In the Senate, John Kerry understood the importance of trade. He bucked the prevailing trends in his party to approve the North American Free Trade Agreement (NAFTA), to give China normal trade-relations status, and to support presidential trade-promotion authority. Yet during the primaries, Kerry abandoned the pro-trade New Democrat center in favor of the isolationist fringe. He disavowed his vote for NAFTA and promised to revisit all current U.S. free-trade agreements. He proudly declared that there was no difference between himself and the protectionist Senator Edwards on trade.
Kerry’s advisers might be forgiven for thinking that an anti-trade message would be a winner in November. A recent University of Maryland poll, for example, purported to show that support for free trade has fallen sharply among Americans making over $100,000 per year. And the spectacle of Bush administration officials squirming over economic adviser Greg Mankiw’s reference to the benefits of off-shoring jobs certainly didn’t inspire confidence in the popularity of open markets.
Yet as Richard Gephardt’s failed presidential campaign showed, protectionism doesn’t necessarily resonate with most voters. This is not the 1980s, when Americans irrationally feared that trade was leading to economic domination by a Japanese juggernaut. Today, international trade is part of the fabric of the U.S. economy. Instead of smashing Hondas in protest, 17,000 Americans are now building them in Ohio, Alabama, and in other states.
While recent media attention has focused on the “crisis” of outsourcing white-collar jobs to lower-wage countries like India, more Americans than ever understand the positive link between open markets and their livelihoods. The Bush administration’s ill-fated decision to levy tariffs on imported steel, for example, prompted protests from U.S. businesses that rely on foreign steel to stay competitive. (Notably, workers in those steel-using industries outnumber steel workers by about 60 to 1.) The steel tariffs are now history.
Americans are also taking greater advantage of the benefits of free trade as consumers. Repealing NAFTA, while a fine applause line at union rallies, would significantly increase the cost of living for all Americans. That’s hardly a progressive agenda. As the New Democrat think tank the Progressive Policy Institute has pointed out, the top beneficiaries of tariff elimination are the low-income, single-parent families who pay a higher percentage of their incomes on import taxes than all other families.
Perhaps most important, free trade is a critical weapon in the war against terrorism. The World Bank estimates that removing all barriers to trade in goods alone would increase global incomes by $830 billion per year by 2015. That’s more than the current GDPs of India, Indonesia, Malaysia, and the Philippines combined. By promoting development in all nations, free trade helps drain the swamps of poverty where extremists hide and recruit.
By embracing a free-trade platform, Kerry would be upholding one of the finest traditions of his party and following in the footsteps of men like Franklin Roosevelt, John F. Kennedy, and Bill Clinton. These popular Democratic presidents all recognized that openness was critical for America’s long-term economic health and to its global leadership. They knew that tariffs are taxes, and when taxes are cut, the American economy grows.
While reversing himself again on free trade may be awkward now, it will pay political dividends for Kerry down the road. It will be difficult to attack the Bush administration for “unilateralism,” for example, while touting a program of U.S. economic disengagement from the world. And claims of a commitment to end the terrible cycle of poverty and instability in Africa, Latin America, and the Middle East will ring hollow if they are not backed by a willingness to trade with developing nations.
Protectionism is simply not a responsible position for a major-party nominee for president of the United States. In the primaries, John Kerry understandably sought to energize his left-wing base. Now that he’s won, however, it’s time to get serious about the nation’s best interests.