New US president unlikely to liberalize trade
A US economics columnist advises anyone against hoping for a climate of liberalized trade, just because Barack Obama is about to move into the Oval Office. But sudden protectionism isn not likely to be an issue, either.
December 31, 2008 By Delta Farm Press
December 31, 2008
A more liberalized international trade policy likely will not be an Obama administration priority in his first year in office. But protectionism is not expected either.
Other issues will take precedence early in Obama’s tenure, said Bruce Stokes, National Journal International Economics columnist; fellow, German Marshall Fund; and fellow, Pew Research Center.
“We are a long way from protectionism,” Stokes told the audience of mostly international cotton buyers and sellers at the Sourcing USA Summit in Austin, Texas. “But we have to guard against it.”
He said during the recent presidential campaign Republicans accused Democrats of protectionist policies. He also said president-elect Obama was “more critical of trade than any candidate in generations. But I’m not certain his criticisms are anti-trade.”
Stokes said Obama at one time said he wanted to renegotiate NAFTA and opposed the Columbia and Korea free trade agreements. He also supports pressuring China to strengthen its currency and stronger enforcement of US trade laws. He suggested ending tax advantages for companies operating overseas.
Stokes said candidate Obama pledged to “end tax advantages that helped move jobs out of the United States. It will be interesting to see how the new tax bill next year will treat profits of multi-national corporations.”
US consumers are not high on more liberalized trade, either, Stokes said. In fact, most view trade as a negative for the U.S. economy. Stokes said U.S. consumer support for trade has fallen 25 percent since 2002. Support for free trade agreements also dropped from 47 percent in 1997 to 35 percent in 2008.
“A plurality now opposes FTAs,” Stokes said. “The majority of Americans believe trade equals job losses. They believe trade has an adverse impact on wages and believe they have seen a stagnation of wages because of globalization. There is probably some connection,” he said.
He said voters don’t see trade as a positive impact on prices. “They think trade raises prices, but they shop at Wal-Mart.”
Only three to four percent of Americans view trade as a primary concern. “That’s about the same number that believes in space aliens,” Stokes said.
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