Will Globalization Move to Center Stage in American Election?

International trade is likely to re-emerge as an election issue as the presidential race between Democratic candidate Barack Obama and Republican candidate John McCain heats up, according to trade specialists.

Trade deserves to be a primary election issue, according to Gary Gereffi, the director of the Center on Globalization, Governance and Competitiveness at Duke University. "We need a robust and honest debate about how to increase competitiveness of the U.S. economy and continue to lead the world on innovation to create high-end manufacturing jobs," he told America.gov.

So far, such a debate has not occurred, he said, as leading Republican candidates have defended the status quo and leading Democrats have vowed to make trade fairer to American workers, who they say have been losing jobs to low-wage countries.

Edward Gresser of the Progressive Policy Institute, which is associated with the Democratic Party, told America.gov that McCain's views on trade are somewhat different from those of President Bush. For example, in contrast to Bush, McCain has been reluctant to support protections for U.S. industries and farmers.

But neither Republican is interested in dealing with economic anxieties of workers and the general public, Gresser said.

More Americans believe that past trade policies have been bad for the U.S. economy than believe those policies have been good, according to numerous polls. In two June polls, a majority of respondents blamed job losses on free-trade agreements.

These sentiments are not supported by evidence. Research suggests that many more U.S. manufacturing jobs have been lost in recent decades due to technological progress, such as plant automation, than due to U.S. companies moving operations to developing countries. Globalization is responsible for low prices and the variety of manufactured goods in American stores.

But Gresser said he believes the general public has an accurate sense that, as the economy changes faster and faster, more workers are left without jobs, health insurance (which in the United States is largely employer-sponsored) and sufficient pensions. Both candidates promise to overhaul unemployment insurance and re-training programs for displaced workers. Obama, however, has broader and more proactive proposals than McCain, Gresser said.

Also, Obama wants to make labor and environmental standards part of any future trade agreements while McCain does not, according to McCain's top economic adviser, Douglas Holtz-Eakin.

Frederic Mayer, a political scientist from Duke University, said political leaders should realize that the virtues of free trade, including distribution of benefits among different countries and social groups, now are being re-examined worldwide. "It seems to me that the old formula for free trade plus side agreements on labor and environment may be quite insufficient," he told America.gov.

During primary elections, Democratic candidates Hillary Clinton and Obama indicated they wanted to go beyond refining new trade deals. They called for renegotiating the North American Free Trade Agreement (NAFTA). This and an overall anti-globalization tone in Democratic speeches have made U.S. trade advocates and policymakers in other countries uneasy.

Michael Barone, a scholar at the American Enterprise Institute, a conservative policy research organization, says Clinton and Obama have been under pressure from labor unions, which are pushing hard for restrictions on trade. Under the same pressure, the Democratic majority in Congress has blocked consideration of free-trade pacts with Colombia and South Korea concluded by the administration.

Barone, also a reporter at U.S. News and World Report magazine, told America.gov that Democratic nominee Obama increasingly will be whipsawed between two major forces in the Democratic Party: labor unions and major financial supporters who hail mostly from Wall Street and consider trade restrictions nonsense.

The Democratic nominee appears to have backtracked from his initial stance on NAFTA: He recently told reporters his comments on that agreement were misunderstood. Gereffi believes Obama might have toned down his rhetoric - Obama's campaign Web site says he will "work with the leaders of Canada and Mexico to fix NAFTA so that it works for American workers" - in response to negative reactions in Ottawa and Mexico City.

In his August 28 speech accepting the Democratic nomination, Obama referred to globalization only once, saying he would propose incentives for U.S. companies to create jobs in the United States rather than overseas.

Most experts expect the debate about trade to be less politicized in the coming months because both campaigns realize they are now more closely watched for indications of future policies than they were during primaries.

Gereffi said blaming globalization or other countries for perceived economic ills in the United States would not serve Obama well. It would miss "a whole boat in regard to what the real competitiveness challenge for the United States is."

He said both Democratic and Republican campaigns have an opportunity to redefine the trade debate and lay out plans to refocus on real issues, such as better education and training and innovation incentives.

The official views of Obama ( http://www.barackobama.com/issues/economy/#trade ) and McCain ( http://www.johnmccain.com/Issues/JobsforAmerica/trade.htm ) on trade issues can be viewed on their respective campaign Web sites.
Source: U.S. Department of State