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December 22, 2006
Trading places
Although the Iraq war was the main driver behind the Democrats’ victory in the mid-term elections, it was not the only issue that fueled the change of power in Congress. Democrats also relied on the issue of international trade, linking it with the outsourcing of U.S. jobs and the struggles of certain vital industries. In their construction, Democrats stood for “fair” trade while Republicans advocated “free” trade. The success of this message fueled Democratic victories in several key races, which means that the new Democratic majority in Congress is not likely to ignore their campaign promises on the issue. But although changes to U.S. trade policy are likely, translating popular electoral slogans into a coherent policy may prove more difficult.
Democrats’ opposition to “free” trade is by no means a new phenomenon, and it is rooted in the party’s robust history of support for labor. Opponents of “free” trade generally emphasize the destructive aspect of the unrestrained market forces it unleashes. They often argue that such forces enable large, multinational companies to outsource good-paying jobs from the United States to other countries where labor is cheaper, and thus more likely to be mistreated. They also argue that lower tariffs on imported goods threaten the health of vital U.S. industries. Likewise, multinational corporations will tend to relocate dirty production processes to countries that lack rigorous environmental regulations if it results in lower costs and higher profits. Opponents of “free” trade, then, see it as a cynical and rapacious vehicle for maximizing profits at the expense of workers—in the United States and abroad—as well as the environment.
Republicans, by contrast, have traditionally been more supportive of “free” trade, as befits their history as the party of capital. Supporters of “free” trade often rely on traditional liberal economic theory, as exemplified by Adam Smith’s “invisible hand” and David Ricardo’s work on comparative advantage. Fundamentally, “free” trade proponents feel that market forces will naturally benefit most people, if allowed to operate free of government intervention. The market determines where products and services can be produced most efficiently, and the resulting savings will benefit producers and consumers alike, around the world. Excessive taxes, tariffs, trade barriers, and other government involvement in the process only corrupt these natural market forces, hurting efficiency and, ultimately, harming the livelihoods of producers and consumers. For “free” traders, the less government involvement, the better.
For the most part, President Bush has lived up to the “free” trade traditions of the Republican Party. He has been greatly aided in this pursuit by his “fast track” authority to negotiate foreign trade deals, meaning that the agreements negotiated by his administration can only be accepted or rejected by Congress, not amended. This is important for a number of reasons. Bilateral trade agreements can be immensely complicated, with separate provisions, tariffs, and regulations for each area of commerce between the United States and a given country. Such agreements commonly entail years of meticulous negotiation. If other countries know that such agreements can be quickly undone by a single U.S. senator or congressman defending the interests of their own preferred constituency or industry, they will be far less likely to enter into such negotiations in the first place. Multilateral trade negotiations can be even more complicated than bilateral ones. “Fast track” authority thus acts as a source of reassurance for U.S. negotiating partners, and it helps to ensure that any agreement negotiated will get a straight up-or-down vote in the U.S. Congress. Since securing “fast track” authority in 2002, Bush has negotiated—and Congress has approved—trade agreements with Chile, Australia, Oman, the states of Central America, and other countries.
It is in the Congressional voting records for these trade agreements that the simplistic electoral distinction between “free” and “fair” trade breaks down, and where party discipline loses out to constituent services. The 2005 vote to approve the Central American Free Trade Agreement (CAFTA) in the House of Representatives was 217-215, with the majority of Republicans voting in favor of the agreement and the majority of Democrats voting in opposition. But 27 Republicans voted against the agreement, while 15 Democrats voted for it. Although these numbers seem modest, they represent a striking breakdown of party discipline, especially considering that the final roll call was separated by only 2 votes out of 432. As one might expect, many of the Republicans who opposed CAFTA represented districts that stood to lose jobs or business to cheap Central American competitors; this apparently was reason enough to vote against their party line. The 2004 trade agreement with Australia differed slightly in that passed the House with a comfortable 314-109 majority. But even in that clear passage, the final roll call comprised a remarkable blend of party votes—116 Democrats and 198 Republicans voted in favor of the agreement, while 83 Democrats and 25 Republicans opposed it. This tendency to buck the parties’ electoral line extends to the executive branch, as well. In the 1990s, Democrat Bill Clinton famously (and controversially) championed the North American Free Trade Agreement (NAFTA), and in 2002, Republican Bush introduced steep tariffs on imported steel in an effort to protect domestic producers.
The electoral perception that Republicans and Democrats have clear and consistent positions on trade, then, is not entirely true. This perception is encouraged for a number of reasons. For one thing, the immensely complicated nature of trade agreements is not easily portrayed in campaign advertisements or candidate stump speeches. More broadly, however, the major political parties (and many of their members) have had difficulty in defining their fundamental conceptions of the purpose of trade. Is the main goal of trade to promote economic growth? And if so, should such growth be measured on a national scale or a global one? The same question must be asked of job creation, as well. Should the primary objective of trade deals be the protection of existing jobs or the creation of new ones? Should such jobs be in an already-wealthy United States, as most elected politicians would likely agree, or in developing countries wracked with extreme poverty and unemployment? By simplifying trade as a choice between the “free” and the “fair” varieties, many politicians craftily avoid these difficult questions. The incoming Democratic majorities in Congress, flush off its electoral successes and ever mindful of its “fair” trade campaign promises, may not be inclined to give these important questions the consideration they deserve.
President Bush’s “fast track” authority is due to expire in June 2007, and given the current political climate, it is exceedingly unlikely that the Democratic-controlled Congress will renew this authority. This does not bode well for progress on new or ongoing trade negotiations, especially when the executive and the legislature promise to be at odds over many other contentious issues and with a presidential election less than two short years away. In the face of such tough odds, perhaps Democrats and Republicans will finally be forced to reconsider their fundamental conceptions of the purpose of trade.
Foreign Policy Association, 21 December 2006
Posted by Daniel Widome at 12:28 AM to Trans-geographical, U. S. Politics
December 12, 2006
Re-elected Chavez stronger than ever
As expected, Hugo Chavez handily won re-election as Venezuela’s president on Sunday. Beyond demonstrating Chavez’s widespread popularity across certain segments of Venezuelan society—he won about 60 percent of the vote—the election provided a more general reminder of Chavez’s greatest attribute: his finely honed instincts for political survival. Such instincts led him to victory in Sunday’s election, but they also regularly lead him to notoriety in the staid world of international diplomacy.
Foremost among Chavez’s perceived offenses is the fiery rhetoric is often directs toward the Bush administration. Chavez famously referred to President Bush as “the devil” in his address to the UN General Assembly in September, and he reused that moniker in his victory speech on Sunday. In the past, he has described the U.S. Secretary of State—“Condolencia,” to Chavez—as illiterate and referred to Donald Rumsfeld as “Mr. Dog.” Such rhetoric has earned Chavez disdain from the Bush administration, and indeed, he outwardly suspects that the United States seeks to remove him from power. With his blunt and fiery rhetoric, Chavez draws world attention to this perceived threat. In doing so, however, he deftly serves his own instincts for political survival. The brilliance of Chavez’s strategy lies not in its proven success. It lies in the fact that the Bush administration is unwittingly and helplessly complicit in Chavez’s political survival.
Assume for a moment that Chavez is correct and that the Bush administration really does want to remove him from power. Chavez certainly has reason to fear this; in fact, Chavez believes that the Bush administration has already targeted him. In 2002, Chavez was briefly removed from power in an abortive coup attempt. Although he ultimately regained his position after a brief detention, Chavez is convinced that the United States was behind the coup attempt. At the very least, the Bush administration was too quick to recognize Chavez’s usurpers. At most, the United States provided material and moral support for the coup plotters.
This atmosphere of antagonism has led many to agree with Chavez that the Bush administration has him in its crosshairs. But as long as Chavez plays the perennial victim and retains the international spotlight, the United States would find it very difficult to oust him quietly. Even if Chavez faced an internal threat—another coup attempt, for example—suspicion would immediately fall upon the Bush administration. Chavez has essentially created a situation in which he can trace any attempt to oust him back to the United States. In the process, he would demonstrate his own prescience.
Alternatively, assume that Chavez is incorrect and that the Bush administration has neither the plans nor the intention to oust him. The United States buys 60 percent of Venezuela’s oil output, and the country is the fourth largest supplier of petroleum to the United States. Although some analysts claim that Venezuela’s oil industry has been poorly managed under Chavez, the Bush administration would be loath to upset the mutually beneficial arrangement that currently exists. And as much as it may disapprove of Chavez’s friends and fiery rhetoric, the Bush administration must certainly appreciate a stable leadership that keeps the oil flowing. President Bush—or the parodied members of his cabinet—would need to have very thin skin indeed to allow themselves to be goaded into action against Chavez.
Even if the Bush administration is not actually targeting Chavez, he has convinced enough people that it is. And every second that Chavez remains in power—in effect, defying the world’s most powerful country and its very unpopular leader—serves to solidify his political security. In the eyes of the world and his fellow Venezuelans, Chavez is able to beat the United States without even fighting it. All the while, he graciously fuels the U.S. economy with Venezuela’s abundant oil.
Chavez’s fiery rhetoric, then, is part of an astute strategy to ensure his own political survival. It is fair to ask, however, if Chavez’s political survival is good for Venezuela. No one can deny Chavez’s popularity. He is admired tremendously by certain segments of the Venezuelan population, and international observers have certified each of his elections—including Sunday’s—as sufficiently free and fair. His “Bolivarian missions” have directed much of Venezuela’s oil wealth towards its poorer citizens, funding health care, literacy, and housing programs. And Chavez certainly represents a healthy break from a long line of light-skinned Venezuelan leaders. His presidency has empowered wide swathes of Venezuelan society that had previously felt disenfranchised and downtrodden.
The exciting rhetoric that ensures Chavez’s political survival, however, also reflects a worrying trend in his leadership style. Instead of implementing his desired reforms through Venezuela’s pre-existing political structure upon taking office, Chavez immediately wrote (and won approval for) a completely new constitution. This constitution centralizes a great deal of power in the executive branch of the Venezuelan government, at the expense of the legislative and judicial branches. Chavez argues that such institutional changes were necessary to achieve his desired reforms and to purge endemic corruption from Venezuelan politics. Indeed, such changes have proven popular among Chavez’s poorer supporters. But Chavez’s opponents contend that the president is a demagogue, interested only in his own power and in substituting easy, short-term fixes for the difficult, long-term reform most needed to help Venezuela’s poor.
Chavez’s re-election locks him in as Venezuela’s president until 2012, unless he modifies the constitution to extend his term before then. With his domestic mandate renewed, look for Chavez to return to his favored pastime on the world stage, and remember that every time he compares Bush to the devil, he ensures his own political survival that much more.
