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Clinton's MoveOn remarks draw fire

Pennsylvania's economy belies claims

NAFTA debate mirage

By Shanker Singham
April 20, 2008

It seems both Sen. Barack Obama and Sen. Hillary Clinton are desperately trying to run to the left of each other on trade.

Their recent statements about renegotiating the North American Free Trade Agreement exposes a real problem in how both candidates respond to the economic anxiety of people in Pennsylvania, Ohio, Michigan and other states on globalization and trade.

Most recently, the rhetoric surrounding the pending U.S.-Colombia Free Trade Agreement has been equally unhelpful, particularly since most Colombian products already enter the U.S. duty-free under existing trade arrangements and all the agreement would do is lower tariffs for U.S. products exported to Colombia and lock in needed reforms in Colombia.

The problem that people are right to be concerned about stems from fears about who they are competing against. The global economic competition of today is a two-sided coin. On one side, the increased competition leads to benefits for U.S. consumers — lower interest rates, lower prices and more choice for products.

These consumer benefits are rarely mentioned by Mr. Obama and Mrs. Clinton, which is strange given that these consumer benefits help the poor far more than they help the rich. These benefits are good things that should be celebrated. The other side of the coin includes the unfairness about which so many complain.

But we must be careful to differentiate between the competitor from overseas that wins because of business prowess, efficiency and skill, which should be encouraged, as opposed to the competitor that wins because of the market-distorting practices of its home government.

Without question, we must have a trade policy that deals properly with those complaints and, in effect, tells the displaced worker that we feel your pain, that pain arises because of a lack of free trade and free markets in other countries, and that we can and will move those countries further down the free-market, free-trade path to ensure the global market is fair. And we must honestly say some part of that pain, perhaps the lion's share, is due to the fact the world is changing and that we need education systems and market-based health-care policies that (1) adequately equip our workers for the jobs of tomorrow and (2) do not unnecessarily burden U.S. firms and workers.

Sadly, the world seems divided between those ardent free traders who have no response to the anger and frustration expressed in Ohio, Pennsylvania and Michigan right now, and protectionists whose solution is to make our market less free in order to keep others out.

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