 28 million and Panama, with a sizzlingly growing economy, 3 million. South Korea, with 48 million people, has the eleventh or twelfth largest economy in the world. Many politicians who have been voting against FTAs are drooling over the possibility of selling things to impoverished Cuba, which has only 11 million people. Someone might want to ask them why they havent shown similar enthusiasm for selling things to the CAFTA nations, which have 39 million, or the four nations with pending FTAs, which have 125 million.

You can sum up the reason why most congressional Democrats are voting against FTAs in six letters: AFL-CIO. The AFL-CIO did a splendid job raising money and turning out voters for Democrats in 2006. Their efforts were highly sophisticated and they may very well have made the difference in Democrats gaining their majorities. And the AFL-CIO is dead set against free trade. It was unhappy with the Clinton administration when it pushed through the NAFTA with Mexico in 1993 and predicted big job losses, and is not phased by the fact that the United States has produced nearly 30 million new jobs net since that time.

This is a classic example of interests of the past trumping interests of the future. Nearly half of all union members today are public employees, almost none of whom are likely to be replaced by workers abroad. But the union movement is still in mourning for the hundreds of thousands of jobs in auto factories, steel mills and other industries that disappeared in the recession of 1979-1982. The denunciations of NAFTA and the votes against CAFTA and the pending FTAs are protests against what happened in Detroit, Cleveland and Pittsburgh a quarter century ago.

Once upon a time, the positions of the parties were reversed. In 1962, the Kennedy administrations chief domestic priority was a free-trade bill, which most Democrats voted for and most Republicans voted against. A disabling amendment was offered by Sen. Prescott Bush, George W. Bushs grandfather. Then it was Republicans looking back with nostalgia to the days of William McKinley and Warren Harding. Now it is Democrats looking back with nostalgia to the days of million-plus membership in the United Auto Workers and United Steelworkers. If the pending FTAs go down, it will be bad news for the progressive governments of Peru and Panama and South Korea and a disaster for Colombia and its president, Alvaro Uribe, who has successfully been fighting the leftist FARC terrorists and is threatened by Venezuelas authoritarian leftist Hugo Chavez. It would be too bad if todays interests were subordinated by nostalgia for a past that will not return.

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About The Author
Michael Barone is a Fox News Channel contributor and co-author of The Almanac of American Politics. He is Senior Political Analyst for the Washington Examiner and a Resident Fellow at the American Enterprise Institute, a Fox News Channel contributor and co-author of The Almanac of American Politics.
 
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©Creators Syndicate
kim-programmersguild
You take a parable that I give and refute it on minutia. In reality US factories are much more productive than the 10:1 example that I gave. I used the 10:1 example because it makes it easier to see the point rather than trying to do math.

And nobody, I repeat that, NOBODY is in favor of polluted rivers, smoggy air, and unsafe working conditions. By the same token, nobody is in favor of spending a billion dollars per year reducing some minor chemical in water by 1 part per quadrillion. That is where we are at now. And protectionism in trade simply does NOT work. All it does is reduce the overall sum of money for everyone. If Smoot-Hartley didn’t demonstrate this to everyone with a brain that was above room temperature then too bad, we are doomed to another round of depression because people are stupid.

Vic on roads and bridges:
Since roads and bridges are funded by taxes, and taxes and no income or property tax is collected when Mattel makes toys in China, I think the dipweed might have a valid point - not having heard the comment myself.

The path the US is on is to import all goods from China, all services from India, and all energy from the middle east. Americans will be left with the scrap jobs that create no value: nursing, retail, public sector. The entrepreneurs will buy packs of gum and run around in traffic selling a stick at time, like they do in the 3rd world, since 3rd world status is Americas future if we don't PROTECT our assets. But somehow the same people who lock their door to protect their personal assets are opposed to PROTECTIONISM of our US assets.
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