The gath­er­ing trade storm

The Washington Times Weekly - - Commentary - MICHAEL BARONE

One is­sue that’s go­ing to come up this fall that you haven’t heard much about is trade. Or at least I hope it’s go­ing to come up. The Bush ad­min­is­tra­tion has sub­mit­ted four free-trade agree­ments (FTAs) for ap­proval by Congress — with Peru, Colom­bia, Panama and South Korea. At the mo­ment, their chances don’t look very good. Democrats have taken to op­pos­ing FTAs al­most unan­i­mously. In July 2006, the House voted by only a 217-215 mar­gin for the CAFTA, the FTA with four Cen­tral Amer­i­can coun­tries and the Do­mini­can Repub­lic. House Democrats voted 188-15 against, House Repub­li­cans 202-27 for. In the Se­nate the vote was 54-45, with Democrats vot­ing 33-10 against and Repub­li­cans 43-12 for. Those num­bers sug­gest that the four pend­ing FTAs are in se­vere trou­ble un­less some votes are switched.

The ad­min­is­tra­tion’s spe­cial trade rep­re­sen­ta­tives, Rob Port­man and then Susan Sch­wab, re­sponded to the CAFTA vote by ob­tain­ing more con­ces­sions on la­bor and en­vi­ron­men­tal stan­dards — the rea­son (or pre­text) many Democrats cited for vot­ing against CAFTA. They worked closely with Charles Ran­gel, now chair­man of the House Ways and Means Com­mit­tee, who has looked fa­vor­ably on pre­vi­ous FTAs and sees such agree­ments as a means for poorer coun­tries to im­prove the lot of their peo­ple. Which, of course, they are. As you learn in Eco­nomics 101, or in Adam Smith’s “The Wealth of Na­tions” if you want to go back farther, free trade ben­e­fits work­ers and con­sumers in both coun­tries. Freer trade ac­counts for bil­lions in im­prove­ment of the stan­dards of liv­ing in the United States.

FTAs with coun­tries like Peru, Colom­bia, Panama and South Korea ben­e­fits us more than them. They tend to place bar­ri­ers on our man­u­fac­tured prod­ucts and not to honor our in­tel­lec­tual prop­erty rights. We let most of their stuff in with lit­tle or no duty. Ap­prov­ing th­ese FTAs would open up fairly large mar­kets to us. Colom­bia, with 46 mil­lion peo­ple, is the sec­ond-largest Span­ish­s­peak­ing coun­try af­ter Mex­ico. Peru has 28 mil­lion and Panama, with a siz­zlingly grow­ing econ­omy, 3 mil­lion. South Korea, with 48 mil­lion peo­ple, has the 11th or 12th largest econ­omy in the world. Many politi­cians who have been vot­ing against FTAs are drool­ing over the pos­si­bil­ity of sell­ing things to im­pov­er­ished Cuba, which has only 11 mil­lion peo­ple. Some­one might want to ask them why they haven’t shown sim­i­lar en­thu­si­asm for sell­ing things to the CAFTA na­tions, which have 39 mil­lion, or the four na­tions with pend­ing FTAs, which have 125 mil­lion.

You can sum up the rea­son why most con­gres­sional Democrats are vot­ing against FTAs in six let­ters: AFL-CIO. The AFLCIO did a splen­did job rais­ing money and turn­ing out vot­ers for Democrats in 2006. Their ef­forts were highly so­phis­ti­cated and they may very well have made the dif­fer­ence in Democrats gain­ing their ma­jori­ties. And the AFL-CIO is dead set against free trade. It was un­happy with the Clin­ton ad­min­is­tra­tion when it pushed through the NAFTA with Mex­ico in 1993 and pre­dicted big job losses, and is not phased by the fact that the United States has pro­duced nearly 30 mil­lion new jobs net since that time.

This is a clas­sic ex­am­ple of in­ter­ests of the past trump­ing in­ter­ests of the fu­ture. Nearly half of all union mem­bers to­day are pub­lic em­ploy­ees, al­most none of whom are likely to be re­placed by work­ers abroad. But the union move­ment is still in mourn­ing for the hun­dreds of thou­sands of jobs in auto fac­to­ries, steel mills and other in­dus­tries that dis­ap­peared in the re­ces­sion of 1979-1982. The de­nun­ci­a­tions of NAFTA and the votes against CAFTA and the pend­ing FTAs are protests against what hap­pened in Detroit, Cleve­land and Pitts­burgh a quar­ter cen­tury ago.

Once upon a time, the po­si­tions of the par­ties were re­versed. In 1962, the Kennedy ad­min­is­tra­tion’s chief do­mes­tic pri­or­ity was a free-trade bill, which most Democrats voted for and most Repub­li­cans voted against. A dis­abling amend­ment was of­fered by Sen. Prescott Bush, Ge­orge W. Bush’s grand­fa­ther. Then it was Repub­li­cans look­ing back with nos­tal­gia to the days of William McKin­ley and War­ren Hard­ing. Now it is Democrats look­ing back with nos­tal­gia to the days of mil­lion­plus mem­ber­ship in the United Auto Work­ers and United Steel­work­ers. If the pend­ing FTAs go down, it will be bad news for the pro­gres­sive gov­ern­ments of Peru and Panama and South Korea and a dis­as­ter for Colom­bia and its pres­i­dent, Al­varo Uribe, who has suc­cess­fully been fight­ing the left­ist FARC ter­ror­ists and is threat­ened by Venezuela’s au­thor­i­tar­ian left­ist Hugo Chavez. It would be too bad if to­day’s in­ter­ests were sub­or­di­nated by nos­tal­gia for a past that will not re­turn.

Michael Barone is a na­tion­ally syn­di­cated colum­nist.

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