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Global Scale by Coletta Kemper 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.

By  Coletta Kemper

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 markets.

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 goods.

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 to say:

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 written.

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.

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