Commentary

A Presidential Scorecard on Trade

What does the future hold for U.S. trade policy? That’s no easy question. While the major presidential candidates have been gleefully bashing each other over Medicare, Internet taxes, and what to do with the budget surplus, they have been relatively quiet about important trade issues.

That silence contrasts sharply with the popular media buzz. Last December’s Seattle mayhem spawned countless U.S. editorials and commentary columns debating the merits of free trade, globalization, and the World Trade Organization. Pundits continue to fill the airwaves with dire warnings of a “backlash against trade.”

The next American president will hold enormous sway over the direction of U.S. trade policy, so it’s critical to know where he stands. But there has been nary a peep over trade matters during the recent presidential debates. Should we conclude that all of the candidates agree?

Not necessarily. True, there is a general consensus among presidential aspirants that “trade is good.” In fact, no candidate with an anti-globalization message is doing well in the polls. But beyond their apparent consensus on trade, the leading candidates differ on specifics; most notably on the need to link trade to labor and environmental standards.

First, the good news: it’s exceedingly unlikely that an administration headed by one of the four major candidates — George W. Bush Jr., John McCain, Al Gore, or Bill Bradley — would lead to a major reorientation of U.S. trade policy. Only Reform Party candidate Pat Buchanan has promised to put an anti-trade agenda at the top of his list of priorities. Buchanan’s chances of success, however, are slim to none.

But even seemingly small changes to U.S. trade policy could lead to difficulties down the road. The most troubling rhetoric in this regard has come from Democratic front-runner Al Gore, who is desperately seeking a way to avoid antagonizing organized labor before the November elections. The AFL-CIO, America’s largest labor union, has made fighting new trade initiatives its top priority. Indeed, AFL-CIO president John Sweeney recently threatened “to do whatever it takes” to block permanent normal trade relations (NTR) for China.

Gore needn’t worry; anti-trade Democrats really don’t have anyplace to go. Gore’s only challenger for the Democratic nomination, Bill Bradley, is a self-styled free trader. Green candidates will never be taken seriously. And to back Pat Buchanan would be to back a relatively high-profile loser, effectively handing the presidency to a pro-trade Republican such as Bush or McCain. Since Gore is the only candidate likely to support at least marginally protectionist union-backed legislation, he can pretty much count on labor’s support at the end of the day.

Moreover, many union members work in export sectors and generally support open trade. And nearly half of America’s 17 million union members are employed in the public sector and thus largely immune from import pressures. The numbers speak for themselves: organized labor is giving far more to Gore than any other candidate.

Bill Bradley has also been sounding a bit more protectionist these days, but like Gore, his “get tough” stance would likely morph into Clinton-style internationalism if he were elected. Bradley was a key advocate of both the WTO and the North American Free Trade Agreement. And he continues to praise globalization, which he credits with “expanding the economy” through trade. Realistically, however, a Bradley win looks improbable at this point.

Bush is still the favorite for the Republican nomination, and he has been a highly vocal supporter of free trade. In fact, he has regularly chastised Gore, his likely Democratic opponent, for not taking a stronger public stand against the radical anti-WTO protests in Seattle. “He’s worried about the political implications,” said Bush of Gore’s reluctance to speak out. Bush has been a particularly strong supporter of granting permanent NTR to China — an important step in that nation’s quest to join the WTO.

McCain is also a vocal proponent of trade liberalization and boasts a strong pro-trade voting record in the Senate. In fact, a 1999 Cato Institute study of the 105th Congress ranked McCain as one of only 12 consistently free-trade senators. McCain supports China’s entry into the WTO and has repeatedly argued that trade ties between the United States and China exert a positive influence on China’s Communist leaders.

Of course, not all Republicans agree on trade. China in particular seems to separate the conservative front-runners from the long shots. Millionaire publisher Steve Forbes, former Reagan adviser Gary Bauer, and Republican party defector Pat Buchanan have all said that China shouldn’t be allowed in the WTO. Some go even further: Bauer calls China an “international human rights pariah, disqualified for trade privileges with the U.S.”

The Democratic candidates appear to be less divided over China. When asked recently by the Associated Press about China, both candidates declared their support for permanent NTR. The tone of their answers, however, was telling. Bradley rightly stressed the benefits of trade to American companies and its potential to encourage democratic reform in China. Gore, on the other hand, spoke mostly of the “safeguards” that would that would protect American businesses from Chinese imports — hardly a ringing endorsement of free trade.

A Bush or McCain presidency would be good news for free traders, but what of the most likely alternative: a Gore administration? Gore increasingly stresses the need to balance trade growth with stronger labor and environmental protections on an uncomfortably regular basis. Pursued properly, he says, trade policy will “pay more attention to labor rights and environmental protection” than it has in the past.

He seems to believe what he’s saying, which could lead to a retreat from U.S. support for liberalized trade. It already looks as if President Clinton deliberately allowed the WTO’s Seattle meeting to collapse to avoid alienating Gore supporters. If true, Gore almost certainly had a hand in the decision.

It’s not clear whether Gore truly understands the implications of pursuing a “fairer” trade strategy. Without doubt, developing countries will rightly rebel against any move to undercut their number-one competitive advantage: low wages. President Clinton merely hinted that the United States might favor imposing sanctions on countries that fail to live up to labor standards, and that was enough to topple the WTO’s Seattle ministerial. If a Gore administration were foolish enough to forcefully pursue such a policy, any future trade agreements would inevitably be stillborn. Labor standards tied to trade sanctions might make some American unions happy but would be a terrible blow to the world’s poorest workers.

One hopes, of course, that Gore would put the welfare of those impoverished masses ahead of his own political ambitions. For countries at the bottom of the economic ladder, export-oriented trade offers the only realistic path to development. Sadly, Gore is making unwise promises he may eventually be forced to keep. As AFL-CIO economist Thea Lee admonishes, “We’ll certainly be expecting a lot from him in the future.”

Aaron Lukas is an analyst at the Cato Institute’s Center for Trade Policy Studies in Washington, D.C.