Thursday, September 8, 2011

Romney on Free Trade and the Trade Adjustment Assistance Program

The Trade Policy section of Mitt Romney’s Believe in America argues that:

Open markets have helped make America powerful and prosperous. Indeed, they have been one of the keys to our economic success since the country was founded … Every president beginning with Ronald Reagan has recognized this and acted upon it. President Reagan signed America’s first Free Trade Agreement (FTA), with Israel in 1985. George H. W. Bush and Bill Clinton both worked to negotiate and implement the North American Free Trade Agreement (NAFTA), which went into effect in 1994. George W. Bush successfully negotiated eleven FTAs, encompassing sixteen countries … Of course, opening markets must be a two-way street. For America truly to benefit in global commerce, we need to ensure there is access for our entrepreneurs to sell their high-quality products and services. This means that agreements must protect intellectual property from those who would violate the rules of free enterprise. Too often, trade agreements do not adequately address these concerns. Even when they do, actual enforcement lags.

Romney then accuses President Obama of stalling to put forth Free Trade Agreements with 3 nations. Let’s step back from his rhetoric to correct the record on several matters. President Reagan’s track record on free trade was not as great as Mr. Romney pretends. Neither was the free trade track record of George W. Bush.

As far as the delays in putting forth the most recent Free Trade Agreements, Ron Kirk notes:

We have also been insisting that Congress include the other element of our trade package – the Trade Adjustment Assistance program, which is a safety net for workers who, through no fault of their own, may be displaced from their jobs [because of increased imports]. Congress allowed that program to expire in February, and we've been working with them on a way to get it renewed. Democrats would prefer to move on the Trade Adjustment Assistance program first. The Republicans have insisted that we move on the [free trade agreements] first and do Trade Adjustment Assistance later. We've been trying to find a way to move everything forward at the same time. That's been the holdup.

Mr. Romney notes that this may be the holdup but then criticizes the program as if it were some sort of government dole to labor unions. Protection for corporations (they are people too) but not for workers – go figure!

But let’s recall that it was President Kennedy that first proposed this program as part of the “Kennedy Round”, which proposed to sharply curtail tariffs. When Mr. Romney claims that the White House recognized the benefits of open markets in the 1980’s, he was only off by 20 years.


Nerdy McGee said...

"Reagan signed America’s first Free Trade Agreement (FTA), with Israel in 1985."

Along with Turgot's brief stint and England's abolition of the Corn Laws, this act will surely be remembered as a colossal unfettering of international trade. I shudder at the thought of what it would be like to pay a tariff on Israeli goods.

Jack said...

Is it only a coincidence of time that with the ever increasing number of "free trade" agreements since either Kennedy or Reagan (take your pick) there has also been an ever decreasing level of income for the American worker as well as a continuous loss of job opportunity? China, India and corporate America appear to have done very well, but there has been no advantage to America's middle class.