What’s the Issue?
Since the end of WWII, U.S. trade policy has primarily promoted international free trade. This has meant entering into agreements, both bilateral (with a single country) and multilateral (with a group of countries), to reduce trade trade tariffs, quotas, and subsidies. Proponents of free trade argue that an open policy benefits society by increasing competition and productivity, therefore reducing market inefficiency (in efficient markets, goods are produced at the best possible price, typically resulting in net benefits for society--some people lose out, but society as a whole benefits). Proponents also argue that it expands markets resulting in economic growth and an increase in living standards. It is also thought that free trade reduces conflict between countries as their markets become interdependent and the cost of war is increased by the possible disruption to the economy.
Opponents of free trade include the anti-globalization movement , fair trade activists, and some conservatives. The anti-globalization movement and fair trade activists argue that free trade results mainly in profits for large corporations at the expense of the poor, the working class, and the environment. Many argue that free trade creates a race to the bottom by countries competing solely to produce the cheapest product without regard to labor and environmental standards, or class divisions. Fair trade activists seek to give an equal voice to workers who do not have lobbyists advocating for their needs and concerns. Conservatives argue against free trade agreements as a threat to national sovereignty. They see free trade agreements as threats because they override national laws and subordinate the U.S. government to agreements with the World Trade Organization (WTO) and other foreign organizations.
A slowdown in negotiations under the General Agreement on Tariffs and Trade (GATT) under the WTO, has lead the U.S. to focus on bilateral and regional free trade agreements. In bilateral or regional free trade agreements, the U.S. has more power to negotiate against smaller economies and fewer chances of disagreement. In contrast, the U.S. is still continuing free trade negotiations under the WTO, with its 151 member nations, which began in 2000. These negotiations have largely stalled over disagreements on farm subsidies, and access to markets. Critics contend that U.S. emphasis on bilateral free trade agreements reduces pressure on larger groups of countries, such as in the WTO, to reach an agreement. Others argue that it may do the opposite and stimulate compromise based on other countries’ fears of being left out of the bargaining.
Lastly, since 9/11, security and immigration has played an increasing role in the free trade debate. Some are concerned that free trade encourages a level of immigration that the U.S. is incapable of handling. Some critics fear that the increase in immigration could bring with it the possibility of increased access for terrorists. Others are worried about the effect of increased immigration on economic security. Free trade proponents argue that the opposite will occur as more jobs are created in immigrants’ home countries.
Why Should I Care?
The effects of free trade may be subtle but are becoming increasingly noticeable. Whether it’s the growing number of fast-food chains you may see while traveling or the fair trade label on your morning coffee, free and fair trade is something every nation is being forced to handle. By taking an interest in free trade now we have an opportunity to dictate the effects of free trade on our job markets, national identities, the environment and human rights. Ignoring the situation allows these decisions to be made by business and the free market.
What Are the Candidates Saying?
Hillary Clinton
Hillary Clinton’s views on free trade appear to have shifted towards emphasizing a need for fair trade standards and enforcement. Historically, Clinton voted yes on free trade agreements with Oman, Singapore, Chile and Vietnam. She also voted yes on normalizing free trade relations with China, despite concerns over human rights. In 2005, she voted against the Central American Free Trade Agreement (CAFTA) and she joined legislation imposing trade sanctions on Chinese exports unless the government in Beijing agreed to stop devaluing the yuan. While campaigning in Ohio, Clinton criticized NAFTA and called for “a little timeout” on future trade deals. Clinton also announced in Ohio that she would not support a free trade deal with South Korea. Similarly to Obama, Clinton is calling for the end to tax breaks for outsourcing, an increase in the enforcement of existing trade agreements, and job training.
John McCain
John McCain has a strong pro-free trade voting record. As a Senator he has made 35 votes out of 40 opposing trade barriers. He does not believe that free trade should be used as a tool to address environmental concerns and to protect workers' rights. He does believe that free trade is a good foreign policy tool to opening “closed societies” in the Middle East. He supports a free trade agreement with any country that is not a security risk. McCain supported Bush’s plan to build a free trade area in the Middle East by 2013. He has voted in favor of free trade agreements with Singapore, Chile, the Andean nations, Vietnam, China, and the third world. He is also pro-NAFTA, pro-GATT and in favor of ‘fast track’ presidential trade authority. McCain is strongly against subsidies because they distort the economy. As a Senator he has made 8 votes out of 10 opposing trade subsidies.
Barack Obama
Senator Obama has a record of supporting free trade that is fair trade. Recently, however, along with Senator Clinton, Obama’s campaign rhetoric has been heavy in its emphasis on fair trade and its critiques of free trade. This is seen by many as a move to gain primary votes in key states like Ohio and Pennsylvania. The Senator recently suffered a set-back in his campaign, regarding the conflict between fair trade and free trade, when a memo was leaked from the Canadian government in which Mr Obama's top economic adviser was quoted as saying that “The primary campaign has been necessarily domestically focused, particularly in the Midwest, and that much of the rhetoric that may be perceived to be protectionist is more reflective of political maneuvering than policy." Despite this setback, Obama’s voting record shows his support for fair trade. Obama has voted against CAFTA for its lack of labor and environmental standards. He also supports amending NAFTA to include such standards. He has voted in favor of a free trade agreement with Oman. Obama also has put emphasis on supporting measures that deal with the negative effects of free trade in America rather than placing barriers to free trade. He supports reinvestment in communities burdened by globalization. He also supports the elimination of tax breaks for companies that outsource jobs and investing in job training.