Monday, August 13

Will a Democrat president erect trade barriers?

"Pundita, re your post Hillary Clinton's coded message on US trade policy:

In response to the question, "If you call a tail a leg, how many legs does a horse have?" Abe Lincoln once responded "Four. No matter what you call it a tail is not a leg."

Whether it's called social dumping, fair trade, smart trade or anything else, putting conditions on trade that other countries can't or won't comply with is erecting trade barriers.

Nearly every move I see by all but a very few Democrats are moves in the direction of isolationism.
Dave Schuler"
The Glittering Eye

Dear Dave:
The Democrats have latched onto trade policy to further a social agenda in the same way they latched onto the judicial system; if they can't get their agenda through the voting process then by any which way.

But I note it was a Republican servant, Robert Zoellick, who radically alerted US trade policy with the idea behind the Doha round, which posits the most developed countries using trade as a kind of aid to developing countries. When the U.S. and other developed countries couldn't deliver on their promises, there was a backlash from the developing countries. With that, multilateralism collapsed into bilateral trade deals.

The Democrats are also playing with fire by trying to use trade deals as a means to pressure a government for social justice in their country. Brussels can get away with more pressure for social reform when dealing with countries that want to join the European Union.

The United States can't offer statehood to other countries as a carrot for good behavior. So it's folly for the US to attempt to copy the EU model carrrot-and-stick model, which is what the Democrats want to do.

I like to think that the requirements of globalized trade rule out isolationist trade policies but that doesn't rule out trade wars. So I think on balance you're right; no matter the motive or route, the 'fair trade' policy would lead to reciprocal trade barriers.

At the same time, the US trade policy does need an overhaul with regard to China. And I agree with your observation in your 'Isolationism Watch' post: "We do [...] have the ability to influence our own economy by reforming our trade policy with China and IMO we should do so very, very carefully."

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