On Monday, the Wall Street Journal carried a story on the roll of trade in the campaigns, written by Greg Hitt: Protectionist Stance Is Gaining Clout (Nov 6 - apparently free content). Hitt hung his story on a House campaign in Iowa between Democrat Bruce Braley...
...Mr. Braley has made opposition to the Bush administration's free-trade agenda a centerpiece of his campaign. He has run ads blaming the state's job losses on Presidetn Bush's "unfair trade deals." He has urged more focus on labor rights in national trade policy and talked of using economic sanctions to keep American competitive. "Our workers aren't on a level playing field," he says.
and Republican Mike Whalen who says Braley lives in a "protectionist fantasyland"...
Mr. Whalen's radio ad alleged Mr. Braley's approach would harm Iowa farmers and manufacturers who depend on exports. He pointed to the Alcoa Inc. plant in Davenport, where 2,000 workers make aviation parts for Boeing Co. and Airbus. "Without international trade, those Iowa jobs would be gone," Mr. Whalen, who toured the plant in mid-September, said in his ad.
Braley won. Ed Tibbetts reports for the Quad-City Times (Braley win caps 2-year quest, Nov 8),
With 89 percent of the vote counted, Braley had 104,676 votes, or 55 percent, with Whalen receiving 81,072, or 43 percent, according to the unofficial tally.
Jonathan Dingel doesn't think the mid-terms matter much - trade promotion authority renewal and Doha weren't going anywhere no matter who came out ahead: The US Election & Trade (Trade Diversion, Nov 8). A good post.
Daniel Drezner takes a look at foreign financial market reactions: Nancy Pelosi's impact on the global economy (Daniel W. Drezner, Nov 8). Financial markets, and Asian analysts, diplomats, and economists, are uneasy.
A victory for economic populism, or economic nationalism: Populism vs. Nationalism (Economist's View, Mark Thoma, Nov 8)
Oh dear God... they're The Lou Dobbs Democrats (Greg Mankiw's Blog, Nov 8).
The Koreans are watching and wondering what it means: Korea Watching Closely as Democrats Win U.S. Midterms (Digital Chosun Ilbo, Nov 9):
The Democrats could also get in the way of the planned free trade agreement between the two countries. They are less free-trade friendly than the Republicans, and a Democratic Senate would be unlikely to renew the Bush administration¡¯s fast-track authority for trade deals when it expires next year. Experts say that will make it virtually impossible to draw out the negotiations. Even if they are concluded, there could be problems with ratification in Congress. Pelosi earlier warned publicly against Congress members who oppose the bilateral FTA.
Deborah Solomon and Michael Phillips review the Democratic agenda in the Wall Street Journal (Nov 9):
Rep. Charles Rangel, the New York Democrat who is expected to become chairman of the tax-writing House Ways and Means Committee, cites "ending tax shelters for companies that move American jobs overseas" as one of his main objectives. He is also expected to complicate the White House's efforts to further liberalize trade by demanding strong protections for labor in any trade deals...
On the trade front, businesses face the growing threat of protectionism. Several victorious Democrats campaigned as trade skeptics, arguing that U.S. manufacturers are being battered unfairly by companies in China and other low-wage countries with weaker environmental and labor protections. Trade watchers on both sides of the issue say President Bush will have a tough time winning a free hand from Congress to negotiate trade accords. The president's "fast track" authority -- under which Congress has to vote up or down on trade agreements, forgoing amendments -- expires in July, and a Democrat-led House is less likely to grant him such sweeping powers again...
U.S. trading partners are reluctant to negotiate new trade accords if they think Congress will change the terms before ratifying them, and the current Doha round of global trade talks is already considered to be in deep trouble...
The trade debate is particularly heated when it comes to China, with its fast-growing export industries. Lawmakers could take steps to press China to improve its enforcement of intellectual-property rights and other trade rules. Yesterday, Mr. Rangel, the New York Democrat, said the U.S. needs to "be angry as hell and try to protect American industry....We have to protect American jobs and American manufacturers."
Robert Portman, the former U.S. Trade Representative who now heads the White House budget office, says the Democrats could create "a real nervousness among people who invest in and look at our economy closely. The trade dynamic has been very good. Export-driven growth is important, and if we're not knocking down barriers to trade that's a concern."
More in the same vein from Jacob Weisberg, who is worried about economic nationalism: A poll victory for economic nationalism (Financial Times, Nov 8). Weisberg highlights some Senate races:
The most prominent nationalist candidate this year was Sherrod Brown, who unseated incumbent Senator Mike DeWine in Ohio, a state that has lost 200,000 manufacturing jobs since George W. Bush became president. Mr Brown is the author of a book called Myths of Free Trade: Why American Trade Policy Has Failed. Here is a snippet from one of his television advertisements: “Sherrod Brown stood up to the president of his own party to protect American jobs, fighting against the Mexico and China trade deals that sent countless jobs oversees.” For some reason, economic nationalists never seem to complain about job-killing Dutch or Irish competition. The targets of their anger are consistently China and Mexico, with occasional whacks at Dubai, Oman, Peru and Vietnam.
One heard similar themes in the other pivotal Senate races. In Virginia, apparent winner James Webb denounced outsourcing and blasted Republican George Allen for voting to allow more “foreign guest workers” into the state. In Missouri, victor Claire McCaskill refused to let incumbent Senator James Talent out-hawk her on immigration. “Unfair trade agreements have sent good American jobs packing, hurting Missouri workers and communities,” she said in one of her adverts. “We should be encouraging businesses to stay at home, not rewarding them for moving overseas.” In Michigan, vulnerable Democratic incumbent Deborah Stabenow survived while promising to set up a federal office to prosecute unfair trade by foreign governments.
Doug Palmer reports on speculation for Reuters: Elections raise new trade challenges for Bush (Nov 8), and at TurkishPress.com: Bush's trade agenda in question after Democratic win (Nov 8).
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