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Jewish World Review
April 7, 2008
/ 2 Nissan 5768
Smoot-Chavez: Dems play politics with trade. America may end up paying the price
John H. Fund
Trade legislatiion debates are usually about dry-as-dust topics like reciprocity and dumping. But sometimes they really matter. Take the Colombia Free Trade Agreement, which the Bush administration will send to Congress this week. If Congress rejects it, the loss wouldn't be just measured in dollors or pesos. It could have profound geopolitical effects that would hurt the U.S.
Colombia is a democratic ally of the U.S. in a tough neighborhood. Alvaro Uribe, its president, has been battling a left-wing insurgency that has used kidnapping, murder and drug trafficking in an attempt to overthrow his government. An impressive body of evidence shows the insurgents, known as the FARC, have been encouraged and financed by Venezuela's strongman, Hugo Chavez. Mr. Chavez, who already has allies in charge of Bolivia, Ecuador, and Nicaragua, would love to extend his influence in Latin America.
The trade agreement shouldn't be controversial. Colombia's economy is doing well, with growth rates of some 6% a year, and more than 90% of its exports to the U.S. already are duty-free under previous agreements. The new proposed trade pact would strip dozens of high tariffs Colombia erects to restrict the flow of U.S. goods and services in.
American unions demanded that the agreement incorporate labor and environmental standards. They got their wish, but that wasn't enough for some unions, which leaned on Barack Obama and Hillary Clinton to make opposition to the agreement a theme of their presidential campaigns.
Although Mrs. Clinton has long been a fierce critic of the accord, it was revealed last week that her top strategist Mark Penn was hired by the Colombian government to push the agreement through. Mr. Penn promptly called a recent meeting he had with Colombian officials on the agreement an "error in judgment" and promptly left their employ. Yesterday he quit the campaign too.
The agreement's supporters held out hope for Mr. Obama. But faced with a critical primary in heavily unionized Pennsylvania later this month, Mr. Obama took the occasion of his speech before the AFL-CIO convention in Philadelphia last week to announce that he too would oppose it. "The violence against unions in Colombia would make a mockery of the very labor protections that we have insisted be included in these kinds of agreements," he said.
But in truth, the Uribe government has made great strides in reducing violence in Colombia. Since 2001, the number of kidnappings has dropped by over 80%, acts of terror are down over 75%, and the murder rate associated with trade unionists is down almost 80%.
President Uribe made clear how disappointed he was that the Democratic front-runner had chosen domestic politics over geopolitical stability: "I deplore the fact that Sen. Obama . . . should be unaware of Colombia's efforts," he said in a statement. "I think it is for political calculations that he is making a statement that does not correspond to Colombia's reality."
The simple truth is that the opposition to the trade agreement--from the Democratic presidential contenders to House Speaker Nancy Pelosi--has nothing to do with reality. Rep. Charles Rangel, chairman of the House Ways and Means Committee, admitted as much recently: "It's not the substance on the ground--it's the politics in the air."
There was another period when raw politics was allowed to trump what many in Congress privately admitted was common sense. In the spring of 1930, as the economic downturn set off by the previous year's stock market crash set in, Congress was debating the Smoot-Hawley tariff bill that sought to raise U.S. import barriers to record levels.
Most of the leading economists of the day opposed Smoot-Hawley. A front-page New York Times headline on May 5, 1930, read: "1,028 Economists Ask Hoover to Veto Pending Tariff Bill." But for entirely selfish and shortsighted reasons, both Congress and President Hoover went along with the protectionist hysteria. As a result, the Great Depression was probably deepened and extended for years.
Today, another no-brainer trade vote is before Congress. The foreign-policy benefits of the agreement are immense and the economic costs are minimal. "This is a test of whether the Democratic Congress is ready to accept the responsibilities of the majority," says Norman Ornstein of the American Enterprise Institute.
Everyone plays politics with trade. But there are times when the stakes are too important. The Colombia agreement is another example of when politics must take a back seat for a larger good. We certainly know how Hugo Chavez is rooting for the congressional vote to turn out.
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JWR contributor John H. Fund is author, most recently, of "Stealing Elections: How Voter Fraud Threatens Our Democracy". (Click HERE to purchase. Sales help fund JWR.)
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© 2006, John H. Fund