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The Truth about Trade

RSS By: Dean Kleckner, AgWeb.com

Dean is Chairman Emeritus of 'Truth About Trade & Technology, a nonprofit advocacy group led by a volunteer board of American farmers.

Pivot Time

Jun 20, 2008
I’m ready for a change I can believe in--specifically, for Barack Obama to back away from the protectionist rhetoric that has marred his presidential campaign.
 
We’re about to enter the phase of our presidential season that might be called The Pivot. With both the Democrats and Republicans having settled on their presumptive nominees, the candidates will start trying to appeal to the independents who don’t participate in the primary process.
 
That’s one reason why John McCain has talked about global warming in recent weeks: Conservatives remain skeptical of it, but other voters may want to hear him address the issue.
 
I’ve looked forward to The Pivot for one simple reason: Democrats now have a chance rethink the harmful things they’ve said about free trade for much of this year.
 
A few months ago, it got so ugly that when Senator Obama was scrambling for votes in Ohio, he talked openly about quitting the North American Free Trade Agreement. “I think we should use the hammer of a potential opt-out,” he threatened. At the very least, he promised to “renegotiate” this pact with our two most important trading partners.
 
This is madness. Every day, the United States, Canada, and Mexico trade more than $2 billion in goods and services. Almost 30 percent of America’s international trade is with these two nations. Since NAFTA was passed, our gross domestic product has grown by 50 percent and we’ve created 26 million new jobs.
 
Obama’s attacks on free trade haven’t earned him much praise from the rest of the world, which is suddenly apprehensive about an economic isolationist taking up residence in the White House. “It is very irresponsible, in my view, to pretend to people that we can disengage from international trade,” warned Peter Mandelson, the European Union’s trade chief.
 
The good news is that Obama is a savvy politician who knows that protectionism won’t play everywhere. Last month, when he was campaigning in Indiana, he acknowledged a simple truth: “We’re going to have to trade.”
 
Indeed, we are--especially when exports are a genuine strength in an economy that’s showing signs of stress.
 
More recently, Obama has indicated that he really doesn’t intend to wage a war on trade. In an interview with Fortune this week, he seemed to suggest that his attacks on NAFTA were too harsh. “Sometimes during campaigns the rhetoric gets overheated and amplified,” he said. “Politicians are always guilty of that, and I don’t exempt myself.”
 
He has made other positive statements as well. “I believe in free trade,” he said on CNBC last week. “As somebody who lived overseas, who has family overseas, I’ve seen what’s happened in terms of rising living standards around the globe. And that’s a good thing for America; it’s good for our national security.”
 
Unfortunately, the senator went on to bash trade that lifts “corporate profits.” You would think that he’d realize that a lot of Americans actually work for corporations and own shares of stock in them. Still, this is progress. A logical next step might involve building upon his support of last year’s free-trade agreement with Peru and embracing a similar pact with Colombia.
 
At the very least, Senator Obama should start listening to what some of his fellow Democrats are saying.
 
Speaker Nancy Pelosi and the House of Representatives, writes former Carter administration official C. Fred Bergsten, have “hamstrung U.S. trade policy and created the gravest threat to the global trading system in decades.” Bergsten’s think tank, the Peterson Institute for International Economics, calculates that trade liberalization since the Second World War has enriched the United States by $1 trillion annually and that gains of another $500 billion per year are within reach.
 
Al From of the Democratic Leadership Council--an organization that helped propel the political success of Bill Clinton--also wants his party to reject protectionism. “Globalization is here to stay. We need to respond with American ingenuity and optimism, rather than fear,” he wrote recently. “For important moral reasons that go to our party’s first principles, Democrats should support efforts to expand trade. No American who works full time should be poor. Growing the economy and creating jobs remain the best ways to fight poverty, and neither is possible with a cocoon around our economy.”
 
That’s sound advice--words that Barack Obama should come to believe in, before he tries to sell Americans a change that he hopes they can believe in.
 
Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology. www.truthabouttrade.org
 
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