Tuesday, December 4, 2007

Hillary, on Trade Policy

. Tuesday, December 4, 2007

"Well what I have called for is a time-out which is really a review of existing trade agreements and where they are benefiting our workers and our economy and where the provision should be strengthened to benefit the rising standards of living across the world and I also want to have a more comprehensive and thoughtful trade policy for the 21st century. There is nothing protectionist about this. It is a responsible course."

I struggle to figure out what exactly she is saying. She wants trade agreements that benefit our workers and economy; is she saying that current agreements do not benefit our economy? And what workers in particular? Workers at Microsoft and GlaxoSmithKline are doing fine under current agreements, while workers at GM and Ford are doing less well. So which group of workers is she talking about? Or are research scientists not workers in the parlance of the Democrats?

I also don't know what she means by strengthening provisions "to benefit the rising standards of living across the world." Quite apart from the tortured synatax, is she implicitly claiming that workers across the world are getting poorer as a result of trade? There is no evidence to support this claim. Moreover, if she cares about improving the standard of living "across the world" then the simple solution is to open the US market to goods produced by low-income people in the rest of the world. But, that seems to cut against her desire to protect the incomes of American manufacturing workers and suggests the need for acceleration of negotiations rather than a pause.

What bothers me more broadly is that in spite of calling for a new trade policy for the 21st century, Hillary neither seems to recognize the nature of the dilemma (how to assist import-competing sectors without killing the export-oriented sectors in the US and the rest of the world) nor offers even the slightest whisper of a policy. And it is not hard to think of a very simple solution to the dilemma: liberalize and use active labor market policies to help people transition out of import competing sectors. We can do this all on our own--no need for a pause, a review, or any lengthy and complicated international negotiations.

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Hillary, on Trade Policy
 
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