Thursday, October 30, 2008

Obama on Trade

. Thursday, October 30, 2008

Today I voted for Obama for president, but I did so with some reticence. On balance, I feel that he is a much more acceptable candidate than McCain, but this does not make him above reproach. One columnist for The Times of India channels some of my concern:

McCain is one of the few American politicians in either party with the courage and conviction to stand up to protectionist populism. By contrast, Obama embodies protectionism.

Look at the accompanying chart. It shows that McCain has voted 88% of the time against bills creating trade barriers, and 90% of the time against export subsidies for US producers. Few other senators have such a splendid record.

Obama has served a much shorter time in the Senate, and avoided voting on many key issues. He has voted against trade barriers only 36% of the time. He supported export subsidies on the two occasions on which he voted, a 100% protectionist record in this regard. ...

Unlike Obama, McCain voted against imposing trade sanctions on China for supposedly undervaluing its currency to keep exports booming and accumulate large forex reserves. India has followed a similar policy, though with less export success than China. But if indeed India achieves big success in the future, it could be similarly targeted by US legislators and, will need people like McCain to resist.

Obama favours extensive subsidies for US farmers, hitting Third World exporters like India. This has been one of the issues on which the Doha Round of WTO is gridlocked. McCain could open the gridlock, Obama will strengthen it.

Obama also favours subsidies for converting maize to ethanol. The massive diversion of maize from food to ethanol has sent global food and fertiliser prices skyrocketing, hitting countries like India. But McCain has always opposed subsidies for both US agriculture and ethanol. While campaigning, he had the courage to oppose such subsidies even in Iowa, an agricultural state he badly needs to win if he is to become president.

There is more at the link, but this commentator isn't the first to express concern over Obama's protectionist leanings. Indeed, some have gone so far as to argue that Obama is actually lying, and if elected would actually follow in W.J. Clinton's footsteps on trade. Austan Goolsbee, one of Obama's chief economic advisors, intimated as much to representatives of the Canadian government after one NAFTA-bashing session earlier in the campaign. Perhaps. But Obama's voting record and rhetoric argue against the idea. One of the many major policy mistakes of the Great Depression was the institution of the Smoot-Hawley Tariff. A similar move at this juncture might be similarly disastrous. In my view, this is a strictly non-partisan issue; regardless of who we personally support for president, we should hope that if Obama is elected he will have learned from history.


Obama on Trade




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