03 May 2008

The Democrats and Free Trade

I have been quite busy these days so I must apologize for being a couple of months late in noticing this, but I was amazed, AMAZED, when I watched the Clinton/Obama debate in Cleveland, Ohio that took place past February on MSNBC. In the debate, both candidates spoke out against NAFTA, threatening to pull out if the treaty wasn’t renegotiated. Just take a look at what Clinton and Obama had to say:


I find it amazing that the two key democratic candidates running for president refuse to be pragmatic enough to recognize the benefits of free trade. This is especially surprising when looking at Hillary Clinton since her husband is the one who came up with NAFTA in the first place. As the high-caliber politician that she is, she should know better. And as for Barack Obama, for a candidate who keeps talking about “hope” and keeps calling for “change”, this kind of rhetoric sure sounds a lot like same-old, same-old democrat populism.

In the debate, both candidates kept talking about the hardships that middle- and working-class workers in Ohio, Michigan, and up-state New York have to go through. That may be true, but I think both candidates are too preoccupied with wooing unemployed workers and are failing to see the big picture. In the 21st century it is absurd to deny that free trade and globalization is the future.

Globalization benefits everyone. It brings down prices and gives consumers a wider choice. It creates jobs and makes companies as dynamic as they have ever been. And this applies to America especially – America still has some of the most competitive and creative companies in the world and the standard of living of its workers is still arguably the best. Thanks to NAFTA, Mexico has seen its poverty rates fall and incomes have gone up remarkably. And policy-makers in both America and Canada are in favor of more integration. In this regard, the republican candidate John McCain is right on target when he tells unemployed workers from middle-America that “I can't look you in the eye and tell you that those steel mills are coming back"[1]. Instead he encourages them be innovative and adapt with the changing world: “I will commit to giving these workers a second chance. They need it, they deserve it."[2] NAFTA does not need to be renegotiated, if anything, there should be more trade liberalization with the rest of Latin America.

Hillary Clinton has even gone as far as to doubt the Doha round trade talks, talks which if successful, could mean a world of benefits for some of the world’s poorest countries. In a Financial Times interview she suggested that the US should take “time out” on all new trade agreements. How retrograde!

I am especially disappointed with Barack Obama. He was supposed to be the candidate of hope! He’s half Kenyan half American; he was meant to be the personification of global attitudes and global partnership. Instead, he has chosen a protectionist and populist attitude, making promises to desperate workers and playing on their fears. Obama has promised to improve America’s reputation worldwide, but how will protectionism help improve America’s reputation?

A lot of commentators have said that in reality both candidates are in favor of free trade but are just wooing their base in order to get elected. I truly hope that is the case, but if it is, it’s also sad to see that the democrats are incapable of talking to their voters as if they were adults. If Clinton and Obama are really in favor of free trade, they should take a lesson from McCain and tell it like it is. And if they are genuinely against free trade then they should pull out of the race and pick up an economics textbook, because the world cannot afford more protectionism.

[2] Ibid.