Who are the free traders?
Paul Krugman has an odd column today, suggesting that if you are a free trader, the Democrats are historically a better bet for you. He writes,
When I say that Republicans have been more protectionist than Democrats, I’m not talking about the distant past, about the high-tariff policies of the Gilded Age; I’m talking about modern Republican presidents, like Ronald Reagan and George W. Bush. Reagan, after all, imposed an import quota on automobiles that ended up costing consumers billions of dollars. And Mr. Bush imposed tariffs on steel that were in clear violation of international agreements, only to back down after the European Union threatened to impose retaliatory sanctions.
Actually, the latter episode should be an object lesson for anyone talking tough about trade. The Bush administration suffered from a bad case of superpower delusion, a belief that America could dictate events throughout the world. The falseness of that belief was most spectacularly demonstrated by the debacle in Iraq. But the reckoning came even sooner on trade, an area where other players, Europe in particular, have just as much power as we do.
This narrative ignores some inconvenient evidence to the contrary, such as the fact that in 1993 a majority of Democrats in Congress voted against NAFTA, while a majority of Republicans voted in favor.
But what really caught my eye is how wrong Paul is about the Bush steel tariffs. I was there for part of this episode, so I am confident that his interpretation--that President Bush was a protectionist--is completely backwards.
President Bush wanted to get Trade Promotion Authority (aka Fast Track) to negotiate future trade deals. It was, however, a hard sell in Congress. The steel tariffs were imposed as a quid pro quo to get a few of the votes needed to pass TPA. The political calculation was that it was worth suffering a small, temporary trade restriction to get the tools needed for a broader, more permanent opening up of trade.
Yes, after about a year and a half, the tariffs were found to have violated international trade rules, but that was always anticipated. Indeed, one can say that it was part of the plan. When the WTO ruling was announced, President Bush happily removed the tariffs, just as he had always intended.
The trade promotion authority that this political calculation yielded pushed the free trade agenda forward. It led, for example, to CAFTA. When this trade agreement came up for a vote in 2005, once again a majority of Democrats in Congress voted against, while a majority of Republicans voted in favor.
But what really caught my eye is how wrong Paul is about the Bush steel tariffs. I was there for part of this episode, so I am confident that his interpretation--that President Bush was a protectionist--is completely backwards.
President Bush wanted to get Trade Promotion Authority (aka Fast Track) to negotiate future trade deals. It was, however, a hard sell in Congress. The steel tariffs were imposed as a quid pro quo to get a few of the votes needed to pass TPA. The political calculation was that it was worth suffering a small, temporary trade restriction to get the tools needed for a broader, more permanent opening up of trade.
Yes, after about a year and a half, the tariffs were found to have violated international trade rules, but that was always anticipated. Indeed, one can say that it was part of the plan. When the WTO ruling was announced, President Bush happily removed the tariffs, just as he had always intended.
The trade promotion authority that this political calculation yielded pushed the free trade agenda forward. It led, for example, to CAFTA. When this trade agreement came up for a vote in 2005, once again a majority of Democrats in Congress voted against, while a majority of Republicans voted in favor.
