A bipartisan trade policy
The newest Democratic members of Congress have arrived in Washington with an important message from the voters: American workers are feeling economically insecure, and globalization and trade are heightening their fears. The White House and the new Congress still have a chance to create a bipartisan consensus on trade. They should seize it, for the good of the U.S. economy, and for the good of the world's poorest nations, which need freer trade to pull themselves out of poverty.
There are some quick steps the White House and Congress should be able to agree on. To reassure workers at home, they could expand federal assistance to anyone thrown out of a job because of trade. At the same time, new tariff benefits for the least- developed countries, like Bangladesh and Cambodia, would send a positive signal to the rest of the world.
Over all, trade has been very good to the United States, which is still the world's largest exporter of goods and services. The trade-liberalization measures put in place after World War II produce now, by one estimate, an additional $1 trillion in income for Americans annually, and millions of new jobs. The inexpensive foreign goods that arrive here because of free trade keep prices down. Low prices are good for consumers, and by keeping inflation and interest rates in check, they encourage economic growth and job creation.
Still, there is no question that the hundreds of thousands of workers who lose their jobs to trade-related dislocations each year are paying the price. The government has not done enough to take care of these workers, and much of the blame lies with the economic policies of the White House and the last Congress, which was led by Republicans.
Now that the Democrats control Congress, they can champion both free trade and workers' rights. They should push to improve the social safety net, especially access to health insurance. And they should promote increased retraining and wage assistance for displaced workers.
To win Democrats' support, the White House will have to accept some of their demands for stronger labor provisions in future trade accords. Bans on forced labor and child labor, and similar mandates, are laudable goals. But Democrats who propose minimum-wage rules have to recognize that what is low pay for Americans may pull a family out of poverty in a less-developed country.
The administration's proposed farm legislation looks like a decent first step toward reducing subsidies and bringing U.S. agricultural policy into line with our trade commitments. Now, if the administration can put together a solid plan for proceeding with negotiations for the Doha round of global trade talks, Congress should renew the president's fast-track negotiating authority. But if the global talks cannot be jump-started, the White House and Congress should move ahead with bilateral agreements with Peru, Panama and Korea.
Democrats are right to insist that the trade agenda advance the interests of all Americans, not just large corporations. But they need to acknowledge that putting the brakes on global growth is still the surest path to losing American jobs.
