My colleague Dan Griswold has a post below about some of the good things President Bush said in his State of the Union address last night (transcript here). While the President deserves praise for the remarks he made about the importance of trade to the American economy, he made much of the importance of exports and of opening markets overseas, with only a cursory glance at the benefits of imports.
That mercantilist rhetoric, in my opinion and in the opinion of my colleague Brink Lindsey, has boxed the administration and other lawmakers into a corner: people now erroneously assume that if the exports fail to materialize, or if the trade deficit worsens, then the trade policies have been a failure. The present skepticism about trade deals (even allowing for the fact we are in fully‐fledged campaign mode) is a direct consequence of that flawed thinking.
Putting aside my ranting about the general state of public discourse about trade, though, there was one part of the SOTU address that particularly struck me as misguided. In making the case for trade deals, President Bush talked about the negative effects of trade liberalization on some workers and made a pitch for renewing trade adjustment assistance:
for some Americans, trade can mean losing a job, and the federal government has a responsibility to help.