Trade in the North Carolina Senate Race: Dole v Hagan

In North Carolina incumbent Republican Elizabeth Dole is being hard pressed by Democratic State Senator Kay Hagan.  Rasmussen polling puts Hagan just in front of Dole in this tight race (Election 2008: North Carolina Senate):

The latest Rasmussen Reports telephone survey in North Carolina finds Democratic challenger Kay Hagan with 48% of the vote and the incumbent United States Senator Elizabeth Dole three points behind with 45%.

That’s a slight improvement for Dole who trailed by six just a few days ago, but it’s never comfortable for an incumbent to be trailing this late in the campaign season.

It doesn't help Dole that Obama is running well in North Carolina.

Dole has only been in the Senate since 2003.  She only has a 50% score on the Cato trade barriers index (although this index only appears to cover her record since 2005), and appears to be enthusiastic about subsidies (in the Cato figure below the higher an "X" the greater the opposition to subsidies, the further an  "X" is to the right the greater the opposition to trade barriers):

Dole's campaign website trade statements are here: Promoting a Stronger Economy for North Carolina.  Her accomplishments include:

Protecting and Promoting North Carolina Industries/Jobs Elizabeth has worked hard to protect and promote North Carolina industries and jobs. She has worked to make sure other nations stop cheating on trade deals – including illegal transshipments that unfairly harm our industries. Elizabeth has also worked for fairer trade agreements that promote North Carolina jobs and products. Among other items, Elizabeth has:

• Secured $9.5 million for U.S. Customs to oversee textile transshipments enforcement in the fiscal year 2008 Homeland Security spending bill. Total amount Elizabeth has secured for this effort is $57 million.

• Supported Peru Free Trade Agreement, which is expected to increase North Carolina exports in sectors such as agriculture, textiles and other manufacturing industries.

• Secured hard-fought concessions in trade agreements such as DR-CAFTA and Vietnam to make the treaties better for North Carolina industries.

• Supported the DR-CAFTA agreement that strengthens North Carolina exports in many industries, creating new jobs and saving existing jobs. This region was the second largest market for North Carolina manufacturing, agriculture and textile products in 2006, with more than $1.8 billion in exports. Since the agreement, North Carolina exports to Central America rose 16% for knit apparel; 30% for manmade staple fibers; 36% for cotton and yarn/fabrics; and 74% for manmade filament/fabrics. North Carolina exports to DR-CAFTA some of the fastest export growth to any market in the world — from any state in the United States.

• Supported textile industry’s efforts to impose China safeguards and successfully pressed the Administration to self-initiate import restrains, so the government need not wait for industry before taking action, ensuring faster responses to new developments. Actions led to a comprehensive textile agreement with China through 2008 that is strongly supported by the majority of the textile industry.

  National Council of Textile Organizations (NCTO): Elizabeth’s action on China Safeguards “helped preserve more textile jobs in North Carolina than any other action that the Senator could have taken.”

• Successfully urged the Commerce Department to release import trade data on a biweekly basis so that the China safeguard mechanism can be used effectively.

• Authored measure directing the Department of Defense to better train personnel on the Berry Amendment which requires DOD to give preference to domestically produced, manufactured, or home grown products. U.S. textile industry provides more than 8,000 products to U.S. military and business supports tens of thousands of North Carolina jobs.

Secured $2 million overall for textile tracer initiative, which would mark legal goods and keep out illegally smuggled textiles.

Dole touched on trade in this May 2007 speech to the North Carolina Chamber of Commerce: Dole Addresses North Carolina Chamber's Manufacturing Council Summit.  Efforts to bring anti-dumping cases don't show up in the Cato index.  Dole worked hard to bring an anti-dumping case against Chinese furniture: North Carolina Must Stop Illegal Furniture Dumping by China.  In October 2003 she described her efforts to pressure China to revalue its currency ("But you know, many of North Carolina’s economic woes related to manufacturing can be summed up in one word: China."): Remarks to the North Carolina League of Municipalities.  Dole voted for CAFTA-DR, but not after doing a lot of work to make it palatable to North Carolina textile interests.  She described her efforts in 2005 (CAFTA will expand opportunities):

Much work was undertaken on behalf of the textile industry to address concerns with the agreement, and now CAFTA enjoys wide, if not universal, industry support. Of particular concern was the rule of origin for non-visible pocketing and linings. In its current form, CAFTA allows non-visible pocketing and linings to be sourced from anywhere in the world, including China, while visible linings must be sourced regionally.
 

I raised this with the administration, and U.S. Trade Representative Rob Portman gave me a commitment: His office will seek an amendment clarifying that pocketing would have to originate in one of the CAFTA countries, including the U.S. Under the Caribbean Basin Initiative, which covers CAFTA countries, U.S. textile companies ship approximately $100 million in pocketing and lining fabric to the region annually, a significant business for North Carolina companies. This amendment is critical to helping save North Carolina textile jobs.

At my urging, the administration pressed Nicaragua to address concerns that it would interpret a provision to allow Chinese fabric to enter the U.S. through Nicaragua in competition with fabric from U.S. textile manufacturers. The administration obtained a guarantee from Nicaragua that it would not interpret the provision in a manner harmful to U.S. fabric manufacturers. I also pushed for an agreement with Mexico to improve transshipment enforcement provisions to prevent Chinese fabrics from being substituted for Mexican or American fabric. Mexico agreed to improve its transshipment enforcement. These successful changes, supported by the majority of the textile industry, significantly weighed in my decision to support CAFTA.

These, and earlier successes, are key to the industry's future. I have successfully secured funding for - and pressed the Department of Homeland Security to hire - customs agents assigned to keep out illegal textiles. Additionally, the Commerce Department agreed to my request to expedite the release of import trade data so the China safeguard mechanism is used effectively. The recent decision to use the China safeguard mechanism demonstrates the administration's willingness to use enforcement mechanisms in agreements like CAFTA.

Greg Hitt of the Wall Street Journal reports (China-Trade Issue Thrust Into Races as Vote Nears):

In mid-September, Sen. Dole, who is facing an unexpectedly difficult battle for re-election, wrote the White House urging steps be taken to ensure U.S. textile producers and workers "not be put in harm's way" once the limits on Chinese imports expire. She complained China has increased its subsidies for textile producers.

In response, President George W. Bush's trade ambassador, Susan Schwab, said the administration intensified its study of the issue. In a letter sent last week to Sen. Dole, Ms. Schwab said China has been put on notice about U.S. concerns that Chinese textile producers are receiving unfair subsidies. Ms. Schwab said she wrote China's commerce minister "expressing concern about potential WTO-illegal subsidies," and warning the U.S. would consider filing a complaint at the World Trade Organization "if China does not act promptly to eliminate them."

Hagan's position on trade is here: Hagan: Making Trade Work for North Carolina.  Hagan proposes:

• Leads off with a paragraph on the benefits of trade - if it is "done right." This is an interesting paragraph, focusing on the dynamic benefits of trade as an engine of growth, an antidote for complacency and market power, and a source of new ideas.  It does not mention the more traditional comparative advantage argument. 
• But the next paragraph swings into populist mode - trade agreements "have been written to pull down wages and working conditions..."   Corporate profits, CEO pay vs impacts on ordinary North Carolinians, etc.  But the paragraph ends up with a recognition that the benefits are widespread and costs concentrated.
• The next paragraph builds on the last and talks about the need to create trade agreements that distribute benefits more widely.
• Trade policy must be built on two principles: (1) accountability - fair, accountable to the people, and designed to raise incomes of ordinary people; (2) Nation must  be competitive.  Here are the measures she think we should take:
• • Future trade agreements to include enforceable labor and environmental protections to prevent offshoring - does this mean bringing standards in other countries up to our own?  Or something else?
  • More focus and resources placed on enforcement of provisions in trade agreements.  To this end she would move enforcement actions from the USTR to the Department of Justice, creating a post of Deputy Attorney General for Trade Enforcement.
  • Extend and expand the existing trade adjustment assistance program, for example, extending it to cover service jobs.
  • close tax loopholes that give companies incentives to export jobs
  • increase government investment in R&D, make R&D tax credit permanent, reverse funding cuts to National Science Foundation and National Institutes of Health
  • tax credits to support process converting neat research ideas into products; creation of small business incubators.
  • speed nation-wide rollout of high speed broadband access - particularly to rural areas
  • support development of renewable energy: on the one hand, there will be tremendous world-wide demand for this generating U.S. exports, on the other, its hard to outsource jobs installing solar panels in North Carolina - doesn't sound like she will be in favor of mode-4 service reform
  • Education: fix no-child left behind to emphasize balanced curricula and real-world standards; increase incentives for people to become teachers; simplify and expand tuition tax credits; grants to keep computer labs open at night so workers can go and increase their skills.

  Edits and addition of Gregg Hitt story on October 29, 2008.