Politics & Policy


Trading in the past.

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 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.

#ad#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 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 Spanish-speaking country after Mexico. Peru has 28 million and Panama, with a sizzlingly growing economy, three million. South Korea, with 48 million people, has the eleventh or twelfth 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 eleven 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 AFL-CIO 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 million-plus 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 — Michael Barone is a senior political analyst for the Washington Examiner, resident fellow at the American Enterprise Institute, and longtime co-author of The Almanac of American Politics. © 2018 Creators.com

Most Popular

Film & TV

In Unsane, Aetna Meets Kafka

Unsane doesn’t take the form of a horror film; at first, it appears to be a Hitchcockian thriller about mistaken identity or perhaps getting ensnared in a web of bureaucracy. Yet with clinical detachment it develops into a nerve-flaying story almost too agonizing to endure. Unlike most horror movies, it isn’t ... Read More
Science & Tech

The Real Deal With the Tech Giants

A bit of dialogue from the old television series Person of Interest, where a reclusive billionaire programmer and a former CIA agent use a giant supercomputer to predict crimes and save people: FINCH: Hester's living off the grid. No photos online and nothing on the social networking sites. REESE: I've never ... Read More

Viva l’Italia?

Italy has just had elections, with very interesting results. I wanted to talk with Alberto Mingardi, which I have. He is one of the leading classical liberals in Italy -- the director general of the Bruno Leoni Institute, in Milan. (Mingardi himself is Milanese.) He is also an authority in arts and letters. In ... Read More

Putin and the Cult of Leadership

On Sunday, Russian dictator Vladimir Putin won an unsurprising reelection-campaign victory against Communist Party candidate Pavel Grudinin, by a margin of 76.7 percent to 11.8 percent. The results were unsurprising because Putin is a tyrant who murders or imprisons political rivals, and who isn’t afraid to use ... Read More

Trump and Brexit Derangement Syndrome

I am not one of those Brexiteers who believe that Brexit and Trumpism are essentially the same phenomenon in two different countries. To be sure, they both draw on some of the same political trends, notably a distrust of elites and an upsurge of popular anger over evident failures of public policy such as illegal ... Read More

Stand Up to Putin

President Putin’s landslide victory in Russia’s presidential election was achieved against the lackluster competition of a group of mediocre candidates from which the sole serious opponent had been excluded; amid plausible allegations that his security services had tried to poison two Russians in England by ... Read More

Nordic Welfare States Worsen the Gender Gap

Following International Women's Day 2018, a host of policies have been promoted as ways to advance women's careers. CNBC, for example, has run a story arguing that policies such as parental leave for both parents can raise women’s incomes. In the Huffington Post we can read that adopting the welfare policies of ... Read More