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The Times of London shows tremendous interest in the American midterm elections in its edition today, with a number of articles analyzing the potential effects of the midterms. One area that Bronwen Maddox expects to feel a big impact is free trade. Maddox writes that a Republican loss of Congress will spell the end to free-trade agreements with Europe and the world:
IF THE Democrats win back the House of Representatives today, that is the end of the enthusiasm in the US for free-trade deals — to its own cost, to that of developing countries and, most certainly, to Europe. ...
The first casualty would be President Bush’s “fast-track” negotiating power, which gives him congressional authorisation to conclude trade deals. It runs out next summer and a Democratic House would almost certainly not renew it.
With that goes any chance of the US helping to revive the Doha round of world trade talks, although they may be dead anyway. Those carried the hope that the US might wean itself off farm subsidies — and force Europe to do the same.
Maddox notes that free-trade policies have lost some of their momentum, but that doesn't take into account the economic expansion and the near-full employment in the US. Protectionist sentiment abounded during the short recession and the slow start to the recovery as demagogues from both sides of the aisle railed about "out-sourcing" as the new evil afflicting Americans. However, the term has dropped out of the political lexicon during these midterms as employment concerns have vanished.
The rest of Maddox's analysis seems just as facile; he talks about the border fence as a protectionist impulse, a rather clueless assertion, but his larger point bears consideration. The Republicans and the Bush administration has pushed for free trade agreements since the beginning of Bush's tenure. In fact, Bill Clinton signed NAFTA into law, but only because the GOP-controlled Congress supported it. Democrats have opposed these agreements, spurred on by unions towards protectionist policies.
The last three years show that America can profit through globalization. We have sustained tremendous growth and cut unemployment to near-historic lows while engaging other nations in free trade, allowing our exports to enter new markets and extending American economics in the global market. We have been able to outperform the EU, hampered by protectionist regulations. A loss by the GOP will almost certainly end that profitable and engaging trade policy in favor of our own protectionism, which will damage our exports and could start a recession abroad as well as in the US.
We have not heard much about free trade in this election, but it has a tremendous impact on the economic health of the nation and the world. Voters need to consider whether we should throw out what works in favor of a return to Smoot-Hawley economics.Sphere It View blog reactions
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Free Trade The First Casualty Of A Democratic WinEd Morrissey The Times of London shows tremendous interest in the American midterm elections in its edition today, with a number of articles analyzing the potential effects of the midterms. One area [Read More]
Tracked on November 7, 2006 10:51 AM
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