TCS Daily

What Happened to 'Compete, Not Retreat'?

By Claude Barfield - September 23, 2004 12:00 AM

Certainly neither candidate or party has a monopoly on the right course for future public policy, but at least in one area -- international trade policy -- supporters of free trade and more open, competitive markets (including the U.S. market) have a clear choice: on the one hand, in unprecedented fashion President Bush and the Republicans have vigorously touted their record of championing new free trade agreements throughout the campaign, while Senator Kerry and the Democrats have waffled (on the part of the candidate), or criticized the market-opening achievements of the Bush administration and taken blatantly protectionist positions (on the part of the party platform and leading Democratic spokespersons).

Candidate Kerry's current stand -- in contrast to a generally internationalist record as a senator -- is basically: "I am for free trade, but...", with the buts including demands for sweeping new labor and environmental rules and sanctions, punishing "Benedict Arnold" CEOs who invest abroad, and, if all else fails, unilaterally forcing open foreign markets by "us(ing) the power of the world's biggest marketplace to leverage the kind of behavior that we want." (This from the leading critic of President Bush's alleged "unilateralism" in foreign policy).

To be fair, Kerry, like Clinton before him, faces strong anti-globalist pressures from important elements of the Democratic coalition -- the trade unions, many environmental organizations, and former Naderites. Thus, he has been forced to call for a wholesale review of all existing U.S. trade agreements in the first 120 days of his presidency, and then stand silent when Teamsters president James Hoffa announced after meeting with him that the result would be a reversal of decades-old, bipartisan support for open markets and new trade agreements. The Kerry campaign was also conspicuously silent when Senate minority leader, Tom Daschle, denounced the recent breakthrough in the Doha Round WTO negotiations as a "sellout" of U.S. farmers.

Leading internationalists in the Democratic party argue that the campaign's protectionist and unilateralist thrusts are merely rhetorical gestures to appease important elements of the Democratic base, but that in the end Kerry trade policy will not look much different than previous administrations. The problem with this argument is that it's 2004, not 1992. In 1992 and for much of his presidency, Bill Clinton got away with this straddling and triangulation. But labor, environmentalists and Naderites have long since vowed that they will not "gulled" again -- and that they will demand results this time. It should also be noted that by the end of the 1990s, two-thirds of House Democrats and almost half of Senate Democrats routinely opposed new free trade agreements.

Should he win the presidency, then, it will be impossible not to deliver on some of the promises made in the campaign. With that in mind, what are the most retrograde elements of the "Kerry-Edwards trade plan," as outlined in campaign statements and the Democratic party's website?

  • The combination of the 120-day review and the demand that new labor and environmental sanctions be included in future (and existing) trade agreements -- if pushed as a sine qua non -- will torpedo both the WTO Doha Round and the Free Trade of the Americas negotiations, as well as future agreements with the burgeoning East Asian economies. While the United States can force small countries in bilateral negotiations to give way on these issues, such is not the case with larger countries in regional and world trade negotiations.

  • The promise to reinstate the Super 301 process, similarly, will blight trade relations with all U.S. trading partners -- as well as put the United States in violation of rules it agreed to in the Uruguay Round of WTO negotiations. Under Super 301 (enacted in the 1988 trade act and allowed to lapse several years later), the United States acted as prosecutor, jury and judge in determining unfair trade practices and sanctioning nations found guilty. For U.S. trading partners, it symbolized the ultimate in U.S. unilateral bullying.

  • Support for new "Buy America" rules will overturn a long-standing U.S. policy (supported by both Democratic and Republican administrations) to introduce equal treatment in government and private procurement contracts for foreign and domestic firms. This has been a central priority for U.S. negotiators in current multilateral, regional, and bilateral trade negotiations, not the least because of the high competitiveness of U.S. firms in international construction, telecommunications, and defense contracts.

  • Support for the so-called Byrd Amendment -- by which U.S. firms that win antidumping cases are allowed to double dip through disbursement to them of the funds collected by antidumping duties -- will place the United States once again in violation of WTO rules and lead the a large increase in antidumping cases as corporations line up at this new pork barrel trough.

Certainly in a Kerry presidency not all of these damaging proposals will be enacted or even pushed with vigor. But it is also true that taken together they represent a hunkering down and inward looking defensiveness that is far removed from Bill Clinton's bold exhortation in 1992 for the United States to "compete not retreat."

Claude Barfield is Resident Scholar, American Enterprise Institute


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