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In the 1990's free trade beat fair trade in the polls. In this first 21st century decade, the opposite is true. I prefer "smart trade," a phrase used by Bob Baugh of the CPA board. But the trend is the point, not the exact label.
Democrats are divided over trade. Let's use the Peru FTA vote from last November and December as a proxy. A majority of Senate Dems supported the Peru FTA last year, with the freshman Dem Senators primarily voting no. In the House, the opposite was true, a slight majority of House Dems opposed the Peru FTA. The Dem voters will likely send more trade skeptics to Washington.
Federal Republican legislators have large majorities favoring so-called free trade, which is quite a distance from the grass roots voting Republicans, if polls are to be believed. The Republican voter has not yet brought their leaders to heel, but that convergence will probably have to happen.
The WSJ says today that trade is substantially impacting this year's election.
First, the reporter's rhetoric:
The U.S. has led the way in efforts to lower barriers to global trade since World War II, despite opposition from unions and voters hurt by foreign competition. This election could put trade-liberalization on ice for a while.
This statement is overbroad. Tariffs per se have been lowered. But have been replaced by currency manipulation, border adjustable taxes and imaginative foreign subsidies.
Remember this: The U.S. is a unilateral free trader in a world of mercantilists.
Senator Gordon Smith is having trouble getting re-elected in Oregon.
One Republican free trader feeling the heat is Oregon Sen. Gordon Smith, who likes to remind voters that one in five jobs in the state depends on overseas trade. He has supported the North American Free Trade Agreement and voted for the Central American Free Trade Agreement. "Oregon is probably the most trade-dependent state in America," Sen. Smith said. "Portland is called Portland because it's a port." ...
"They call it free trade," a recent Merkley ad says, "Problem is -- there's nothing free about it." Mr. Merkley wants legislation that would inject strict workplace safety, labor and environmental standards into future trade agreements, while requiring a review of all existing trade deals. Polls show Mr. Merkley running closely with Sen. Smith.
Actually, the composite of polls at Pollster.com has Merkley currently leading by 5%.
Back to the WSJ:
From Oregon to Georgia to upstate New York, skepticism about the benefits of free trade is rippling through campaigns for several House and Senate seats... .
The overwhelming public distrust of free traders is benefitting Democrats this year, as it did in 2006. But this does not have to be. Republicans can easily choose to change their views. The evidence is overwhelming against current unilateral free trade policies, which provides an easy way to step down from past positions. If the election goes as poorly as expected for the GOP, there will be an ideological upheaval opportunity which could support smart trade.
On the presidential front, Bush has made the FTA's a top priority this year. I think that is odd, and, aside from my personal views on trade, I do not understand why this is a higher priority than other items on his agenda.
President Bush's efforts to win passage of trade deals with South Korea, Panama and Colombia stalled after trade concerns helped to put Democrats in charge of the House and Senate in 2006.
As between the two candidates, Obama talks fair trade, but the campaign staff have both "fair" and "free" traders jousting for prominence. McCain's policies are clear free trade.
Most Democrats don't call for blatant protectionist measures such as steep tariffs, or a return to import quotas such as those that governed automotive trade in the 1980s. Instead, Democrats, starting with Presidential candidate Sen. Barack Obama, talk about the need for trade to be fair, and insist that trading partners be required to meet higher standards for environmental controls and workers' rights to unionize.
Republican candidate Sen. John McCain is a free trader and has surrounded himself with like-minded advisers such as Stanford University economist John Taylor. Mr. Taylor headed international economic policy in President Bush's first-term Treasury Department and is a candidate to be Treasury Secretary should Mr. McCain win the White House.
Other McCain economic advisers, such as former Congressional Budget Office director Douglas Holtz-Eakin, former eBay Chief Executive Meg Whitman and former Hewlett-Packard Chief Executive Carly Fiorina, are longstanding proponents of open markets.
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