Is Obama a protectionist?

In Michigan, the candidate says we can't turn back the tide of globalization, but not all trade agreements make sense. Is he contradicting himself? Or just being nuanced?


Andrew Leonard
June 17, 2008 12:49AM (UTC)

At the close of a very standard defense of free trade in the Sunday New York Times Magazine, the usually excellent financial reporter Roger Lowenstein makes the remarkable claim that "all discussions of the victims of trade ignore the considerable benefits: the exports we sell and the lower prices for consumers at home."

Really? All discussions? That is a generalization so broad as to border on the utterly absurd. Has Lowenstein been paying any attention at all to the ongoing discussions about trade that have been raging in all corners of the econoblogosphere for months and even years? Only the most hardcore protectionists could be accused of completely "ignoring" the benefits of trade. For the rest of the participants in the debate, it's all a matter of degree. The vast majority of economists will acknowledge that there are winners and losers every time patterns of trade change. The policy questions that come into play, particularly when a bad economy and growing wealth inequality are factored in, is what to do about the losers? Out of work Ohioans are remarkably unassuaged when told how much they are saving at Wal-Mart. That is a political reality that one ignores at one's peril.

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Furthermore, if Lowenstein thinks that the 12 bilateral deals signed by President Bush "with countries ranging from Chile to Morocco" really deserve to be classified under the rubric of "free trade," then he is displaying a surprising level of dogmatism for someone who normally sees pretty clearly on economic affairs. Most of those FTAs add up to little more than efforts by the U.S. government to win concessions for special corporate interests by dangling the lure of tariff-free access to the U.S. market. Securing restrictive intellectual property laws that will protect the foreign interests of American pharmaceutical companies is hardly "free trade" -- it should more accurately be labeled "managed trade" in which the U.S. government carries water on behalf of some of the biggest corporate campaign finance contributors in the United States.

Amusingly, although Lowenstein begins his piece by bashing Barack Obama for attacking "free trade as if it were a scourge," the Democratic candidate for president provided considerably more nuance in a speech he gave in Michigan Monday morning than does Lowenstein on Sunday. (Note, by the way, Obama's explicit reference to how trade benefits consumers and American exporters.)

There are some who believe that we must try to turn back the clock on this new world; that the only chance to maintain our living standards is to build a fortress around America; to stop trading with other countries, shut down immigration, and rely on old industries. I disagree. Not only is it impossible to turn back the tide of globalization, but efforts to do so can make us worse off...

But even as we welcome competition, we need to remember that our economic policies must be supported by strong and smart trade policies. I have said before, and will say again -- I believe in free trade. It can save money for our consumers, generate business for U.S. exporters, and expand global wealth. But unlike George Bush and John McCain, I do not think that any trade agreement is a good trade agreement. I don't think an agreement that allows South Korea to import hundreds of thousands of cars into the U.S., but continues to restrict U.S. car exports into South Korea to a few thousand, is a smart deal. I don't think that trade agreements without labor or environmental agreements are in our long term interests

If we continue to let our trade policy be dictated by special interests, then American workers will continue to be undermined, and public support for robust trade will continue to erode. That might make sense to the Washington lobbyists who run Senator McCain's campaign, but it won't help our nation compete. Allowing subsidized and unfairly traded products to flood our markets is not free trade and it's not fair to the people of Michigan. We cannot stand by while countries manipulate currencies to promote exports, creating huge imbalances in the global economy. We cannot let foreign regulatory policies exclude American products. We cannot let enforcement of existing trade agreements take a backseat to the negotiation of new ones. Put simply, we need tougher negotiators on our side of the table -- to strike bargains that are good not just for Wall Street, but also for Main Street. And when I am President, that's what we will do.

How the World Works believes that more can be achieved for American workers by boosting the safety net and investing in training and education than through "tough" negotiation of new trade agreements. We're also inclined to believe that technological progress and the ensuing improvements in American corporate "productivity" -- i.e., greater output from less labor -- is a bigger problem for the working class in the United States than is trade. And finally, it is painfully obvious that Obama's reference to the South Korean automotive market is an out-and-out pander to Michigan UAW members. But it is also exceedingly irksome to see opposition to free trade agreements that are largely crafted by and for special interests characterized as "protectionist" by people who should know better. Indeed, a number of economists believe the proliferation of such bilateral pacts actually makes it harder to achieve the kind of broad-based multilateral trade deals that contribute the most to global prosperity. Furthermore, it is possible to simultaneously condemn bilateral free trade agreements and criticize the various subsidies and tariffs that protect U.S. agricultural goods like sugar and cotton. What How the World Works wants from a candidate is someone who understands that you can't build a fortress America that cuts itself off from the rest of the world and that in general trade does contribute to economic growth, but that at the same time it also makes political and economic sense to pay as much attention to those who lose out from trade as it does to cater to, say, the pharmaceutical industry.

UPDATE: Felix Salmon has some additional thoughts to share on Lowenstein.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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2008 Elections Barack Obama Globalization How The World Works

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