Free Trade

Obama Readies Kennedy-Style Free Trade Push

It's his best bet to redeem his legacy and our economy.

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If President Obama wants to be more like John F. Kennedy, his best hope at this point is probably a final push on free trade.

Back when Mr. Obama was Senator Obama, there were high hopes for a return, of sorts, to the era that ended 50 years ago this week with the assassination of President Kennedy.

Obama, recall, came into office with members of the Kennedy family and JFK's White House counselor, Ted Sorenson, expressing hope that he would follow in JFK's footsteps.

Caroline Kennedy had endorsed Obama's candidacy in a January 27, 2008 New York Times op-ed piece headlined, "A President Like My Father." It said, "I have never had a president who inspired me the way people tell me that my father inspired them. But for the first time, I believe I have found the man who could be that president."

After Obama took office, the publisher of Ted Sorensen's book Kennedy released a revised edition with a new preface by Sorensen explaining that "Barack Obama paradoxically is much like John F. Kennedy" and listing 11 ways in which that was so. Some of these were vague—"Kennedy, like Obama, was a strong leader," and "Kennedy, like Obama, had a sense of history." Others were perhaps more intriguing. Obama was the first president since Kennedy to have moved to the White House directly after serving as a senator. They both entered the office relatively young. Kennedy was the first Catholic president; Obama was the first black president.

From a policy perspective, though, the Obama administration has taken a different course from Kennedy. Kennedy wanted to cut tax rates, including on upper income earners. Obama, after initially extending the Bush tax cuts, fought successfully to end them and to raise taxes. Kennedy pursued a foreign policy of peace through strength. Obama, after initially increasing American troop levels in Afghanistan and stepping up drone strikes abroad, backed down from a threat to use American military force in Syria and is chasing Iran in pursuit of a negotiated deal on nuclear weapons.

Mostly lost in history is the story of Kennedy the free trader. Arthur Schlesinger Jr. wrote in his book A Thousand Days that he and other liberals in the Kennedy administration thought that Kennedy was "mistaken in 1962 in making the entirely respectable, safe, and overrated trade expansion bill his top legislative priority instead of staging a knockdown-dragout fight over federal aid to education or Medicare."

When Kennedy did press the issue, he did so in terms that still resonate. In a January 25, 1962 "Special Message to the Congress on Foreign Trade Policy," he linked lowering trade barriers to "The need to accelerate our own economic growth." The president explained that "To try to shield American industry from the discipline of foreign competition would isolate our domestic price level from world prices, encourage domestic inflation, reduce our exports still further and invite less desirable Governmental solutions." He said, "The American consumer benefits most of all from an increase in foreign trade. Imports give him a wider choice of products at competitive prices. They introduce new ideas and new tastes, which often lead to new demands for American production." He insisted, "the warnings against increased imports based upon the lower level of wages paid in other countries are not telling the whole story." And he concluded, "This philosophy of the free market—the wider economic choice for men and nations—is as old as freedom itself. It is not a partisan philosophy."

In a May 17, 1962, speech on trade, Kennedy linked his own tariff-lowering efforts to those of the American Revolutionaries: "When the people of Boston in 1773 threw cargoes of tea into the harbor, the American Revolution was in effect under way, symbolized by this revolution against a tariff—a tariff which meant taxation without representation." Kennedy explained what economists call the law of comparative advantage: "We will be producing more of what we produce best, and others will be producing more of what they produce best."

The Trade Expansion Act of 1962 passed the House by a vote of 298 to 125, the Senate by 78 to 8. The Kennedy Round of trade negotiations that followed, from January 1963 to June 1967, cut tariffs on 6,300 items by an average of 35 percent.

It's been lost in the furor over ObamaCare and the diplomatic maneuverings in the Middle East, but the Obama administration is quietly pursuing two trade pacts that, if consummated, could put Obama on Kennedy's level on trade issues. One, the so-called Trans-Pacific Partnership, would be between the United States, Canada, and Mexico, which are already joined by the North American Free Trade Agreement, and Peru, Chile, Japan, Vietnam, Malaysia, Singapore, Brunei, Australia and New Zealand. The other, the so called Transatlantic Trade and Investment Partnership, is between the United States and the European Union.

Now, the last thing America should want to do is to allow the standards of either Communist Vietnam or the EU bureaucrats of Brussels to dictate what happens in our own market. So the details of any pact are important.

When Bill Clinton was trying to get Congress to pass NAFTA, he went to the Kennedy Library in Boston to make his case. Clinton's Treasury Secretary, Lawrence Summers, later called the NAFTA and WTO tariff reductions "the largest tax cut in the history of the world."

To turn around his second term, President Obama could do a lot worse than a Kennedy-style bipartisan push to extend free trade beyond North America to Europe and the Pacific.

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  1. “”Barack Obama paradoxically is much like John F. Kennedy” and listing 11 ways in which that was so.”

    Obama – 5 letters, Kennedy = 7 letters, so, yes, they are the same. See?
    And posting as an old fart, I’m not sure you really want to be compared to one of Joe’s offspring.

  2. The TPP is little more than a giveaway to the movie and music industries, as it uses the treaty power to make it illegal for Congress ever to loosen our IP laws, especially copyright. This is hardly free trade; it’s crony capitalism at its worst.

    1. +1 UVA

    2. Thank you. I wanted to say this as well. The fact that this “trade” agreement is nothing of the sort and that it is not public at all makes it pretty bad all around. The TPP is just a continuation of Obama’s cronyism.

  3. Reagan had more in common with Kennedy than does this president.

  4. I suspect the recent give-away to Iran was a reverse wag-the-dog that France vetoed. France!

    So expect for more hurriedly rushed deals designed to replace the bad headlines with something, anything that looks good, if only for a day.

  5. I am amazed that no one has yet made the connection between this article and the one about BitCoin assassinations.

    1. You’re now on every government list ever.

  6. Didn’t we just have a Reason article about this from a different. perspective ?

    The other writer pointed out that only about 25% of the rules were about trade itself. They were about RULZ.

    1. Nothing wrong with multiple articles from different perspectives.

      1. agreed. but this one didn’t really give a reason to be happy about TPP. It just sort of went “Kennedy. Free trade. Good.”.

  7. This philosophy of the free market?the wider economic choice for men and nations?is as old as freedom itself. It is not a partisan philosophy.

    Oh how times change.

  8. I don’t trust it at all. It’s gone be by cronies and for cronies.

  9. Obama doesn’t believe in the free market, nor does he believe in free trade. Any so-called ‘free trade’ agreement that he signs will be free in name only. In practice it will serve to enrich cronies and party loyalists, and broaden the regulatory state.

    1. Yep, its hard to get excited about a free trade agreement created in secrecy and probably at least a thousand pages long which create ten thousand pages of regulations all ruled over by faceless government bureaucrats who are part of a revolving door crony employment with the businesses that helped create the agreement.

      1. How does banning jailbreaking and unlocking of cell phones sound to you?

  10. Ahh, Kennedy spoke well on this topic, as did Clinton. However, Kennedy’s Trade Expansion Act allowed the President to lower tariffs on foreign goods by up to 50%, but was apparently dependent upon negotiations in which other countries agree to reciprocate (am I wrong?). What we really need is to have the guts to unilaterally eliminate all our import and export tariffs. Doing this overnight might suit me, but I’ll settle for 20% per year for 5 years, just to allow the adjustments other countries might then want to make on their own to happen slowly. Anyone who understands Henry Hazlitt’s book Economics In One Lesson, for instance, might know the great good this would do us despite all the obvious fears/myths.

  11. “””””””When the people of Boston in 1773 threw cargoes of tea into the harbor, the American Revolution was in effect under way, symbolized by this revolution against a tariff?a tariff which meant taxation without representation.””””

    The Tea Party (original) was throwing tariff free tea into the harbor. The East Indies Company was allowed to import tax free tea into the Colonies while everyone else’s tea was taxed. It was a protest against crony capitalism as much as about tariffs

  12. Yes, the details are important. A better approach is to unilaterally eliminate tariffs. Many of these “free trade” pacts are really “managed trade” pacts that frequently impose more laws on us. Sure, tariffs may be lowered, but there’s more to genuine free trade than that.

  13. Google is paying 75$/hour! Just work for few hours & spend more time with friends and family. On sunday I bought themselves a Alfa Romeo from having made $5637 this month. its the best-job Ive ever had.It sounds unbelievable but you wont forgive yourself if you don’t check it out http://www.Buzz95.com

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