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Jewish World Review Dec. 5, 2007 / 25 Kislev 5768 Hillary, Huckabee and Trade; It's Time for a Free-Trade Debate By Tony Blankley http://www.JewishWorldReview.com | Other than the fight against radical Islam, the efficacy of free trade may be the most important issue pending before the American people and our government. Since the end of World War II, the principle of free trade has defined U.S. economic policy — and thus, to a large extent, the world's economy. Globalization is the product of a long half-century of American free-trade policy. Until the 1980s, it was not even a debated point. Both Democrats and Republicans, liberals and conservatives largely supported free trade. During the past 20 years, doubt has emerged on the question of whether Americans gain or lose from free trade. But the Bill Clinton presidency, in full partnership with the Newt Gingrich Republican Congress, fully supported free trade. However, even in the 1990s, the Democratic Congress only begrudgingly voted with half its caucus for Clinton and Gingrich's NAFTA. About two-thirds of the Republican caucus voted yes. Then, by about 40 percent to 30 percent, Republican voters thought free trade was good for America (with the remainder saying it made no difference). Now, according to an October 2007 Wall Street Journal poll, by 59 percent to 32 percent, Republicans think foreign (free) trade has been bad for America. Democrats are more negative. Many other polls confirm this trend over the past two decades. Thus, it was not surprising that this Monday, the Financial Times gave their lead headline (plus a 3-by-6-inch above-the-fold color photo) to Hillary Clinton on her statement that she doubted the benefits of the upcoming world-trade talks in Doha, Qatar. As her campaign is largely premised on the proclaimed wisdom and success of her and her husband's previous presidency, it is noteworthy in the extreme that she is breaking with her co-president (some guy named Bill, I think) on the question of free trade. Whether Hillary Clinton wins the Democratic Party presidential nomination or not, few would doubt that she has shrewdly assessed the most useful position to hold on the issue. The Democratic Party is now, essentially, an anti-free-trade party. The Republican Party remains, at least at the presidential level, a pro-free-trade party, as exemplified by Rudy Giuliani's statement: "Our philosophy has to be not how many protectionist measures can we put in place, but how do we invent new things to sell" abroad. "That's the view of the future. What (protectionists) are trying to do is lock in the inadequacies of the past." Are you certain, Rudy? Republicans venture forth into the 2008 election campaign with such an unquestioning free-trade policy at their peril. Certainly the most politically gifted of the Republican candidates, Mike Huckabee, sees that peril. Huckabee, sounding like a Democrat, has expressed concern that free trade can lead to an unfair loss of American jobs: "If somebody in the presidency doesn't begin to understand that we can't have free trade if it's not fair trade, we're going to continually see people who have worked for 20 and 30 years for companies one day walk in and get the pink slip and told, 'I'm sorry, but everything you spent your life working for is no longer here.'" Classic free-traders may impute such words by both Hillary and Huckabee to cynicism, populism and demagogy, but it is just possible that the American people may sense a real danger that the elites, heavily invested in the globalization project, cannot see yet. It is noteworthy that Hillary cites the newfound free-trade skepticism of Paul Samuelson (arguably the most important free-trade economist of the second half of the 20th century). It was his 2004 article in the Journal of Economic Perspectives that triggered my decision to reassess the value of free trade. I still have not been persuaded to give up free trade, but it has become debatable. (I still believe the statistic that about 10 percent of our economic activity is the result of foreign trade. Thus, in a protectionist environment, we would be, as a nation, 10 percent poorer each year. That is a huge factor for decreased prosperity, when compounded over the decades.) However the Republican Party will be making not only a political mistake, but possibly a policy mistake of the first order if it does not vigorously engage in that emerging debate. Samuelson argues: "Correct Ricardian theory does imply that worldwide real income per capita does gain … so that winners' winnings will suffice worldwide to more than compensate losers' losings." But Samuelson worries that the wealthy countries (the United States, above all) may be the losers, while India, China and other developing countries may be the winners. What the country (and the Republican Party) needs is an intelligent, nonbelligerent debate, not the mere recitation of ancient maxims that may or may not be valid in a world in which potentially 2 billion Chinese and Indian workers suddenly have been thrown into the world labor market. Maybe that won't put severe downward pressure on American wages (and salaries of many white-collar workers), but it ought to be worrying. Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. Tony Blankley is executive vice president of Edelman public relations in Washington. Comment by clicking here. Archives © 2007, Creators Syndicate

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