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From The Times

April 22, 2008

Free trade: Clinton/Obama's mistakes

The Democrats are shamelessly pandering to the fear in Pennsylvania heartlands about jobs

David Aaronovitch

Are CNN anchors the grandest beings on the planet? On the other side of the Atlantic last week, as Pope Benedict visited the New Rome, I saw CNN's Wolf Blitzer introducing an item about the pontiff's progress; and, as the visual backdrop for the piece he had a gigantic picture of himself, a gigantic picture of the Pope, and a gigantic picture of the two of them shaking hands. “Hey,” Americans were asking each other, “who's that grey-haired guy talking to Wolf Blitzer?”

But his colleague, Lou Dobbs, makes Blitzer look like Estelle Morris. Not just an anchor, Dobbs is a brand. He is managing editor of his own show and an editorialiser of impossible gravity. Dobbs's themes are mostly populist and concern the betrayal of the American Dream and its small-town Dreamers, by the cosmopolitan, corporate elite, and their undercutting army of illegal immigrants. “The fear is,” he once informed his viewers, concerning reconstruction work being given to aliens, “that New Orleans will turn into La Nueva Orleans.” Pick the ironies out of that one.

I mention Dobbs because his ideas are important today, when Pennsylvanians are voting in the Democratic primary. One of Dobbs's earlier books - Exporting America - encapsulates the feeling in old manufacturing states that free-trade agreements have led to US workers' jobs effectively going to foreigners. This may seem strange walking down a British high street past McDonald's or Starbucks, or arriving home to turn on your IBM and opening Microsoft Windows, but it's how many Americans feel, and how Dobbs, who speaks as though he has never ventured farther afield than Key West, encourages them to feel.

My favourite headline of the past week was “Clinton, Obama attack each other for being too negative”. Particularly abrasive has been their accusation-swapping on free trade. According to Barack Obama, Hillary Clinton is soft on the 1993 North American Free Trade Agreement - involving the US, Mexico and Canada. “She says speeches don't put food on the table,” Mr Obama said in response to Mrs Clinton's stock critique. “You know what? Nafta didn't put food on the table, either.” It was a “bad trade deal”.

According to Senator Clinton's camp, although her husband was involved in getting Nafta passed, she was always iffy about it. No, say the Obamians, we have her on tape saying Nafta was good, as recently as 2004. Well, retort the Clintonites, we have Obama in the same year opining that US exports have “benefited enormously” from Nafta. “The fact is,” Mr Obama complained, “she was saying great things about Nafta until she started running for president.” And so was he, she replies.

One possible conclusion you could draw from this is that the 2004 Clinton/Obama was right, and that Nafta has been a good deal. This is what John McCain, who is not playing to the blue-collar audience quite yet, is free to argue. But on the streets, as measured by opinion polls, a pessimistic Middle America is less than sold on free trade.

Paradoxically - and in contrast to the cherished claims of anti-globalisers - it seems to be the citizens of developing countries who most value the opportunity to compete. I don't have much difficulty with the argument that free trade is better than protectionism, even for developed countries. True, one of the problems in the US has been a reluctance to understand that there would be casualties of globalisation there too, and to take steps to reskill parts of the workforce. This has permitted the populists to gain traction for their notion that, left alone behind implausibly secure frontiers, Americans would be richer than they are today.

Now, as the US Ambassador recently reassured worried Canadian businessfolk, this could all just be “political rhetoric” for election year. Certainly the differences are for show; a look at Mr Obama's and Mrs Clinton's Senate records shows identical voting histories on trade questions. And there have been suggestions that their advisers have been tipping the wink to foreign allies not to take all this stuff too seriously.

Certainly credulity was put under stress when Mrs Clinton's campaign spokesman said of her attitude towards Bill's 1990s Nafta-ing: “Like other married couples who disagree on issues from time to time, she disagrees with her husband on this issue.” In his recent memoir, Alan Greenspan, the former head of the Fed, recalled that President Clinton, inheriting the Nafta package from the first President Bush, made it his own. “Clinton argued... that you cannot stop the world from turning; like it or not, America was increasingly part of the international economy... He and the White House staff went all out, and after a two-month struggle they got the treaty approved.” This was no small deal, but a central aspect of the Clinton presidency.

But look, if they don't really mean it, what does it matter? As the ambassador says, chalk it down to campaign hyperbole. Except that such talk does have consequences, as we saw last week. Ostensibly, House Democrats had objected to the ratification of a trade pact with Colombia, because certain human rights issues had not been resolved. Since their first objections, it was generally agreed that the Colombian Government had significantly cleaned up its act. Then the Democratic Speaker of the House, Nancy Pelosi, announced that her majority party would still oppose ratification, because: “We're first and foremost here to look out for the concerns of America's working families.” Such a continental shifting of the goalposts was accompanied by as fine a hypocrisy as you will hear this year. “I do take this action with deep respect for the people of Colombia,” she said, “and hope, and will be sure, that any message they receive is one of respect for their country.”

Only if they are total idiots. Ms Pelosi took her stance despite an open letter from a number of former senior officials in Democratic administrations and Democratic members of Congress. They had pointed out the benefits of such a trade agreement and added that “to delay passing the US-Colombia FTA this year would send a negative signal to one of our closest allies in Latin America, and would be seized upon by our country's opponents as a sign of US inconstancy at a critical time”.

Words matter, especially when they foster an illusion about how the world is. Wrong speeches lead to wrong policy. In Pennsylvania the best Clintonite Democrat today is John McCain.

The US trade deficit post NAFTA enactment has indeed gone up significantly but over 95% of the increase relates to oil and gas imports. One could reasonably suggest that importing energy from 2 democratic neighbors makes a bit more sense than buying more from the Middle East.

Jim, Toronto, Canada

The real irony here is there are almost as many politicians and populists ready to argue that Canada should get out of NAFTA, that it's been bad for our economy. The reality of course is obscured somewhat by the fog of the American election (will it ever end) and the ignorance of many who seem easily swayed by the rhetoric and hyperbole of those opposed to free trade. Heaven help us all if either Democratic candidate remembers this campaign "promise" should they get elected President!

Graham, Toronto, Canada

The USA is one of the most protectionist trading nations in the world, they preach free trade, markets and democracy but practice the opposite.

Nick P., Camberley Surrey, UK

They have learn't from the labour party,if you don't worked for minimum wage a pole will work for less,in reality america has to be retrained to understand their leaders are nolonger incharge of their futures,its global workforce and america has to be lean and mean, thast is no free meal tickets for trillion dollar wars.

MICAHEL, cahersiveen>adams towns, madness

Free trade has helped the US. From the UK perspective there are a whole host of sectors where US firms dominate. The whole global software industry seems to be run from the US. The world's most successful semi-conducter manufacturers are all US based. Half the worlds planes come from the US. High tech defence equipment is mainly US based. Most of the city banking institutions in the UK are US owned. Half our TV is made in the US. The sectors where the US is struggling (like automotive) is simply because US products aren't very good, and are ill-suited to any other market.

The problem for the US is that its generally right-wing laissez-faire politics mean the losers (of course there are winners and losers) lose big time, and are offered little help and thus no share in the (overall) rewards.

Nick, France,

We always get the argument in favour of free trade and globalisation. Does this mean there is no credible case for protectionism at all? Is there anyone in the political and economic world out there that will write in favour of the protectionist argument? And would this newspaper print it? When we get told there is only one possible side to a story we eventually get to wonder whether the truth may be a little more complex than the power brokers want to admit. There are even two sides to the global warming case, but our green taxing politicians seem to ignore the troubling data that doesn't fit their argument.

Trevor, Rome, Italy

Free trade is smart and good economics when it is with countries of similar minds on basic values such as child labor, environmental impact regulation, and the rule of law (e.i. small corruption level). Otherwise, if is foolish to establish even competition with competitors that play by different rules. You would hear little to no anti-free trade sentiments coming from the US if all of our world partners were like the UK, but they are not. As long as free trade deals are made with countries like China that have child labor, ridiculous wages, horrific environmental impacts and massive corruption, THIS American will oppose them, because it's like showing up to a basketball game wearing ski-boots. That's not fair competition nor fair trade. It's just stupid.

Kurt Heckman, Hagerstown, Maryland

in a world with no safety nets if you want someone's help you first have to get their attention. Shooting them in the leg won't help you and it won't won't help them help you - but it will get their attention. Think of it as a way of instigating dialogue.
/the alternatives, glorified begging, have not proven efficatious-the other notion - the suggested notion - to do nothing, and trust the good intentions of the market --hmm, somehow that doesn't catch the imagination it's immoral
- long ago my friends father worked driving a truck for the herald tribune - the high salaries allegedly drove the paper out of existence - my friends reply?- it puts the bread on the the table. end of story nobody loves anybody boo hoo boo hoo

glenn schaefer , holbrook, ny

It would be great for Canada if the US of A wants to renegotiate NAFTA. It would free Canada of a bad energy deal and allow us to control how much oil we send south or elsewhere. The previous conservative government negotiated away Canada's energy sovereignty - we'd love to get it back.

Paul, Vancouver, Canada

At least the McDonalds in Britain are employing British citizens. The McDonalds in the U.S. are employing illegal immigrants from Mexico. And Lou Dobbs speaks to a lot of us, even those of us in urban Southern California.

Robbie, San Diego, CA
------------
Perhaps you should come to Britain and take a look at our McDonalds before you say that rather than making silly assumptions. They're mainly staffed by immigrants from Eastern Europe, not that I have any problem with that.

Andy, London,

I am an unemployed semiconductor engineer. I don't give
a dam about free trade. I have voted for the Republicans for
25 years -- never again. They claimed that free trade would
stop illegal immigration -- it did not. We now have a boarder
war going on in the southern US border with the drug runners.
Over 130 people have been killed in LA since the first of the
year because of the drug wars. Free trade was played as
helping everyone improve their standard of living; for the vast
majority of Americans Free Trade has been a false promise.
Obama and Clinton are correct to blame Free Trade but
watch they will do nothing but talk and talk and talk.

John, Placentia, OC California

I'm getting really tired of being told how good NAFTA has been for the US. The reality is that the disappearing American middle class is the major casualty, as the skilled high paying jobs they held have now been outsourced to developing nations at much lower wages. I'd like the writer of this article to explain exactly what he thinks those workers should have been retrained to do . . . flip hamburgers?

Perhaps it was inevitable, that the affluence in the US would seep out into the rest of the world like water seeking its' own level. But I am leery of the reality that America is losing its' industries and its' skilled laborers, and that there are no comparable jobs to replace the income lost to these Americans, nor is there any way to maintain their skills should they ever become needed again in or by this nation.

Carleen Stephens, Battle Ground, Washington State, USA

Robbie, San Diego, CA

Good article. I found it interesting when working in China to hear that, while it didn't like their foreign policy, the Chinese government liked the Republican Party for their support of free trade. This small-town protectionist rhetoric electioneering may force the Democrats' hand

gwana, London,

The Obama- Hillary fight continues, and is quite the spectacle to say the least. They both pander to the voters with their tongues hanging out... In America we have serious issues that need to be dealt with, such as healthcare. I wish we could just adopt the British model which is the best healthcare system in the world. Especially when I'm wandering around out here in America with no healthcare coverage at all. You see I'm one of the estimated 47 million without healthcare in the US. I went to hospital twice , was smacked across the face each time with huge bills, and then I was sued in district court for the hospital bills and attorney's fees - it's a real bloody mess! But we can't get any substance from either democratic candidate. What we do get is abject foolishness-like Hillary downing a shot and a beer with some drunks at a bar. What a shame and embarrassment ! It makes me want to weep! The democratic choice is between 'tweedle dee' or 'tweedle dumb'...as far as I'm concerned.

Robert Tilford , McCracken, USA, Kansas

Great column, Aaronovitch.

Joseph, NYC, USA

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David Aaronovitch

David Aaronovitch is a writer, broadcaster and commentator on international politics and the media. He writes for The Times Comment page on Tuesdays. He has previously written for The Guardian, The Observer and The Independent, winning numerous accolades, including Columnist of the Year 2003 and the 2001 Orwell prize for journalism. He has appeared on the satirical TV current affairs programme Have I Got News For You and made radio broadcasts on historical topics