Why the Dems love free trade.

Who's winning, who's losing, and why.
March 20 2002 5:14 PM

Trading Places

If you love free trade, elect a Democratic president.

George W. Bush is prone to strange syntax and mangled pronunciations, but on the subject of free trade his views are crystal clear: He's for it. "Free trade is an important engine of economic growth and a cornerstone of my economic agenda," he asserted recently, bragging, "My administration has successfully launched new global trade talks, reignited the movement for free trade within our own hemisphere, and helped bring China and Taiwan into the World Trade Organization."

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In contrast, Bill Clinton—an exceptionally persuasive public speaker—often sounded wooden and ambivalent on the merits of international commerce. Forced to take a position on the North American Free Trade Agreement during the 1992 campaign, he offered a lukewarm endorsement, a tactic that ended up giving more encouragement to NAFTA's foes than to its friends. He vowed to get tough on Japan's allegedly unfair trading practices and promised to impose trade sanctions to protest human rights violations in China. His speech in Seattle at the 1999 WTO meeting sounded so sympathetic to anti-WTO forces that it effectively scuttled talks on a new round of negotiations.

But these two presidents have one important thing in common when it comes to trade: Their policies are a stranger to their rhetoric. Organized labor and various interests that prefer to hide behind tall, sturdy trade barriers had grounds to hope that Clinton would come to their aid. Those who oppose import restrictions thought Bush a good bet to try to knock them down wherever possible. Both groups set themselves up for bitter disappointment.

Whatever his efforts to mollify the AFL-CIO, Clinton did more to advance the cause of free trade than any president in the postwar era. He pushed NAFTA through Congress over the objections of most Democrats on Capitol Hill, largely ignored the trade deficit with Japan, and not only reversed course on China's most-favored-nation trade status but forged a market-opening agreement to admit Beijing to the WTO.

Bush, on the other hand, has so far been a force for protectionism—most conspicuously this month, when he caved in to steel-makers and workers by imposing tariffs averaging 30 percent on steel imports. The protection the industry got from Bush is the same protection rejected by Clinton—even though Clinton had to confront the issue at a time when imports were soaring, whereas Bush acted after the surge had passed. His one notable step forward, getting the House to vote to restore the negotiating authority on trade issues once known as "fast track" (which was denied Clinton), came only after he made a step backward by agreeing to new restrictions on imports of apparel, thereby continuing a tradition of sheltering the industry.

Republicans and Democrats usually divide predictably on free trade, with the former generally supporting it and the latter skeptical at best. When Congress passed NAFTA in 1993, 76 percent of House Republicans voted yes, compared to only 40 percent of Democrats. So, it's not surprising to find that in the White House the parties also diverge. The surprise is that they usually contradict their own party's established position. If you want a president who'll promote free trade, in other words, your best bet is a Democrat. Hard-core protectionists can expect more help from Republicans.

Bush and Clinton are only the latest illustration of this paradox. "Ronald Reagan's rhetoric on trade was about as good as you can imagine," says economist William Niskanen of the Cato Institute, "but his record on trade was terrible." Niskanen should know, having served as chairman of Reagan's council of economic advisers. Reagan imposed quotas on steel imports, pressured Japan to "voluntarily" restrict auto shipments to the United States, tightened limits on foreign textiles, accepted new barriers to imported sugar, gave special protection to Harley-Davidson, raised duties on shakes and shingles, and negotiated a deal with Japan to force up domestic semiconductor prices. "For the first time since World War II," noted Niskanen in his 1988 book Reaganomics, "the United States added more trade restraints than it removed." To find an administration with a worse record on free trade, you have to go back to another Republican—Herbert Hoover.

Jimmy Carter is derided by conservatives as a wimp, but when it came to protectionist demands, he showed more courage than the Gipper—standing up to the auto industry, for example, when it demanded that he shut off the flow of Japanese imports. One of President Kennedy's biggest achievements was launching a successful round of negotiations—ultimately named after him—to dismantle trade barriers around the world under the General Agreement on Tariffs and Trade. President Nixon, by contrast, did things like put a 10 percent surcharge on all imports. The first President Bush had a mixed record, negotiating NAFTA but renewing voluntary restraint agreements on steel (though he later declined to renew them again).

Why is it that presidents confound reasonable expectations of what they will do on trade? One reason is that one impulse may be overriding another. Republicans are generally unilateralist in foreign affairs, and there is nothing more tediously multilateral than negotiations to remove impediments to the flow of commerce across national boundaries. In much of the rest of the world, Bush's steel protection plan was interpreted as just another instance of America arrogantly doing whatever it pleases. Democrats are more comfortable with the business of give-and-take among sovereign nations. It's a way of showing their desire for international harmony without the risk of looking soft on security issues.

Politics also often pushes presidents to suppress their ideological inclinations. In politics, as in much of life, you always want what you haven't got. "It's the ancient political game of playing the margins," says presidential historian Richard Norton Smith. Bush capitulated on steel because he hopes to swing enough voters in steel-producing states that he narrowly lost or won in 2000 (notably West Virginia and Pennsylvania) to boost his chances the next time around. The steel concessions also help to demonstrate that he's a compassionate conservative who cares about working folks. Clinton lobbied hard for NAFTA largely to show he was indeed a new kind of Democrat—neither hostile to business nor a captive of labor unions. Reagan had most of the hard-core free traders on his side from the start, and they weren't about to defect to Walter Mondale just because Reagan proved impure. Playing to type keeps voters you've already got—but playing against type can add new voters without driving off the old ones.

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