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Press Release

    Good Morning Vietnam, But Farewell to Free Trade?

    Free trade, which drives economic growth and has been a bedrock American principle since the end of the Second World War, may be coming under attack in the next Congress.  The first sign of trouble came just one week after the most recent elections, when a lame-duck session of the House of Representatives temporarily blocked a measure that would have granted “permanent normal trade relations” to Vietnam in advance of President Bush’s recent trip to Hanoi. 

    Congressional Democrats, led by Michigan Congressman Sandy Levin, followed this defeat by sending a letter to President Bush pledging to block pending trade deals with Colombia and Peru as well.  While a protectionist vote from a congressman who represents the Big Three automakers isn’t that surprising, what is unusual is the extent to which so many others in Congress are ready to follow his lead. 

    It seems like only yesterday that President Clinton set the Democratic Party’s course on the issue once and for all with his staunch support of the North American Free Trade Agreement with Mexico and Canada.  Now, even a gradual disengagement from the global trading regime would be an ironic accomplishment for a party that has consistently criticized the Bush administration for being “too unilateral” in its approach to foreign affairs.

    Opposition to free trade is based on nostalgia or special interest politics, not sound economic practice.  The world is no longer as straightforward as it once was, when a high school graduate could get a job “at the plant” and count on things staying more or less the same until he retired.  But free trade is, overall, good for America.  It raises our standard of living, attracts investment that spurs long-term economic growth and creates better jobs.  Because these benefits do not accrue equally to all Americans, our government provides training and employment assistance for those who lose their jobs.

    American living standards have improved dramatically in the past 50 years, a point that is sometimes lost by those who just look at prevailing wage levels.  Technological advances in medicine, computers and other areas have played an important role, but so has free trade, which allows us to buy affordable coffee from Central America, clothes from the Caribbean and a PlayStation 3 from Japan (if perhaps only on eBay). 

    The Vietnam agreement is a perfect example of how free trade benefits us.  Vietnam is joining the World Trade Organization.  Besides opening up that country’s market to American exports, these two agreements would also require Vietnam to stop intellectual property thieves who pirate American software and DVDs.  Vietnam is a young, growing country, and it is an important strategic buffer to China.  Bringing Vietnam into the WTO is a good deal for the United States, and it was surprising to see the opposition in Congress this month. 

    Some members who voted against the agreement simply did not want to hand the President a victory before he went to Vietnam, once again disproving that the quaint notion that politics stops at the water’s edge.  Fortunately, Congress was able to come back and pass the bill in mid-December. 

    Bigger battles loom down the road.  Other important trade deals, negotiated with our Latin American allies Columbia and Peru,  face uncertain futures.  Next summer, President Bush’s “fast-track” authority for trade bills will expire.  This provision means that the president can negotiate trade agreements with the understanding that Congress can only approve or disapprove the whole package without offering amendments.  Without this authority, it becomes far more difficult for any administration to negotiate with other countries, since no deal is truly “final” until the last amendment is defeated. 

    A number of new Democrats in Congress ran campaigns that relied on protectionist themes.  As these individuals arrive in Washington in January, the battle over free trade, and our long-term economic prosperity, will just be heating up.  Let’s hope that the bumpy road for the Vietnam trade deal was just election-year politics and not the beginning of a new era of American isolationism.