2008: Trade Revisited?

Could this be the year trade actually becomes a deal-breaker in the Presidential election? According to a new poll from the Pew Research Center, most Americans oppose free trade agreements like NAFTA, and this position is dominant in how many American voters have been making decisions about the current roster of presidential candidates.

From the Pew Research Center:

48% said that free-trade agreements are a bad thing for the country, compared with 35% of the public who call them a good thing. This is up from an even 40%-40% split in November 2007 and from July 2004 when the results were reversed with 47% of respondents calling free-trade agreements positive, and 34% calling them negative.

48% of respondents said that free-trade agreements are having a negative impact on their personal financial situations, compared with just 27% who say it has helped.

52% of independents had a negative view of free-trade, compared to 50% of Democrats and 43% of Republicans.

The ever-controversial Farm Bill made its way back into the Op-Ed pages of the nation’s top newspapers today. In today’s New York Times, an editorial blames the American farm lobby for indirectly creating the worldwide food crisis by having a stranglehold on aid money that could be better used helping farmers in the developing world.

From The New York Times:

…Beyond the emergency aid, wealthy donors also need to do a lot more to help Africa and other developing countries increase food production. That will require assistance to develop agricultural markets and aid and credit for new technologies and seeds to boost yields. Providing cash to buy food locally would help stimulate farming in the countries that need it most.

Other rich nations are already working to untangle their international food aid from their domestic farm supports. Western Europe has provided all of its food aid in cash since the 1990s. The United States, however, still buys all of its aid from American farmers and then pays to ship the food overseas. This wastes millions on overhead and shipping costs, and farmers in the developing world are discouraged from investing by the competition with subsidized American food.

President Bush is asking Congress for an additional $770 million, which would boost American food aid to roughly $5 billion over the next two years. Congress should approve that assistance. Mr. Bush has said that up to a quarter of that aid should be given in cash. That is a start, but the percentages will need to grow.

The developing world needs to develop its own ability to feed itself. For that to happen, American farmers will have to be weaned from American food aid. ..

According to an article in today’s Wall Street Journal, Bush giving a veto to the “massive and bloated” $300 billion Farm Bill, might actually help with amending US relations with developing countries.

From The Wall Street Journal:

...There's another benefit to vetoing the farm bill: Reaching a Doha deal will help forestall efforts to turn, instead, to regional or single-country trade deals. These pacts blossomed in recent years – there are now more than 380 of them world-wide – and are billed as "free trade agreements." In fact they are preferential trade agreements.

Economists call them "trade diverting," and they tend to slice and dice the global trading system in ways that hamper the flow of global commerce. They also tend to hurt small countries and small companies, neither of which can compete as well in a complex network of single-country trade agreements as they can within a global trading system.

Ironically, the 150-plus member Doha deal is likely to get quicker approval in Congress than smaller and more controversial trade pacts, such as the FTAs with Colombia and South Korea which are now stalled...

Most importantly the last six US trade representatives have said they are for smoother Doha dealings of this nature. Will Bush and the other presidential candidates be so brave? Stay tuned.