Fareed Zakaria on Trade
Reader Sammy sends along this article by Fareed Zakaria:
May 21, 2007 issue – Last week house speaker Nancy Pelosi and congress-man Charles Rangel showed genuine leadership by making a deal with the Bush administration to ease the passage of new trade pacts. But they did so from within a party that is going seriously awry on this issue. Too many Democrats, including most of their presidential candidates, simply wish the subject would go away.
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Globalization and technological change produce real anxieties for many people in the developed world. But the basic facts are incontestable: over the past 20 years, as these forces have accelerated, the United States has benefited enormously. Its companies have dominated the new global economic order; its consumers have reaped the lion’s share of the resulting price reductions.
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In this context it is almost bizarre to listen to the fears of so many Democrats (and increasingly some Republicans). The Central American Free Trade Agreement, which has almost no effect on the $13 trillion American economy but is a huge benefit to the countries in the region, passed the Senate with little Democratic support.
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When I was in Asia last month, I was told by several officials that they found themselves in an uncomfortable position. They liked what they heard from Democrats on America’s role in the world, but they were terrified by what they heard about trade. One of them, who declined to give his name for fear of giving offense, said, “Look, it’s an easy call for us. We don’t like the Republicans on foreign policy. We think they’ve been stupid and unilateral. But they are staunchly progressive on free trade and that’s the most important issue for us by far.” Democrats cannot plausibly hope to lead the world by abdicating America’s historic role as the leader of an open global economy.
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What America needs is a new way to tackle trade. It is a C-and-T agenda: cushion and train. The government should help people to weather the shocks of this roller-coaster ride, and it should help train them to be better equipped for the next round of global competition. We do very little of this today. When someone loses his job in America, he loses his health care and pension. Imagine if that didn’t happen—and it doesn’t in other rich countries—would that worker be as terrified of change? And then imagine if he took a series of retraining and education courses to prepare him for a new job or career.
These two shock absorbers would better equip the average American to face a world of global competition. It would ease the genuine anxieties that people have about trade and build durable political support for expanding the world economy rather than walling us in. It’s a more sensible solution than China bashing, bogus labor standards and protectionist subsidies. It’s a New Deal for trade. Now is any Democrat willing to say that?
I have to head out now, so I don’t have time to comment. Have at it.