Faltering on Free Trade

Posted: Feb 06, 2008 12:01 AM
Faltering on Free Trade

“Lead, follow or get out of the way,” the saying goes. Unfortunately, the U.S. is refusing to lead on one crucial issue. And it could prove costly for us all.

That issue is free trade.

For decades, the U. S. led the world in promoting it. Democrats and Republicans voted to lower tariffs and open markets; goods and services flowed more freely across borders. Look no further than NAFTA, negotiated by Republican George H.W. Bush and enacted by Democrats.

Yet even as Americans enjoy job growth, cheaper goods and low inflation, support for free trade is losing steam. First, Congress failed to renew the president’s Trade Promotion Authority. And now, instead of signing new trade deals, Washington is letting potential pacts bog down.

Consider the pending free-trade agreement (FTA) with Colombia, our best friend in a region increasingly under the sway of Venezuela’s Hugo Chavez, a populist bully.

The Bush administration worked closely with President Alvaro Uribe to fight drugs, build a stable, democratic Colombia and negotiate a trade deal beneficial to both countries. But the congressional leadership, pressured by protectionist allies in Big Labor -- and perhaps out of a partisan desire to deny President Bush a victory -- postponed a vote on the Colombia FTA indefinitely.

This makes us look bad. The message: The U.S. is a faithless, fickle ally. Ironically, we spend billions on Venezuelan oil, strengthening Chavez even as he vows to choke our economy. Yet we refuse to reward a staunch ally -- Colombia.. Furthermore, many Colombian products already enter the U.S. duty-free under the Andean Trade Preference Act, so Congress’ refusal to make this access permanent hurts everyone -- both Colombians and the many Americans hoping for jobs created by increased U.S. exports.

All this plays right into Chavez’s hands. His big idea for Latin America is a political and trade bloc linked to China, Russia and Iran, able to counter U.S influence. Chavez wants clients, not partners, so a Colombia spurned by the U.S. and turned to the left fits with his aspirations.

Chavez labels President Uribe a “pawn of American imperialism” and undermines our efforts to bolster security and prosperity in the Andes. For example, Chavez denounces U.S.-style free-trade pacts, saying they’re “exploitive” and advance “savage capitalism.” Last year he almost derailed our FTA with Costa Rica.

Chavez, incidentally, isn’t the only one who benefits when American lawmakers turn their backs on free trade. While Congress was putting our FTA into the deep freeze, Canada announced its own bilateral trade talks with Colombia, seeking some of the very trade benefits we may pass up.

Benefits from free trade are real. The Institute for International Economics, a Washington-based think tank, estimates, “the U.S. economy is now richer by about $1 trillion per year as a result of its further integration with the world economy since 1945.” The best way to keep increasing this amount is through free trade.

As President Bush reminded us in the State of the Union address, Colombia is “a friend of America that is confronting violence and terror and fighting drug traffickers.” It has more than earned the trade benefits Congress refuses to approve.

Instead of leading or even following, the United States looks as if it’s “getting out of the way” when it comes to free trade. If so, expect our competitors to become the new trade leaders. They’ll enjoy the benefits, while we wonder how we managed to squander decades of American leadership.