Friday, October 25, 2002

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THE DEFENSE OF BUSH'S FOREIGN ECONOMIC POLICY: I have railed against the protectionist elements in the Bush administration's trade policies in the past. It seems only fair to highlight a cogent defense of those policies. C. Fred Bergsten points out in the latest Foreign Affairs that all administrations need to buy off significant protectionist groups to pursue freer trade. You have to pay to access the entire article, but here's the key point about why the administration has raised steel tariffs and blimped up farm subsidies:

"None of these steps is defensible on its merits. All of them, in fact, represent extremely bad policies. Most of them were directly related to electoral politics. But they were also essential components of restoring an effective U.S. trade policy.... History reveals that such domestic maneuvering is a sad but true constant of U.S. trade policy. Every president who has wanted to obtain the domestic authority to conduct new international liberalizing negotiations has had to make concessions to the chief protectionist interests of the day. The entire history of U.S. postwar trade policy can be characterized as 'one step backward, two steps forward.'"

If you don't want to pay, Jeffrey Schott, Bergsten's colleague at the Institute for International Economics, makes similar points in this speech.

So, do I take back what I said? No. The way to minimize the protectionist deals that Bergesten and Schott defend is to link U.S. foreign economic policies to our grand strategy. In the late 1940's, the Truman administration was able to push through a series of integrationist policies by correctly pointing out how such policies bolstered allies and assisted in the containment of the Soviet Union. The current administration has failed to make the same strategic link between today's global war on terror and the need for the advanced industrialized states to open up their economies to developing countries. [Didn't Bob Zoellick make this argument in a Washington Post op-ed?--ed. Yes, but after the op-ed there was silence, even when Congressional Democrats attacked Zoellick for linking trade policy to the war on terror. This message needs to come not just from Zoellick, but from O'Neill, Powell, Rice -- and most important, Bush himself.]

posted by Dan on 10.25.02 at 10:20 AM