Economics

Trade Obstructionism

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From last week, but alas timeless: Robert Samuelson in the Washington Post on the continued strength of ignorant and frightened protectionism. The nut: 

Just last week Democratic congressional leaders signaled that they may oppose new trade agreements with Colombia and Peru. Who, if anyone, would benefit is unclear. As The Post reported, the agreements' darkened prospects have already led to layoffs in Colombia. In the United States, manufacturers believe the agreements would expand their exports. Peru's tariffs average about 10 percent, Colombia's about 11 percent, says Frank Vargo of the National Association of Manufacturers. Most of these would go to zero under the agreements.We are dealing with something new here. It transcends traditional protectionism, which tries to shield specific industries and workers from imports. It's trade obstructionism: a reflexive reaction against almost any trade agreement. The idea is that much trade is inherently "unfair."

While I'm not sure how "new" this attitude is–it's pretty classic, timeless protectionism–Samuelson brings some data to the table to counter it: 

American trade deficits haven't destroyed U.S. job creation by sending work abroad. Consider: From 1980 to 2006, the trade deficit jumped from $19 billion to an estimated $786 billion, or from less than 1 percent of gross domestic product to about 6 percent. Still, employment in the same period rose from 99 million to 145 million. Job creation defies the trade deficits, whose causes lie largely beyond our control and have little to do with "unfair" trade practices.Faster economic growth in the United States than in many of our major trading partners has stunted our exports and increased our imports. Likewise, the dollar's role as the main global currency—used for trade and international investment—has kept its exchange rate high. Companies, individuals and governments hold on to dollars rather than selling. This makes U.S. exports more expensive and imports cheaper.

Link via Sheldon Richman at Foundation for Economic Education.

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  1. So, the Democrat party is just one step away from being on record opposing economic development in the less affluent parts of the world.

    Sounds pretty cold to me.

  2. “economic development in the less affluent parts of the world”
    Yeah, and that’s a central pillar of either party. Nice try Guy.

  3. Is that meant to be a comeback, “pinko”?

  4. The blessings of the Democratic Ascendency?

  5. I think this has to qualify as the one issue that scares me most about the resurgent Democratic Congress. Byron Dorgan, need I say more?

  6. Every hand-knit llama wool hat with earflaps and tassels that those damned Peruvians sell is one less llama wool hat that can be sold by good old red-blooded Americans!

  7. Although, to be fair, the Republicans arent exactly monoliths of freedom either when it comes to trade. This in Slate:

    http://www.slate.com/id/2154620/?nav=tap3

  8. This would be a tragic development if it were a new development.

    I have a feeling it’s going to get worse as Republicans try to woo those Lou Dobbs Dems into Lou Dobbs Repubs.

  9. steveintheknow,

    Certainly there are National Socialists who vote Republican, but there are a lot more National Socialist who vote Democrat and a higher population of them running that party.

  10. We are dealing with something new here. It transcends traditional protectionism, which tries to shield specific industries and workers from imports. It’s trade obstructionism: a reflexive reaction against almost any trade agreement. The idea is that much trade is inherently “unfair.”

    While I’m not sure how “new” this attitude is–it’s pretty classic, timeless protectionism

    Well, I think the point is that, for the first time, perhaps, Democrats are in a situation where opposition is clearly just anti-trade in general, and claiming to be looking out for any one group will not fly.

    Exposing them would be wonderful, because I honestly think lots of people out there really believe Dems are trying to take care of them. This is pretty blatantly bad for everyone, and maybe some eyes will open up. And by some I mean approximately ten. That’s five pairs.

  11. So even though everyone who opposed these bills has made it clear that they are seeking to pass trade bills that include include environmental and labor protections, you’re just going to pretend those concerns have never been expressed, and argue against a more convenient mercantilist position that no one is advocating.

    Your honesty is surely the sign of someone confident in the objective truth of his position.

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