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The trade scapegoat

Trade has not been a front-burner issue for two years, since the country was in the throes of the 2008 presidential primaries.

Today, with the nation’s unemployment rate at 10 percent and a new wave of populist anger threatening to swamp Barack Obama’s presidency, don’t be surprised if the issue heats up again.

For fair-trade foes, the rallying point could be the Trade Reform, Accountability, Development and Employment Act, a measure introduced in Congress last June. Its supporters say-and opponents agree-that this bill would reshape U.S. trade policy.

Among other provisions, the bill would require the Government Accountability Office to conduct a full review of all major trade pacts, including the North American Free Trade Agreement. This review would include an assessment of economic impact as well as human rights, social and environmental standards.

It also would identify what aspects of "the NAFTA-WTO model" could not be included in future trade deals, including "bans on Buy American and anti-sweatshop or environmental procurement policies." Further, the bill requires the president to submit a plan "to renegotiate major trade agreements currently in force … to incorporate all of the (new) provisions."

There’s more: The measure would establish a special congressional "supercommittee" with jurisdiction over trade issues and replace the president’s "fast track" negotiating authority.

Underlying the TRADE Act is the belief that free trade has brought the nation’s economy to its knees and that more government intervention and protection of domestic industries will restore lost jobs and, in particular, revitalize the U.S. manufacturing sector.

In fact, trade liberalization has helped to create many more jobs than have disappeared due to outsourcing or other factors related to lowered barriers. And most job losses blamed on free trade stem from the impact of new technologies, industry cycles and similar forces.

A new wave of protectionism would be particularly bad news for Rochester, which has long been a leader in per capita exports. Local business leaders should not be quiet about what’s at stake if new barriers are erected at our borders.

2/5/10 (c) 2010 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or e-mail rbj@rbj.net.


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