EVENTS

Date:	Wednesday, September 22, 2004
Time:	4:00 PM -- 5:30 PM
Location:	Wohlstetter Conference Center, Twelfth Floor, AEI 1150 Seventeenth Street, N.W., Washington, D.C. 20036

September 2004

International Trade Policy and the 2004 Presidential Campaign: What Are the Issues?

On Wednesday, September 22, 2004, AEI continued its Trade Policy Series with a seminar on international trade issues and the 2004 presidential campaign.  While President George W. Bush and his advisers proudly advertise their post-2001 accomplishments, Senator John Kerry has called for a moratorium on trade negotiations and a review of U.S. trade policy during the first 120 days of a Kerry presidency.  Two leading representatives of the Bush and Kerry teams, speaking in a personal capacity, addressed topics ranging from disagreements over outsourcing to calls for mandatory new labor and environmental standards. 

Grant Aldonas

Trade is a central part of any economic policy.  As a consequence, issues of trade policy have an impact on our daily lives.  Restrictions on trade revolve around decisive leadership and the willingness to open markets.  President Bush employs these leadership skills.  He is a consistent advocate of policies that encourage trade.  He believes that increased productivity and innovation will further cement the U.S. role as a leader in the marketplace.
 
Senator Kerry, on the other hand, has in the past voted for a number of trade liberalizing pieces of legislation but now says he regrets them and lately has missed votes on similar trade issues.  His proposed 120-day review, to take effect immediately after he would be sworn in, threatens the U.S. relationship with and involvement in the World Trade Organization.  This could significantly impact the financial conditions of companies who depend on imports.  Similarly, Senator John Edwards is unclear on his position on trade.  He fails to note in his famous "two Americas" speech that the very manufacturing businesses he cites are financially supported by subsidies and other financial benefits made possible through trade.  Trade creates opportunities to succeed, and President Bush provides the necessary leadership to continue these efforts.

Lael Brainard

The stakes in the upcoming election are high.  We have a choice between an incumbent who values signing ceremonies more than action, and a candidate who believes that trade interests should not be motivated by foreign policy decisions.  In the past four years, we have seen a stunning reversal in economic conditions--and not for the better.  Reports by the Organization for Economic Cooperation and Development indicate that the U.S. potential market grew faster than we were able to fulfill.  On a fiscal note, we have begun a practice of borrowing and spending above our capacity--predominately from foreign nations like China and Japan.  How can the United States enforce agreements with our "bankers"?  All the while, borrowed money has gone to pay for tax cuts.  Yes, President Bush has signed twelve bilateral free trade agreements, but they have been motivated by foreign policy in Iraq.  For example, while the United States signed an agreement with Australia, a country that joined us in Iraq, it refused to negotiate with New Zealand--a country with whom Australia trades--simply because it did not support our actions in Iraq.  Furthermore, reports indicate that the economic benefits the United States is likely to see from these bilateral agreements are "negligible."

Alternatively, Senator Kerry wants to restore our ability to compete and win.  He understands that trade liberalization also needs to consider fiscal responsibility.  More specifically, he plans to stop borrowing money at the current pace and to increase the U.S. role in the global market place, offer tax credits for education--especially in the fields of science and technology--eliminate incentives for those companies that outsource in order to receive tax benefits, and create a meaningful trade agenda for all Americans.  Senator Kerry supports displacement aide for those workers who find themselves unemployed: he is an advocate for trade adjustment assistance programs, unlike President Bush who is on record against this program.  Senator Kerry will provide leadership at home and abroad and restore faith in America's brand.

 AEI research assistant Jessica Browning prepared this summary.