Acton Commentary

Free Trade Advances Despite Politics


This week, the U.S. House of Representatives voted 215 to 214 to approve Trade Promotion Authority, or "fast track" trade negotiating authority, for President Bush. Earlier today, the Senate finance committee, moved the bill out of committee to the Senate floor. This legislation would allow the President to negotiate global trade treaties on a "take-it-or-leave-it" basis, no amendments allowed by the United States Congress. Recent Presidents have held this authority, but the provision expired in 1994.

To be sure, the freedom to engage in mutually beneficial exchange is an essential component of a just social order. There is an essential relationship between a free, open economy and a free and prosperous people. These people are then free to pursue a variety of creative solutions in meeting their neighbors' needs.

There is no doubt that this provision marks a major advance for the free trade agenda in the United States. Liberalized trade has been a top priority for this administration. In a speech this April, President Bush expressed his conviction concerning the power of free trade:

"Open trade fuels the engines of economic growth that create jobs and new income. It applies the power of markets to the needs of the poor. It spurs the process of economic and legal reform. It helps to dismantle the protectionist bureaucracies that stifle incentive and invite corruption. And open trade reinforces the habits of liberty that sustain democracy over the long term."

The recent vote of the House of Representatives on Trade Promotion Authority would seem to be one step in advancing the principles of liberalized trade articulated by President Bush. However positive this vote is for a liberalized trade agenda, it is important to note that no piece of legislation is perfect, including this one.

There is a cliché concerning the business of politics that applies to this vote: "all politics is local." The "fast track" bill passed by the House of Representatives is a perfect example of this perennial political reality at work. Supporters of free trade, no doubt, are puzzled at some of the deals cut by lawmakers to pass "fast track" legislation. Many of the compromises made are actually self-defeating blows to the expansion of free trade.

In order to pass congressional muster, the White House felt pressure to add some provisions that seem oddly out of place in a legislative provision that enshrines our national commitment to free and open markets. Two particular examples serve to illustrate this point. In a letter to Congressman Jim DeMint, R-SC, the White House promised to use "whatever means necessary" to cancel textile export preferences that Congress had previously granted the Caribbean, Central American, and Andean nations. Secondly, White House officials also sought to allay the concerns of a block of Florida lawmakers who were concerned that the "fast track" legislation would harm the domestic citrus market by increased competition with Brazilian citrus imports. No doubt, in agreeing to these provisions, lawmakers pursued protectionist policies to bolster textile manufactures and agricultural interests at home. Even in negotiating a central piece of the global free trade agenda, all politics are still local–very local.

The difficulty with attaching such protectionist agendas to the "fast track" legislation is that a central tenet of the legislation is gutted–its ability to aid the economic development of poorer nations through expanded trade. Poorer nations rely heavily on products like textiles and agricultural products for export and trade. These products serve as the foundation for economic development in developing nations that, by definition, do not possess the capacity or workforce to produce microchips, computers, automobiles, and other high-technology products.

Furthermore, such a protectionist agenda, which excludes trade partners in the developing world, denies an essential component of human dignity–a chance for people to work and contribute to their own well-being. If the workers in a developing nation have no market or cannot expand the market for the products they produce, many workers will be forced out of a job. Potentially, many more will not be able to enter the work force.

Protectionist policies squelch opportunities for productive work, yielding damaging effects to the inherent dignity of man, who is charged to be productive, creative, and contributive to the world in which he lives.

With the attachment of these protectionist provisions to the "fast track" legislation, lawmakers have effectively cut out many potential trading partners in developing nations. In turn, these policies will force U.S. consumers to pay higher prices for products and deny economic development and opportunity to nations sorely in need of expanded markets for their products. This is certainly at odds with President Bush’s stated goal of liberalizing trade in order that the power of markets may be applied to the needs of the poor.

Caveats said, the Trade Promotion Authority legislation is a solid first step in expanding the free trade agenda. The imperfections of this bill, while serious, do not outweigh the usefulness of this particular piece of legislation. It is an important first step in the effort to expand free trade and open markets around the globe, but it is just that–a first step. It is clear that protectionist policies for homegrown interests still command a powerful voice in our nation’s trade policy. No doubt, many lawmakers understand such policies as the "price of doing business." This is a price, however, that will be born out in higher costs for consumers and the exclusion of developing countries as trading partners. A high price, indeed.