Tuesday, April 8, 2008

The Nativist and The Trade Czar

Last week was the fight of the century: the nation’s preeminent trade protectionist faced off against America’s strongest proponent of free trade. The mouthy, opinionated, my-country-right-or-wrong Lou Dobbs (bottom right) invited U.S. Trade Representative Susan Schwab (left) on his program to debate America’s trade policy. Surprisingly, she accepted the offer. I say surprisingly because, if you’ve never had the pleasure of seeing him, Dobbs is not your typical journalist. The idea of his show is not so much to inform as to propagate his particular brand of politics, which includes anti-immigration and anti-free trade. Dobbs began the discussion with the elegant line “Free trade. It sucks and I have been saying that for years. You think it's a panacea for much.” He elaborated by calling the Bush Administration’s pro-trade stance “nonsense.” The whole of U.S. trade policy is nonsense? The hyperbole overstates Dobbs' point: Is it nonsense to conclude regional trade deals with countries like Colombia when you consider that we provide preferential access to such developing countries? In other words, they already enjoy the lowest possible tariffs on a wide-range of exports to the United States. Concluding a deal with Colombia merely solidifies the preferences we already have in place. It means that businesses investing in the United States and in Colombia will have some certainty that tariff levels and market conditions will remain stable from year to year. It means that Colombia will have to lower far more of their tariffs than we will have to lower ours. Having said that, I confess I did manage to find some points of agreement with Dobbs. He took exception to the Administration’s view that “if Mr. Market's happy, we're all happy.” Dobbs is right. It is not all about free trade, the market and business. Colombia for example has an appalling record on protecting labor rights. We ignore or reward such behavior at our own peril. We need stronger labor standards in these agreements, an issue Republicans largely ignore. How do we handle the problem? By staking out our negotiating position and holding Colombia to that standard. But discounting the deal as nonsense is heading in the wrong direction, a point Dobbs seems to concede in the following exchange:

SCHWAB: Free and fair trade. You look at the strongest, most positive point in the U.S. economy today, it's U.S. exports. 40 percent of our economic growth last year was attributable to the increase in exports. So, here you got this deal with Colombia we negotiated and you can throw a lot of aggregate numbers about jobs and trade, we put this together one deal at a time and this deal even Lou Dobbs should like. Right now, Colombia gets almost unlimited access to the U.S. market. 92 percent of what Colombia produces has been coming in here duty-free since 1991. This free trade agreement opens Colombia's market to our exports. And that means Caterpillar Tractors. It means John Deer equipment in Illinois. It means Sony televisions. . . . Sony televisions out of Pennsylvania, apples, poultry, rice.

DOBBS: Sony televisions out of Pennsylvania?

SCHWAB: Pittsburgh, Pennsylvania shipped to Colombia. We have today 8,000 mall and medium sized businesses that ship to Columbia. Right now, they face tariffs up to 35 percent. Here's the key. If we're going to be competitive vis-a-vis China, for example, those 8,000 small, medium-sized companies are competing with the Chinese for the Colombian market. If this free trade agreement gross through, we have the edge. We are more competitive.

DOBBS: There shouldn't be any doubt about it because if we have our markets open to 92 percent of Colombia's exports already, what in the world could China do that
would be better than that?

1 comment:

Jennifer said...

I think that critics of the Colombia Fair Trade Agreement are trying to use this time to educate the US public about US intervention in Colombia and the general state of its civil war, in particular the state's role in the non-enforcement of labor protections as well as its proactive repression of trade unionists, independent politicians, journalists, human rights activists, etc. In addition to Colombia's population expressing its opposition to the agreement, I think US activists are attempting to provide internationalist solidarity to their brethren Colombian activists.