Tuesday, October 9, 2007

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Hillary Clinton really wants to improve America's standing abroad

Last week I asked which major party was going to be more trade-friendly.

Yesterday, Hillary Clinton provided part of the answer. The Financial Times' Edward Luce summarizes:

Hillary Clinton, frontrunner for the Democratic party’s presidential nomination, on Monday said that all US trade agreements should be evaluated every five years and, if necessary, amended.

The process should start with the North America Free Trade Agreement, which was the signature trade pact of her husband, Bill Clinton, when he was president.

The comments, which were aimed at union leaders who remain critical of Nafta, which they say has displaced US workers, amount to her strongest break so far with Mr Clinton’s pro-free trade agenda of the 1990s.

Mrs Clinton said Nafta suffered from “serious shortcomings”. She also reiterated her pledge to incorporate strong environmental and labour protections in future trade deals – a measure most economists view as protectionist.

“I think it is time that we assess trade agreements every five years to make sure they’re meeting their goals or to make adjustments if they are not,” she said in a speech in Cedar Rapids, Iowa, which stages the first caucus vote in the presidential nomination process next January. “And we should start by doing that with Nafta.”....

In addition to the five-year trade reviews, Mrs Clinton said she would appoint a federal trade enforcement officer who would monitor compliance with trade agreements.

Click here for more details (it's not all bad; the proposal to expand trade adjustment assistance to cover service-sector workers makes sense). For a party that claims it wants to burnish America's image abroad, the Democrats sure know how to propose specific steps that will piss off our trading partners.

Seriously, if this kind of review is proposed, what incentive would any country have to sign an FTA with the United States? The major benefit of a free-trade agreement with the United States is less economic than political. An FTA increases the certainty of the bilateral relationship. Clinton's "review process" essentially strips away that certainty.

Does Hillary Clinton really want to return Mexican-American relations to the bad old pre-NAFTA days?

As for a "trade enforcement officer," this is the trade equivalent of Michael Dukakis' pledge from 1988 to balance the federal budget deficit through improved tax collection. It's nice politics, but it ain't going to mean a damn thing in terms of reducing the trade deficit or protecting American jobs.

Look, trade expansion does have distributional effects, and it makes sense to expand programs that try to compensate for those effects. Clinton's ham-handed idea is not the answer, however. This will play great on the hustings and contribute to an eroding image of the United States abroad.

Clinton should -- and does -- know better.

posted by Dan on 10.09.07 at 08:54 AM


So the fact that Sen. Clinton is somehow connected to reality is a negative? She doesn't parrot the party line and therefore will wreck out international reputation?

(Geez, a conservative Republican defending Hillary, what a shock.)

On a slightly related note, the GOP candidate debate in Michigan is coming up fast. Michigan has been in a recession for six consequtive years, and some of the fastest growing companies are "factory dismantlers."

It will be interesting to hear whatever kind of dittohead nonsense about tax cuts saving Michigan we get from the candidates.

I am pleased that Prof. Drezner acknowleges distributional impacts of increased trade.

posted by: save_the_rustbelt on 10.09.07 at 08:54 AM [permalink]

I don't understand why this is so bad. Drezner says that trade agreements are about "certainty." We know that policymakers don't plan far into the future anyway, so a 5-year window after which an agreement can be reviewed seems very reasonable.

Dan, you ask "what incentive would any country have to sign an FTA with the United States?" What nation wouldn't? Granted, you're an IR scholar and I'm not, but can you make a reasoned argument why this would seriously curtail a nation's desire to trade with one of the world's biggest economies?

I'd be glad to hear a real discussion of why these elements are so bad.

posted by: Arr-squared on 10.09.07 at 08:54 AM [permalink]

An interesting proposal from the putative Democratic Presidential nominee, but I don't think it goes far enough. In my opinion all government programs should be reevaluated every five years to determine if they warrant continuation. Then citizens could be relieved of the burden of supporting those which have failed or outlived their usefulness.

posted by: Mactavish on 10.09.07 at 08:54 AM [permalink]

When Democratic pols say "abroad" what they mean is "France" or "mid-East countries that already hate the US." They don't refer to Canada and Mexico as being "abroad."

Mactavish:--rat own, rat own, rat own...I remember when Ronnie O'Reagan said he would dismantle the Department of Energy everyone scoffed, but darned if he didn't do it!

posted by: Useless Sam Grant on 10.09.07 at 08:54 AM [permalink]

What does she mean by "make adjustments?" We can't unilaterally make adjustments to agreements we sign with other countries any more than I can unilaterally make adjustments to my auto insurance policy. I agree with you, she knows better than that.

posted by: nodakdude on 10.09.07 at 08:54 AM [permalink]

I'm wondering how Dan knows Sen. Clinton knows better, or why he thinks that a position that plays "great on the hustings" but represents unworkable policy would for that reason be unattractive to her.

posted by: Zathras on 10.09.07 at 08:54 AM [permalink]

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