The Doha Round of global trade negotiations is dead. Even if Bush cuts a deal with Europe, it could not pass the new Congress. In mid-2007, when Bush asks for renewal of his fast-track authority -- presidential power to negotiate trade deals, while cutting Congress out of any role save a yes-or-no vote -- it will be amended drastically or batted down handily.
But if the free-trade era is over, what will succeed it?
A new era of economic nationalism. The new Congress will demand restoration of its traditional power to help in shaping trade policy. When the U.S. trade deficit for 2006 comes in this February, it will hit $800 billion, pouring more fuel on the fire.
Even before Tuesday, wrote the Journal, "the Republican-controlled Congress (had) already showed its sensitivity ... helping derail a deal by Arab-owned Dubai Ports World to purchase the commercial operation at five U.S. ports and approving millions of dollars to build a wall to stem the tide of illegal immigrants from Mexico."
A rising spirit of nationalism is evident everywhere in this election, not simply in the economic realm. Americans are weary of sacrificing their soldier-sons for Iraqi democracy. They are weary of shelling out foreign aid to regimes that endlessly hector America at the United Nations. They are tired of sacrificing the interests of American workers on the altar of an abstraction called the Global Economy. They are fed up with allies long on advice and short on assistance.
Other leaders in other lands look out for what they think is best for their nations and people. Abstractions such as globalism and free trade take a back seat when national interests are involved.
China and Japan manipulate their currencies and tax polices to promote exports, cut imports and run trade surpluses at America's expense. Europeans protect their farms and farmers. Gulf Arabs and OPEC nations run an oil cartel to keep prices high and siphon off the wealth of the West. Russians have decided to look out for Mother Russia first and erect a natural gas cartel to rival OPEC. In Latin America, the Bush's Free Trade Association of the Americas is dead.
We are entered upon a new era, a nationalist era, and it will not be long before the voices of that era begin to be heard.