Speeches

Bush and Kerry: Comparing Their Economic Platforms

Remarks by Daniel Griswold at the Policy Forum, “Bush and Kerry: Comparing Their Economic Platforms,” May 25, 2004.

I’m going to talk about the record and the rhetoric of the two major party candidates, and do some comparing with each other and to the ideal of freer trade and trade expansion.

We’ll start with the biggest target: the incumbent’s actual record on trade. Now the specific actions that President Bush has taken on expanding trade are quite impressive. He signed trade promotion authority into law after an eight-year lapse. He’s negotiated and signed trade agreements with Chile and Singapore and they have been passed into law, with Australia awaiting congressional action. In just a few days his administration will be signing agreements with five Central American countries and later with the Dominican Republic. We’re currently negotiating with Morocco, Bahrain, the Southern African Customs Union and Andean countries.

This administration, through U.S. Trade Representative Bob Zoellick, helped to launch the Doha Round in the World Trade Organization. After the spectacular failure of Seattle in 1999, another round did get underway. This administration has put forward serious proposals to liberalize trade in services, industrial products and, yes, even agriculture. They’ve even agreed to put antidumping rules on the table for negotiations. These are not trivial achievements. President Bush appointed a U.S. Trade Representative who does care passionately about trade liberalization and is working aggressively to reduce trade barriers through negotiated agreements.

This administration in word and deed has supported normal trade relations with China and continuing those relations with a country that is now our fourth largest trading partner. It has rejected Section 301 petitions to raise barriers to trade with China based on complaints about exchange rate policies and labor policies. It has turned down the special Section 421 petitions to raise barriers with trade with China. It is a record that needs to be taken seriously.

Enactment of Promotional Trade Authority came with a high price, however. This pro-trade president also imposed 8 to 30 percent tariffs on foreign steel as part of a Section 201 safeguard provision in 2002. That was a lapse from free trade principles that his predecessor Bill Clinton had successfully resisted for 8 years. The president did lift the tariffs after 20 months, but the economic and political damage had already been done. President Bush also signed the awful, trade-distorting Farm Bill of 2002 that locked in subsidies at a level that was 80 percent higher than what had existed under the previous farm bill that had been signed by President Clinton. Besides being costly to taxpayers and consumers alike, the farm bill undercuts the U.S. government’s position in global trade talks. We are urging other countries to lower their trade barriers, to make the tough choices, when we are unable to make those same tough choices here. Those two deviations from free trade probably helped to corral the last few votes necessary to get Trade Promotion Authority passed, but only by digging a very deep hole that this administration has yet to climb out of.

The Bush administration has also acquiesced in imposing steep tariffs on Canadian softwood lumber and on various consumer products from China through our flawed and unfair administrative trade laws. President Bush has resisted any efforts to loosen our failed, four-decade old travel and trade embargo against Cuba. When it comes to Cuba, the president seems to forget all those sound arguments he has made about trading with China. But they don’t seem to apply to Cuba when it comes to promoting human rights and democracy through trade expansion. The president’s record on trade can at best be described as one of halting progress; good intensions compromised by tactical retreats in the face of political pressure.

John Kerry’s record on trade is surprisingly similar to that of President Bush. Sen. Kerry’s voting record in the Senate has been one of supporting trade liberalization most of the time, on just about all the major trade liberalization bills that have come before the Senate. Sen. Kerry didn’t mention this in his recent speech before the Teamsters in Las Vegas, but he voted for the North American Free Trade Agreement in 1993 and for the Uruguay Round Agreements Act in 1994. He voted for a relatively clean version of what we called “fast track” back in 1997, when it came before the Senate. He did vote for the new if not improved version of Trade Promotion Authority that came before the Senate in 2002. He’s consistently voted for normal trade relations with China and then for permanent NTR in 2000, which ushered China into the WTO. He voted for lower trade barriers against imports from Africa and the Caribbean in 2000. In contrast to president Bush, he voted for allowing Americans to trade and travel more freely to and with Cuba. In the past he has voted against sugar quotas and sugar subsidies. And—it might have been one of his finest moments—he voted against steel protection in June of 1999, when he was one of a minority of Democratic Senators to oppose a steel quota bill—again in contrast to our president.

Like that of President Bush, Sen. Kerry’s trade record has its own wrinkles and inconsistencies. After opposing sugar subsidies as recently as 2000 he turned around and voted against cutting them in 2001. Perhaps by this time he realized it could be him and not Al Gore trying to win in Florida in the 2004 election. He voted for the same farm bill the president signed in 2002. He voted for inserting more restrictive language on labor, environmental and human rights standards into trade agreements, even though that language would jeopardize most future trade agreements, especially with developing countries. He voted for the Dayton-Craig amendment, which would have required separate congressional votes on any negotiated agreement having to do with our antidumping laws. But as a whole and over time, I calculate that about two-thirds of the time, Sen. Kerry’s votes in Congress have been in the direction of trade liberalization.

If I were grading the actual records of President Bush and Sen. Kerry by a free trade standard, I would give them both a B, I think, maybe a B minus—right on most of the big issues, with farm subsidies chief among the most glaring exceptions.

It is on their rhetoric that the two major party candidates have sharply diverged in recent months. President Bush seems to have rediscovered his free trade principles. He speaks openly of the blessing of free trade and the dangers of protectionism and isolationism. This is music to my ears. He has been eager to sharpen the difference between the two parties on trade rather than to blur them. Even when he’s speaking in the Midwest, in some of these industrial areas that have been hard hit by the manufacturing recession, he’s reaffirmed his commitment to pursuing more trade-expanding agreements.

The president’s rhetoric on trade does remain thoroughly conventional. In his state of the Union Address, he devoted exactly one sentence to trade policy. He said this: “My Administration is promoting free trade, free and fair trade, to open up new markets for America’s entrepreneurs, and manufacturers, and farmers, and to create jobs for America ‘s workers.” Not a word about opening up our own market for the benefit of tens of millions of working families who are paying more than they should for shoes, clothing, food, and other consumer items because of our remaining trade barriers and abused antidumping laws.

Sen. Kerry, on the other hand, just to make things more interesting, has employed rhetoric on the campaign trail that has been significantly less friendly toward trade than his actual record. While paying lip service to the need to trade, he has ratcheted up his call for “enforceable labor and environmental standards at the core of every trade agreement.” Never mind that he supported agreements in the past that did not have that kind of restrictive language in them, both Trade Promotion Authority and actual agreements going back to NAFTA. And most developing countries in the WTO would not sign agreements today that contain such language. They would be a poison pill for future negotiations.

He has proposed re-opening established agreements and aggressive use of Section 301 trade law, moves that could easily be characterized as a kind of high-handed U.S. unilateralism in another context. He wants to impose new regulations on U.S. companies to keep track of how many jobs they allegedly send overseas, to require 3-month notices before shifting work abroad, to restrict bidding for federal contracts to companies that promise to do all the work here in the United States, and to apply “Made in the USA” labeling to service trade. All those proposals would add to the cost of doing business in the United States, driving up costs for consumers and for taxpayers while inviting retaliation from our export markets abroad.

Equally if not more disturbing has been Sen. Kerry’s attacks on the patriotism of his fellow Americans. He’s referred to executives who have tried to control costs by moving some operations overseas as “Benedict Arnold CEOs,” as if trying to better serve your customers and shareholders—and by doing so your employees—is somehow un-American. He’s promised to “appoint a U.S. Trade Representative who is an American patriot and who will put American jobs first”—as if past and present USTRs have not been good, decent Americans committed to the same bi-partisan, post-war trade expansion policies that have brought so much peace and prosperity to the United States and our allies.

So on campaign rhetoric, I would give President Bush perhaps the same B or B minus, but Sen. Kerry a D plus.

The real question is whether trade will be an issue in the fall campaign, and to what extent their rhetorical positions in the campaign will influence the trade policies of the next president, who will be sworn in office in January.

In conclusion, my hope is that Sen. Kerry will tack back toward his more trade friendly record and will run on his record. That would be good policy and good politics. The road to the White House is littered with the wreckage of campaigns based on a protectionist message. The anxiety over jobs seems to be a lagging indicator of our business cycle, doesn’t it? If the job reports continue of 200,000 or 300,000 net new jobs produced each month, it’ll take a lot of steam out of trade as an issue on the campaign trail. But to the extent that Americans care about trade as a presidential issue, they seem to want their presidents to rise above the parochial day-to-day fray of congressional politics and guard the nation’s broader interests in overall prosperity and encourage better relations with countries of the world. They want a president who sees the big picture on trade and who can counter-balance the competing interests of members of Congress. Not since Herbert Hoover have Americans elected a president who ran on an explicitly anti-trade platform. Walter Mondale and Michael Dukakis, Pat Buchanan and Ross Perot, all tried to ride anxieties about trade into the White House, but last time I checked none of them had a presidential library.

Daniel Griswold directs the Center for Trade Policy Studies at the Cato Institute in Washington, D.C. This column is excerpted from his new book, Mad about Trade: Why Main Street America Should Embrace Globalization (Cato Institute, 2009).