Commentary

Expanding Trade Is a Key to Winning Presidency

By Daniel Griswold
This article appeared in the Detroit News on July 30, 2008.

Republican John McCain’s recent free-trade tour to Mexico and Colombia highlights the stark differences on international trade between the two major-party presidential candidates. While expanding trade would be best for America, there is resistance in states like Michigan and from Democratic hopeful Barack Obama.

McCain describes himself as an unabashed free trader, and his record in Congress proves it. McCain has voted the free-trade position on almost 90 percent of the major trade bills that have come before the Senate in the past 15 years.

McCain supports the North American Free Trade Agreement with Canada and Mexico. He voted for a 2005 free trade agreement with five Central American countries and the Dominican Republic. He voted for permanent normal trade relations with China while opposing punitive tariffs against China over its currency. He opposed the protectionist and subsidy-laden farm bills of 2002 and 2008. He supports the proposed free trade agreement with our South American ally Colombia.

The bipartisan policy of trade expansion has served America’s broader interests for the past half century.”

While acknowledging that trade dislocates some U.S. workers, McCain argues that free trade fuels growth and innovation to the benefit of most Americans. Since the passage of NAFTA in 1993, the U.S. economy has added 26 million net new jobs, real wages and benefits for the average worker have climbed 23 percent, and manufacturing output is up more than 50 percent. Appealing to history, McCain points to the Great Depression that followed passage of the Smoot-Hawley tariff of 1930 and the deeper ties that free trade forged with our allies during the Cold War.

In contrast, Obama has embraced a far more skeptical view of trade. Since joining the Senate in 2005, he has supported free trade on four of 11 major votes. He voted against the Central American Free Trade Agreement and in support of the China currency tariffs. He supported the 2008 farm bill and opposes the Colombia Free Trade Agreement. In a debate with Hillary Clinton before the March Ohio primary, Obama said he would “use the hammer of a potential opt-out” to force our two NAFTA neighbors, Canada and Mexico, to reopen the agreement to insert labor and environmental provisions.

Obama’s record and rhetoric are not uniformly opposed to trade liberalization. Along with McCain, he supported the Oman and Peru pacts. And in contrast to McCain, Obama actually wants to loosen the failed, 48-year-old trade and travel embargo against Cuba. In his best-selling book, “The Audacity of Hope,” Obama acknowledges that trade expansion can benefit the nation while rationalizing his opposition to major trade agreements such as CAFTA.

At first glance, the politics of trade would seem to favor Obama. Most Americans tell pollsters they are wary of the impact of trade on jobs and manufacturing. But reservations about trade, though widely held, have not been decisive in presidential elections.

John Kerry, Ross Perot, Michael Dukakis and Walter Mondale all tried to play the protectionist card, but none made it to the White House.

Obama’s skeptical line on trade contrasts not only with McCain but with the most recent Democratic president. Bill Clinton championed trade expansion as an important plank in his centrist economic program — successfully championing NAFTA, the Uruguay Round agreements on world trade, the World Trade Organization and permanent normal trade relations with China.

Obama and fellow Democrats like to point to the economic boom of the 1990s while rejecting the Clinton trade agenda that helped to fuel that growth.

The bipartisan policy of trade expansion has served America’s broader interests for the past half century. If Barack Obama wants to polish his presidential credentials, he should do the same.

Daniel Griswold is director of the Cato Institute’s Center for Trade Policy Studies.