The Custom-House

Trade in the New Mexico Senate Race: Udall vs. Pearce

How will this election change the trade stance of the seat currently held by Republican Pete Dominici of New Mexico?

Dominici is leaving the Senate.  Democratic representative Tom Udall is ahead of Republican Representative Steve Pearce to replace him.

Baseline

Dominici has held the seat, so his record is the baseline.  His record is unusually good on both trade barriers and trade subsidies.  Here's the Cato Institute summary of his Senate record (In this figure each axis shows the percent of votes  against either trade barriers or trade subsidies. The higher an "X" is along the vertical axis the greater the opposition to subsidies, the further an "X" is to the right the greater the opposition to trade barriers. Although Dominici has been in the Senate since 1973, the votes only cover the period 1997 to 2008.) 

Trade in the Nebraska Senate Race: Johanns v Kleeb

How will this election change the trade stance of the seat currently held by Republican Chuck Hagel of Nebraska?

Hagel is leaving the Senate.  Former governor and Bush Secretary of Agriculture Republican Mike Johanns  is running ahead of Democrat Scott Kleeb to succeed him.  Hagel had an extraordinary record of opposition to trade barriers and trade subsidies but decided not to run for a third term.  I can't see either of the candidates duplicating the Hagel record - rate this one, loss of support for trade.

Baseline

Hagel has held the seat, so his record is the baseline.  His record is unusually good on both trade barriers and trade subsidies.  Here's the Cato Institute summary of his Senate record (In this figure each axis shows the percent of votes  against either trade barriers or trade subsidies. The higher an "X" is along the vertical axis the greater the opposition to subsidies, the further an "X" is to the right the greater the opposition to trade barriers. The votes are from the period 1997 to 2008.) 

Obama on trade with China, and trade in textiles

Gregg Hitt reports that Obama is talking tough about Chinese competition in the run-up to election day: China-Trade Issue Thrust Into Races as Vote Nears. This story concerns a letter sent by Obama in response to an issues questionnaire sent by a textile interest group.  The group asked six questions:

The NCTO questionnaire asked the candidates viewpoints on six key textile issues: 1) a monitoring program for China following the removal of safeguards on January 1st; 2) support for the yarn forward rule in free trade negotiations; 3) support for the “Buy America” textile provisions in the Berry Amendment; 4) actions against China currency manipulation; 5) stronger trade enforcement efforts, and 6) textile issues in the Doha Round.

Trade in the Texas Senate Race: Cornyn v Noriega

How will this election change the trade stance of the seat currently held by Republican John Cornyn of Texas?

Cornyn is almost 10 points ahead of his Democratic challenger, state legislator Rick Noriega.  Cornyn has a good record on opposition to trade barriers but a relatively poor one on opposition to trade subsidies.  Given his lead at this point, don't expect a change in the trade stance of this seat.

Baseline

Cornyn is the incumbent, so his record is the baseline.  He has a good record on trade barriers, not so much on subsidies.  Here's the Cato Institute summary of his Senate record (In this figure each axis shows the percent of votes  against either trade barriers or trade subsidies. The higher an "X" is along the vertical axis the greater the opposition to subsidies, the further an "X" is to the right the greater the opposition to trade barriers. The votes are from the period 2005 to 2008.)  Cornyn was elected in 2002, but the Cato record only goes back to 2005 for some reason.)

Trade in the Kentucky Senate race: McConnell v Lunsford

How will this election change the trade stance of the seat currently held by Republican Mitch McConnell of Kentucky?

McConnell is in a tight race against Democratic challenger, businessman Bruce Lunsford.  This is a very close race.  McConnell has a good record on opposition to trade barriers and doesn't have the worst record around on opposition to trade subsidies.  Lunsford has been attacking him on trade.  Because the race is so close, it's not possible to say right now how the trade stance of this seat will change.

Baseline

McConnell is the incumbent, so his record is the baseline.  McConnell has a good record on trade barriers, not so much on subsidies.  Here's the Cato Institute summary (In this figure each axis shows the percent of votes  against either trade barriers or trade subsidies. The higher an "X" is along the vertical axis the greater the opposition to subsidies, the further an "X" is to the right the greater the opposition to trade barriers. The votes are from the period 1997 to 2008.):

Obama would submit the Korea-U.S. FTA to Congress next year?

Yonhap News Agency reports that an aide to the Obama campaign said Saturday that a President Obama would submit the trade agreement with South Korea to Congress early next year, assuming certain preconditions are met: Obama to Submit Korean Free Trade Pact for Ratification in 2009.

U.S. Democratic presidential nominee Barack Obama will submit a free trade agreement (FTA) between South Korea and the U.S. for ratification early next year if he is elected on Nov. 4, his foreign policy adviser said Saturday.

The adviser, Frank Jannuzi, set several preconditions, however, including the "strengthening of the access of American automobile exports to Korea, taking steps to make sure workers who might lose their jobs will get job training and unemployment and health insurance, and solving the beef issue"....

"I will tell you honestly that Senator Obama opposes the Korea-U.S. free trade agreement as it is drafted because he felt it failed to address some key things that need to be addressed," Jannuzi said in a speech to a gathering of Korean-Americans in Annandale, Virginia.

The aide, however, said the Illinois senator's opposition is "not forever," adding Obama supports free trade and that "as president, he will do the things necessary to see its ratification is possible."

Jannuzi singled out the beef issue, saying that it "has mostly been solved but we've got still a little bit more to do. But, if these issues are addressed, I am confident Senator Obama will submit the Korea-U.S. agreement successfully to Congress for its approval and I hope it will happen early next year."

This is a big surprise to me if its true.  Jannuzi is described in the Council of Foreign Relations biographical sketch at the link as the chief East Asian advisor to Democrats on the Foreign Relations committee, reporting in that capacity to Sen Biden.

Baltic Dry Index down 90% since May

Baltic Dry Index 2004-23OCT08: Bloomberg

The Baltic Dry Index is a standard measure of the cost of moving dry bulk commodities by sea.  The drop in 2008 (shown in more detail below) reflects a dramatic decline in the demand for international shipping.  This is a 90% decline in this index since May (`Biggest Bubble of Them All' Is Globalization: Chart of the Day )

Gloomy thoughts on the future of trade

In the short run, the financial crisis is increasing the cost of financing trade.  Tim Bennett, an editor with MoneyWeek, reports: Is International Trade Grinding to a Halt?

Steve Rodley, director of London-based shipping hedge-fund Global Maritime Investments, puts it bluntly: "The whole shipping market has crashed." The trouble is that credit is the lifeblood of commerce, but it is built entirely on trust. And that has evaporated. As such, many ship owners can't get banks to issue letters of credit, particularly on cargoes of price-volatile commodities that no longer look like adequate collateral. Even those who can get letters of credit are finding that their counterparties may no longer trust the credit rating of anything other than large, well-established banks, many of which are now charging big premiums. Letters now cost three times the going rate of a year ago, according to Lynn.

At the WTO, Director-General Pascal Lamy has created a task force on trade finance: Lamy creates WTO task force on financial crisis

ht to Tyler Cowen

In the long run, the financial problems should gradually clear themselves up...

Trade in the Virginia Senate Race: Warner v. Gilmore

Bottom line

Two former governors, Republican Mark Warner and Democrat Jim Gilmore are competing to replace retiring Republican Senator John Warner.  Warner is far ahead of Gilmore, and has said nice things about trade in the past.  I haven't found much that he's said about trade from this election.  However, given the "confidence intervals" around my assessments of each candidate, I can't reject the null hypothesis that Mark=John.

Trade in the Georgia Senate Race: Chambliss v Martin

Bottom line:

Republican Saxby Chambliss and challenger Democratic Jim Martin are in a very close race.  I haven't been able to find much by the challenger on trade issues.  Can't say anything about trade implications for next Congress yet.

The baseline:

Republican Senator Saxby Chambliss was elected in 2002.  Here's the Cato Institute summary of his record (In this figure each axis shows the percent of votes  against either trade barriers or trade subsidies. The higher an "X" is along the vertical axis the greater the opposition to subsidies, the further an "X" is to the right the greater the opposition to trade barriers):