Obama Readies Kennedy-Style Free Trade Push
It's his best bet to redeem his legacy and our economy.
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.
