Telling the truth about trade
Two savvy Democratic pros were recently discussing the trade issue in the current campaign. Given the large number of jobs lost under President Bush, said one, Democrats will find the lure of protectionism “irresistible.” Yes, lamented the other, the party “has come a long way” from the days when Bill Clinton preached the gospel of free trade.
Protectionism might be irresistible, but it is profoundly irresponsible. Now that Sen. John Edwards has won the South Carolina primary with an anti-trade message, and Sen. Joe Lieberman, an ardent free-marketeer, has dropped his presidential bid, the temptation to demagogue this issue will only grow stronger. But the Democrats who yield to this impulse will be wrong on the facts — and what’s more, they know better.
Economists agree that trade creates far more jobs than it destroys. Moreover, it reduces the cost of consumer goods at home while building new customers for American products abroad.
But here’s the problem: trade results in losers as well as winners, and the losers are far easier to document. A picture of a shuttered textile mill fits nicely into an inflammatory campaign commercial. But a dockworker who gets a job when trade expands, or a shopper who saves $5 on an imported sweater, are far less visible.
Instead of trying to explain and defend the economic realities of trade, most Democrats, including front-runner John Kerry, are making false promises to “save” jobs by restricting trade when they know that’s impossible, even counterproductive.
Take Sen. Edwards, who ran commercials in South Carolina in which he said, “My dad worked in textile mills to put food on our table and clothes on our backs. Today, the mills are gone. And so are the jobs.” That’s why he opposes pacts like the North American Free Trade Agreement (NAFTA).
It’s true, textile mills have fled South Carolina, devastating many small towns. But that’s the way a dynamic economy works. Old jobs die, new jobs are born. Several generations ago, those same textile mills abandoned New England and relocated to the South.
Moreover, Edwards never mentions that Charleston is the second-biggest container port on the East Coast, that South Carolina exports $10 billion worth of goods to 180 countries each year, and that trade supports an estimated 150,000 jobs in the state.
The benefits of open markets far outweigh the costs. But Edwards, who talks so effectively about his optimistic vision of America, embraces pessimism when it comes to trade. And that’s why Democrats might ultimately be wrong about the politics as well as the policy of this issue.
Fortunately, thoughtful voices have been raised on the other side. Fed chairman Alan Greenspan weighed in recently with a useful reminder that “we can be confident new jobs will displace old ones as they always have.”
The Democrats should tell this truth to the American people. They should return to their tradition of free trade while advancing two positive roles for government. One: prying open closed markets in countries like China so that American exports have a fair shot. Two: alleviating what Greenspan calls “the high degree of pain” inflicted on communities that lose their factories and their future.
Protectionism is the wrong remedy for the economy’s feeble record of job creation, and any candidate who continues to find it “irresistible” is committing first-degree fraud at the voters’ expense.
(Cokie and Steven Roberts are syndicated columnists.)