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Most of my postings on presidential candidate commentary on trade
have focused on the Democrats, because the Republican candidates just
don't say much. The ratio of quotes on this site parallels the
ratio of quotes out in the wild. You can do a search on this site
with candidate
names and come up with much of what they've said.
Today's Wall Street
Journal article records more commentary by the candidates, their
spokespersons, and their allies. The whole article is reproduced
below the fold (read more).
The top-tier Republican candidates have been unabashed pro-free
traders. With the possible exception of "fair trade" Mike
Huckabee. But they are having to modify their rhetoric. Duncan
Hunter and Ron Paul are not free traders.
The
upshot is that the rhetoric is moving away from unabashed "free trade"
support. The trade-without-rules as a philosophy is losing. But
actions have not followed. That will be the challenge. Talk
is cheap. Actions matter.
Romney:
On
the other end is former Massachusetts Gov. Mitt Romney, who last month
traveled to South Carolina -- a state hard-hit by trade-related layoffs
-- to argue for an aggressive expansion of free-trade deals. Mr. Romney
calls for better enforcement of existing trade agreements and improved
worker-retraining programs. ... He also excoriates the Democrats
for their approach. During a speech at the Greenwood Chamber of
Commerce, Mr. Romney presented a slide presentation where photos of his
Democratic rivals were topped with the headline "Democrats' Strategy of
Defeat and Retreat: Stop the World We Want to Get Off."
Giuliani's adviser:
"Trade
is a valid issue to discuss," says David Malpass, an economic adviser
to former New York Mayor Rudy Giuliani, another Republican candidate.
"The mayor wants to discuss it in optimistic, growth-oriented terms,
rather than taking the attitude that Americans can't compete with the
Chinese, which is at the core of the Democrats' position."
McCain, who claims the mantle of the strongest free trader in the Senate after Phil Gramm retired:
Sen.
John McCain, the Arizona Republican, has talked openly of the downsides
of trade, throwing his support behind expanding a government program to
help displaced workers make up lost wages.
Huckabee:
Mike
Huckabee, whose popularity in Iowa is rising, speaks openly of worker
concerns and embraces language used by critics of globalization.
"There's no free trade without fair trade," he says.
Robert Rubin Democrats:
"It's
unfortunate that the Democrats are willing to describe trade as part of
the problem," says Robert Reich, President Clinton's labor secretary.
He worries the current crop of Democratic contenders will undo Mr.
Clinton's progress and potentially enact policies that hurt economic
growth. "It's pandering to a misconception in the public. The truth is
that trade is good for the U.S. but that some people are burdened by it
far more than others. We've got to make them all winners, but you don't
make them winners by attacking trade," he says.
The Wall Street Journal
A Globalization Winner
Joins in Trade Backlash
Exports Boost Iowa,
But Workers Still Fret;
Campaigns Take Note
By DEBORAH SOLOMON and GREG HITT
November 21, 2007; Page A1
WATERLOO, Iowa -- At a John Deere plant here, bright green
tractors bound for Brazil, Russia and China roll off assembly lines.
Global demand for tractors is good, and that's been good for Waterloo.
Yet over the last couple of years, workers and voters in this
blue-collar manufacturing outpost -- and throughout Iowa -- have grown
decidedly downbeat about globalization. Trade has become such a hot
subject that Democratic presidential candidates seeking support in
Iowa's influential Jan. 3 caucuses are turning into trade skeptics, and
the issue is splitting traditionally free-trade Republicans.
Iowa's ambivalence is all the more remarkable because the state is on
the whole a big winner from global trade. "Iowa, as much as any other
state, is on the plus side of the ledger," says James Leach, a 30-year
Republican congressman from Iowa who now runs Harvard University's
Institute of Politics. "It would be highly ironic if pro-protectionist
candidates prevailed in the Iowa caucuses." Trade wasn't always such a
high priority: In the 2004 Iowa caucus, Richard Gephardt, the most
outspoken Democrat on the issue, attracted so few votes he subsequently
pulled out of the race.
As the 2008 presidential election approaches, anti-trade sentiment is
percolating across America. It is particularly strong in places like
Ohio, where foreign competition has decimated jobs. The latest Wall
Street Journal/NBC News poll1 conducted earlier this month found that
60% of voters nationwide agreed with the statement that "foreign trade
has been bad for the U.S. economy."
Iowa's anxiety stems from a mix of factors, many of which are also at
play in other Midwestern swing states. By many measures, the global
economy has been good for the state. Boosted by the ethanol and
biofuels craze and surging demand for crops and farm equipment
world-wide, Iowa's exports are up 77% over the past four years versus
50% nationally. The state's unemployment rate hovers around 3.7%, below
the national 4.6% average.
But the past couple of decades have seen a steady decline in
once-prized factory jobs, from a high of 252,700 in 1999 to 231,000
today. Just this year, Iowa lost about 1,800 jobs when appliance-maker
Maytag, now owned by Whirlpool Corp., shuttered its plant in its home
town of Newton. (The jobs moved to Ohio, but foreign competition was a
key reason Maytag was acquired by Whirlpool.) Wages haven't kept pace
with inflation, and employers here, as elsewhere, have been paring
health and retirement benefits.
Many Iowans blame their difficulties on global trade. A Los Angeles
Times/Bloomberg poll of Iowa Democrats conducted in September found
that by 42% to 33% they favored a candidate who believes trade pacts
hurt the U.S. economy over one who believes they benefit the economy;
Republicans were evenly split at 39%. (The balance said they didn't
know or hadn't a preference.)
The moods of even the most fortunate workers are clouded by unease. At
Morg's Diner in downtown Waterloo (pop. 68,747), Deere & Co. worker
Tim McBride, 51 years old, knows he is one of trade's winners. Thanks
to record commodity prices and large overseas demand for crops, Deere
has been adding 25 workers a week. Mr. McBride expects to earn about
$85,000 this year as a member of a team that improves productivity and
quality at the company's drive-train plant.
But a year-long layoff in 1984, when a strong dollar was crimping U.S.
exports, seared him. More than two decades later, Mr. McBride worries
that foreign competition could again put him out of a job. Tucking into
a butter-drenched pancake, he laments the ease with which a global
economy enables companies to shift jobs to lower-cost countries. "If
the people in the United States worked for a dollar an hour, we still
couldn't compete," says Mr. McBride.
Most economists argue that changing technology is more to blame for the
divergence of economic fortunes. Nonetheless, worker concerns are
roiling the political landscape. "Everywhere you go you've got this
widespread feeling, especially in the labor community, that all of the
wage problems of the middle class are due to trade," says Austan
Goolsbee, a University of Chicago economist advising Democratic
candidate Sen. Barack Obama.
Adds Gene Sperling, an aide to former President Bill Clinton now
advising Democratic candidate Sen. Hillary Clinton: "Even those of us
who are supportive of the open-market policies of the '90s have to take
seriously that the large inflow of workers from China and India
digesting American jobs is placing downward pressure on wages. That
doesn't mean the answer is closing up shop in globalization, but it
can't just mean business as usual either."
As a result, Democratic candidates here are responding by making
promises that could influence the policies of the next president. On a
recent Tuesday, the crowd at Des Moines Area Community College bursts
into loud and sustained applause when Mr. Obama vows to make sure "that
globalization is not just working for multinational companies."
In Cedar Rapids, workers nod as former Sen. John Edwards tells them
that "the negative effects from globalization are rippling through the
economy." In perhaps the most telling development, Democratic
front-runner Mrs. Clinton says the North American Free Trade Agreement
-- which her husband pushed through Congress -- has "serious
shortcomings."
Waterloo sits on the Cedar River in central Iowa, a blue-collar
manufacturing outpost set amid the state's great sea of farmland. Train
tracks cut across downtown and outlying neighborhoods with small homes
and neatly trimmed yards. Local radio broadcasts high-school volleyball.
The town is synonymous with Deere, the city's largest employer, which
has been making tractors in Waterloo since 1918. Here, the sweet taste
of today's prosperity is mixed with sour memories and realities.
For generations, Deere was the place everyone wanted to work. "You got
out of high school and you went to work at Deere," says Waterloo Mayor
Timothy Hurley, himself a 37-year Deere veteran. "Grandpa was a Deere
worker and your father was a Deere worker and so that's what you wanted
to be."
That sense of security began to fray in the 1980s, when a general
economic downturn combined with a crop-price slump hurt Deere's bottom
line. The company began slashing its Waterloo work force, which once
employed more than 12,000 workers and is now down to 4,800. One day in
1986, the company posted layoff notices for "hundreds of people," a
union official recalls. Sheets with the names were tacked onto bulletin
boards near the factory gates.
While the farm economy eventually improved, Deere's employment never
rebounded to its previous levels and workers began to see threats from
overseas. Tractors made in Waterloo are no longer fully American-made
and are instead outfitted with parts from Mexico and Italy. Deere
recently completed the acquisition of China's Ningbo Benye Tractor
& Automobile Manufacture Co., which makes low-horsepower tractors.
And Deere has pressured the United Auto Workers, which represents
Deere's hourly workers, to cut wage and benefit costs. In 1997, the UAW
agreed to a two-tiered compensation structure under which new hires
would be paid at a lower rate and get less-generous benefits. Today
workers start at $12.01 an hour, about $4 an hour less than the
previous entry-level wage.
Shawn Luck, 32, was hired by Deere under that contract in 2002 and
expects to make $40,000 to $50,000 this year, far less than Mr. McBride
earns. Both are active in the union, and Mr. Luck has come to terms
with the differing pay scales. But he says others chafe. "There are
some tensions here and there," he says. "I'm not going to lie."
While he acknowledges that "things are going good" for Deere, Mr. Luck
is upset about the impact that the global economy is having on wages.
"It's a growing issue," says Mr. Luck, who has two young children and
worries he's not getting ahead fast enough. His response: going to
night school for a college degree. "I'd have some value to somebody,"
he reasons.
Democratic presidential candidates figure it'll take more than
preaching the virtues of higher education to placate trade-wary voters.
On the stump, the top contenders say they support globalization but are
pledging to oppose trade deals that don't benefit American workers.
They are promising to lift wages through tax policies that let
middle-class workers keep more of what they earn and by negotiating
free-trade agreements with labor and environmental standards.
Such deals would -- in theory -- boost wages here by increasing wages
overseas and removing some of the competitive advantages of doing
business in other countries, where environmental standards are less
stringent.
"My sense is that the families of Iowa have now concluded that the
modest benefit to them from cheaper goods that flow through Wal-Mart
have been overwhelmed by stagnating wages," says Leo Hindery, the
former cable-TV chief who is now the top economic policy adviser to Mr.
Edwards. "Iowa, like a lot of states, looks back at Nafta and says,
'Nafta did not work as promised.' " Mr. Edwards criticizes Nafta, which
eliminated tariffs and other trade barriers between the U.S., Canada
and Mexico, as bad for workers, saying it needs to be "revised" to
include labor and environmental standards.
That's spurred other candidates to follow suit, most notably Mrs.
Clinton. Mr. Obama, meanwhile, has said he would seek to make Nafta
more favorable to the U.S. Mrs. Clinton and Mr. Obama have also backed
legislation to punish China for manipulating its currency, which
critics say is kept artificially low to give the country a leg up in
global trade.
Tough talk on trade may play well in Iowa, but it's upsetting some
members of the Democratic establishment, who say the candidates are
threatening to unravel one of former President Clinton's enduring
legacies -- shifting the Democratic party away from protectionist
proclivities.
"It's unfortunate that the Democrats are willing to describe trade as
part of the problem," says Robert Reich, President Clinton's labor
secretary. He worries the current crop of Democratic contenders will
undo Mr. Clinton's progress and potentially enact policies that hurt
economic growth. "It's pandering to a misconception in the public. The
truth is that trade is good for the U.S. but that some people are
burdened by it far more than others. We've got to make them all
winners, but you don't make them winners by attacking trade," he says.
Republicans, meanwhile, have made the political calculation that most
Americans want to see a continuation of open borders because it means
cheaper goods and a stronger U.S. economy. Most are addressing the
angst by nibbling around the edges -- promising stronger job protection
and wages but steering clear of bashing China or promoting expanded
government programs to help the middle class.
But the issue is creating rifts among Republicans. Sen. John McCain,
the Arizona Republican, has talked openly of the downsides of trade,
throwing his support behind expanding a government program to help
displaced workers make up lost wages. Former Arkansas Gov. Mike
Huckabee, whose popularity in Iowa is rising, speaks openly of worker
concerns and embraces language used by critics of globalization.
"There's no free trade without fair trade," he says.
On the other end is former Massachusetts Gov. Mitt Romney, who last
month traveled to South Carolina -- a state hard-hit by trade-related
layoffs -- to argue for an aggressive expansion of free-trade deals.
Mr. Romney calls for better enforcement of existing trade agreements
and improved worker-retraining programs.
He also excoriates the Democrats for their approach. During a speech at
the Greenwood Chamber of Commerce, Mr. Romney presented a slide
presentation where photos of his Democratic rivals were topped with the
headline "Democrats' Strategy of Defeat and Retreat: Stop the World We
Want to Get Off." Mr. Romney is currently leading polls of Republican
voters in Iowa.
"Trade is a valid issue to discuss," says David Malpass, an economic
adviser to former New York Mayor Rudy Giuliani, another Republican
candidate. "The mayor wants to discuss it in optimistic,
growth-oriented terms, rather than taking the attitude that Americans
can't compete with the Chinese, which is at the core of the Democrats'
position."
Whether that's a winning strategy remains to be seen. Says Republican
pollster Tony Fabrizio: "Not every Republican belongs to a country
club. Most of them are average middle-class working families and so the
economic pressure of job loss, of outsourcing, those are all things
they're sensitive to."
For at least two Deere workers in Iowa, Democrats are winning the
argument. Mr. McBride likes what he hears from Mr. Edwards. "When you
get in a room and talk with him, you get the feeling he really cares
about what happens to the middle class of America," he says. Mr. Luck
leans toward Mrs. Clinton, saying her health-care plan would allow
unions and management to negotiate more worker-friendly contracts. Both
plan to put out yard signs and knock on doors for the 2008 Democratic
nominee.
Write to Deborah Solomon at
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and Greg Hitt at
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