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Of the presidential candidates, John McCain’s policies on free trade would be most beneficial to the U.S. economy, finds “Race to the Bottom? The Presidential Candidates’ Position on Trade,” a trade briefing paper released by the Cato Institute today.
Based on campaign rhetoric and trade voting records, “voters could expect a President McCain who promotes freer trade and cuts in market‐distorting subsides, and a president Clinton or a President Obama who views free trade between voluntary actors as something to be restrained,” writes author Sallie James, policy analyst at the Cato Institute’s Center for Trade Policy Studies.
A faltering economy has made trade policy a salient topic during the 2008 presidential elections. Clinton and Obama have especially exploited the Federal Reserve Bank’s news that the economy is slowing, linking it to what they see as faulty policies of the Bush administration, and implying that more government management of trade flows will reverse this trend.
The Democratic candidate’s positions are alarming because “so long as presidential aspirants claim to be able to ‘fix’ the economy, potential exists for misguided policy to follow populist rhetoric.” Further, free trade is a vital component for maximizing economic growth. “America’s ongoing commitment to expanding trade—a commitment shared by previous Republican and Democratic administrations—has resulted in lower prices and greater product variety for consumers, job growth for exporters, and higher levels of productivity and innovation that increase prosperity in America and abroad,” writes James.
“Far from just a rhetorical device, proposals to increase restrictions on trade—or even to suspend further liberalization—are economically worrying. After all, tariffs do not create wealth; they are merely a device for protecting special interests by restricting consumers’ choices,” James concludes.
This report can be found at: http://www.freetrade.org/pubs/briefs/tbp-027es.html