Friday, March 28, 2008

Barack Obama: Semi-Free Trader

When talking to skeptical libertarians about Barack Obama, one of the first criticisms I usually hear is that Obama is a "protectionist" on trade issues. Obama isn't a total free trader, but I completely reject applying the P-word to him. Obama's actual trade policy - like almost all of his positions - defies such simple labels in favor of nuance. Trade issues may not win Obama any libertarian fans, but I don't believe that he's nearly bad enough on the issue to negate all of the other points in his favor.

Connsider that Obama voted for free trade with Peru and Oman, while rejecting the Central American Free Trade Agreement. So what was the difference? Obama has said that he will support free trade with Central American countries if environmental and labor protections are included in the treaties. That's not the position of someone who believes in an unfettered free market. But it also doesn't make Obama a "fair weather free trader," as the Weekly Standard called him.

But what of Obama's plan to withdraw from NAFTA? There is no such plan. Obama blasted NAFTA to factory workers in Ohio earlier this month for the jobs that it has destroyed (it would be nice if he talked more about the jobs it created, but consider the audience). But the harshest policy proposal he has made is a plan to amend the agreement to include more environmental and labor protections.

In fact, one of the central planks in Obama's trade policy is to press the World Trade Organization to press foreign countires honor their commitments and stop giving out unfair subsidies. He has also called for America to reduce its agriculture subsidies. John Edwards-style populism this is not.

As I understand it, Obama's various positions and statements on trade can be summarized thusly: Trade is good for America and good for the world. But some people are hurt by free trade, and the government should help them through retraining and income support. The United States should also tread carefully as it moves toward free trade, making sure that trade agreements contain environmental and labor protections, and that other countries abide by their free trade commitments. We can not and should not stop globalization, but there is a role for government in smoothing over its rough edges.

As The Economist - itself a stalwart champion of free trade - notes:

Mr Obama understands economics better than he lets on. In his book “The Audacity of Hope”, he recognises that a tariff on imported steel may provide temporary relief to American steelmakers, but it will also make every American manufacturer that uses steel, from carmakers to housebuilders, less competitive. When put on the spot and asked whether he would repeal NAFTA, he says that would cause more job losses than gains.

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