To Have and Have Not
Two political perspectives on foreign
trade don't hide the fact we need to keep the trade doors
freely swinging open.
In July, world trade talks came to a screeching halt after
seven years of painstaking negotiations.
Even though the world trading partners agreed on 80% of the
issues, they just couldn’t get past the elephant in the
room—disagreement between the developed and developing
countries over agricultural subsidies and access to
The final roadblock in the Doha Round talks was between
India and the U.S. India is arguing for agricultural safeguards
to protect developing markets from surges in foreign
agricultural imports, particularly from large exporting
countries and regions that richly subsidize agricultural
Only 25 World Trade Organization countries, including the
U.S., are allowed to subsidize products and then only if they
agree to lower subsidy levels. Developing countries often use
high tariffs to protect their markets.
A proposal allowing developing countries to raise tariffs if
imports surge to a certain percentage was ultimately rejected
by the U.S. and India. The U.S. wanted the trigger to be
higher, and India wanted it lower. The U.S. argued that the
trigger India was asking for could roll back tariff levels to
unacceptably high pre-Doha levels.
WTO Director-General Pascal Lamy says a deal is still
possible before the end of the year. He may be overly
optimistic, but at least they are willing to talk.
What’s troubling me is the undercurrent of
protectionism running through the talks; moreover, the slowdown
in the global economy is fueling a protectionist trend that
could damage local economies more than it protects them.
Americans feel threatened by the foreign invasion of cheap
goods, illegal immigration, outsourcing of jobs, and foreign
ownership of American institutions, including Anheuser-Busch
and the Chrysler building. Jobs and the economy are top
election issues, and politicians have to walk a fine line
between advancing free trade and protecting jobs at home.
If the talks do get back on track, the next
president’s viewpoint will affect the talks and
Congressional approval. Here’s what the candidates have
Open markets for American goods and
services. McCain wants to lower barriers to trade for
American goods and services abroad. The fact that 95% of the
world’s customers lie outside of our borders provides an
opportunity for American workers. McCain believes we need to be
at the table when the rules for access to those markets are
Obama says he will fight for a trade policy that opens up
foreign markets to support good American jobs.
Jobs and the economy. Obama
believes trade with foreign nations should strengthen the
American economy and create more American jobs. To help
American workers adapt to new economic conditions, Obama
proposes updating the Trade Adjustment Assistance program by
extending it to service industries and by providing retraining
assistance to workers in sectors of the economy vulnerable to
dislocation before they lose their jobs.