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Obama, McCain Work to Highlight Views on Key Trade Policies

July 3, 2008 at 6:40 PM EDT
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With the economy a top campaign issue, presidential hopefuls Sens. John McCain and Barack Obama are working to shape their stances on international trade and free-trade policies. Analysts discuss the candidates' statements and the impact of trade policy shifts.
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JIM LEHRER: The U.S. presidential candidates on trade. Judy Woodruff has that story.

JUDY WOODRUFF: John McCain strayed far from the domestic campaign trail this week, traveling to Latin America to highlight his stance on international trade.

McCain stopped in Mexico today, where he talked up the North American Free Trade Agreement, or NAFTA. That comes after the presumptive Republican nominee slammed Barack Obama on a variety of trade deals, including NAFTA, on Monday in Pennsylvania.

SEN. JOHN MCCAIN (R), Arizona: Well, let me say that there are significant differences between myself and Senator Obama, and I look forward to discussing those.

One, he doesn’t support the Colombia free trade agreement. I think it would be — have very serious consequences if we rebuked our closest ally.

And by the way, he is opposed to the Central America Free Trade Agreement, the North American Free Trade Agreement. He said in the primaries that he would, quote, “unilaterally renegotiate” the North American Free Trade Agreement.

JUDY WOODRUFF: Labor unions and other critics of NAFTA, which removed trade barriers between the U.S., Canada and Mexico, blame it for the loss of manufacturing jobs. Throughout the campaign, Obama has touted his dissatisfaction with NAFTA, often in Rust Belt states where unions are strong. He campaigned in Ohio on Tuesday.

SEN. BARACK OBAMA (D), Illinois: I have said very clearly, and I will repeat again, that NAFTA lacked the labor and environmental provisions that were enforceable that would ensure not only free, but also fair trade. That’s a principle that I’ve espoused well before I even thought about running for president.

And so I will be sitting down with the president of Mexico and the prime minister of Canada and look to strengthen our trade provisions, so that they are not only good for corporate bottom lines, but they’re also good for workers.

Now, what I’ve also said is that many of the jobs that have been lost in Ohio can’t be traced to trade. It may also have to do with automation.

JUDY WOODRUFF: In fact, Obama talks more now about tweaking NAFTA than about renegotiating the entire agreement.

If there is ambiguity on NAFTA, there is none on a proposal to lift tariffs on most goods traded between the U.S. and Colombia. McCain is for the deal, which is stalled in Congress; Obama is against it.

McCain commented on the plan shortly after arriving in Cartagena Tuesday night.

SEN. JOHN MCCAIN: I note that a free trade agreement has been concluded between Colombia and Canada, and you are negotiating with the European Union, as well. I hope that we could move forward with a free trade agreement between our two countries.

JUDY WOODRUFF: In opposing the agreement, Obama has joined forces with organized labor.

SEN. BARACK OBAMA: I will oppose the Colombia free trade agreement if George Bush is insistent on sending it to Congress, because the violence against unions in Colombia would make a mockery of the very labor protections that we’ve insisted be included in these kinds of agreements.

JUDY WOODRUFF: A new CNN poll shows a slim majority of Americans view free trade as a significant threat to the economy, while 40 percent say it presents opportunities for economic growth.

And to help us understand more about where the candidates stand on these issues, we’ve ask two people who have long debated the impact of trade. Daniel Griswold is with the CATO Institute, a libertarian think-tank that supports free trade. He does not advise the McCain campaign. And Thea Lee is the policy director and chief economist for the AFL-CIO, a federation of major labor unions. The AFL-CIO officially endorsed Obama last week.

Thanks to both of you for being with us. Now, let’s try to dig a little deeper here first on the main differences between McCain and Obama.

And, Daniel Griswold, I want to start with you on John McCain. First of all, how would you explain his overall position on trade?

DANIEL GRISWOLD, CATO Institute: He is strongly and unapologetically in favor of free trade, and his record supports that. He has supported all major trade agreements, from NAFTA to CAFTA, to the recent agreements with Peru and other countries.

And he really believes it. It’s not a political calculation with him. He talks about how free trade has strengthened America’s ties to our allies, starting with the Cold War and after World War II, and also with Mexico and Canada, with NAFTA. So it’s a foreign policy issue with him, as well.

And while he acknowledges that trade has put some Americans out of work, it has given us a stronger economy, created opportunities for millions of Americans. It’s good for America, even though certain special interests oppose free trade.

JUDY WOODRUFF: So you don’t see any wiggle room there on his part?

DANIEL GRISWOLD: No. In fact, he’s been asked about it, and he said it’s a matter of principle and trust.

JUDY WOODRUFF: Thea Lee, what would you add to that about John McCain’s position?

THEA LEE, AFL-CIO: Well, it’s interesting. I don’t disagree with what Dan said, that Senator McCain has never seen a free trade agreement he didn’t like and didn’t vote for, but I also think that his rhetoric is a little bit simplistic and maybe old-fashioned, that he’s still operating in a world where there are only two choices, free trade or protectionism.

And, in fact, the debate about trade is really much more nuanced and complex than that in the year 2008. We’re talking about what belongs in trade agreements. How can we balance the protections we’ve put for corporations with protections for workers and the environment?

And Senator McCain hasn’t really answered that to date, except to say he doesn’t think trade agreements need anything different (OFF-MIKE) that he doesn’t want to change the Bush trade policy at all.

JUDY WOODRUFF: So his views are simplistic, Daniel Griswold?

DANIEL GRISWOLD: No, not at all. Free trade has served this country’s interests over the years. It’s given us a more prosperous economy.

You know, since NAFTA passed in 1993, we’ve added 26 million jobs. The real compensation earned by American workers — that’s wages and benefits — is up 23 percent. Manufacturing output is up 40 percent. This is a very good record.

Now, jobs have gone down because, as Senator Obama said, basically because of automation — the workers, manufacturing workers are still so much more productive.

And another thing trade has done — and Senator McCain is very tuned into this — is it has given us a more peaceful world. It has brought peace to places like East Asia. It certainly has to Western Europe.

And so he sees — and that’s why he traveled abroad, I think, to show that trade isn’t just about jobs at home and incomes at home, which I think it’s delivered on, but it is about building foreign policy ties to our friends abroad.

JUDY WOODRUFF: All right, so let’s focus now on Barack Obama, Thea Lee. How would you broadly characterize his views on trade by comparison?

THEA LEE: You know, I think Senator Obama has been very clear. He wants a different kind of trade policy, one that puts good jobs for American workers and development for our trading partners at the center, and not corporate profits or corporate rights. And I think that’s a big change.

And he also wants to be tougher on our trading partners and enforce our trade agreements and our trade laws that we have in place. We do have a $700 billion trade deficit today, so to say that our trade policy is working and to be blithe about that, I think is wrong.

It’s to say — you know, we’ve lost more than 3 million manufacturing jobs in the United States since George Bush has been in office, not all of them to trade, but a chunk of them to trade. You know, when you import $700 billion more every year worth of goods and services than you export, you’re borrowing from the rest of the world, and Senator Obama wants to crack down on unfair trade practices, currency manipulation by China, for example, illegal subsidies, worker rights abuses.

And I think all those things would help level the playing field, which would help us be more competitive in the global economy than we are.

JUDY WOODRUFF: So, Daniel Griswold, I hear a description where I think Thea Lee is saying he’s more — Senator Obama more sensitive to some of the complexities of trade in 2008 and beyond.

DANIEL GRISWOLD: Unfortunately, I think he’s more sensitive to special interests rather than the nation’s overall benefit.

He’s trying to have it both ways. If you read his book, he says positive things about trade in a general sense. Yet when the crunch comes, and there’s an agreement on the table to expand trade with important allies, like the democracies in Central America, he finds a way to oppose it.

And it’s based, I think, on flimsy reasons. The manufacturing jobs — you know, we added 500,000 manufacturing jobs in the first five years after NAFTA. It’s not trade that those jobs have disappeared; it’s other factors in our economy.

JUDY WOODRUFF: So how do you — what about that point, specifically?

THEA LEE: Well, in the 15 years since NAFTA has been in place, our trade deficit with Mexico and Canada has gone up by $100 billion, so that was opposite from what the predictions were, that we were going to be able to export more goods, consumer goods to Mexico and to Canada after NAFTA.

And the other thing, I think, that’s wrong with what Senator McCain has said about our trade policies is he said that trade will create good jobs in our trading partners so that we’ll have less immigration flows.

After NAFTA, illegal immigration from Mexico has doubled or tripled, because workers in Mexico haven’t been able to find good jobs after NAFTA.

JUDY WOODRUFF: I want to ask you to come back and focus on — because there has been a lot of attention on Senator Obama’s position on NAFTA. He did talk a great deal on the campaign trail last year and into this year about the need to amend or to renegotiate NAFTA.

Now, a number of people are saying he’s backtracked on that. How do you see that?

THEA LEE: I think Senator Obama’s clarified his position, which is that he has said very clearly NAFTA hasn’t been a great boon, either for American workers or for Mexican or Canadian workers, and he wants to open a dialogue with Mexico and Canada about how we can improve the situation.

I think that’s a very useful thing. I think there are a lot of people in Mexico and Canada who don’t think NAFTA has worked out all that well.

So I think that’s an important step: Can we strengthen the worker rights and environmental protections? Can we improve our immigration policies? Can we improve our trading relationships? I think absolutely we can, and that’s what Senator Obama has said he’d like to do.

JUDY WOODRUFF: How clear do you see Senator Obama’s position?

DANIEL GRISWOLD: He has muddied it, and I’m glad he has. He took an irresponsible position during the debate in Ohio in February where he said, quote, “We will use the hammer of an opt-out to get Mexico and Canada to agree to these labor and environmental provisions,” as though the Canadians needed to raise their environmental and labor standards.

So I think that was irresponsible. These are our two closest neighbors, our two closest commercial trading partners. And he’s going to, out of the box, wave a billy-club over their heads and tell them they need to renegotiate this successful 15-year treaty.

It’s worked in Mexico. Mexico has one of the most stable economies in Latin America. They have a thriving pluralistic democracy. And we’re telling them they need to renegotiate this 15-year commitment.

JUDY WOODRUFF: Realistically speaking, in terms of the real political world out there, Thea Lee, what options are there going to be for the next president to make changes when it comes to trade?

THEA LEE: I actually think there are a lot of opportunities to do trade policy very differently. If you take a different lens on the world and think, “What would it take, what set of policies would it take for American companies and workers to compete successfully in the global economy?”

We need to create some tax incentives to keep good jobs at home. We need to invest in our infrastructure and education, which we haven’t done. And we need to enforce our trade laws. None of those things have been done by the Bush administration.

JUDY WOODRUFF: And what would Barack Obama do, given those options?

THEA LEE: Well, if you start with the China trade relationship, half of our non-oil merchandise trade deficit is with one country, China. We have a tremendously imbalanced trade relation of 5-to-1 imbalance between our imports and our exports.

China has manipulated its currency. It has subsidized its exports. It has abused its workers. It has abused the environment.

We need a really pragmatic dialogue with China that the Bush administration hasn’t been willing to engage in and Senator McCain doesn’t seem interested in.

JUDY WOODRUFF: And what would McCain do, from your perspective?

DANIEL GRISWOLD: I think John McCain is well within the tradition of recent U.S. presidents. Barack Obama would be, at least based on his rhetoric and his voting record, the most protectionist president America has had in decades.

You know, it’s funny. The Democrats point back to the 1990s and the economic growth of that time. What they don’t talk about is Bill Clinton’s trade record. Bill Clinton is the president who gave us NAFTA, the Uruguay Round Agreements Act, China permanent trade relations that brought China in.

And that was an important plank in his centrist economic policies. That was one reason why the economy was doing so well in the 1990s. Barack Obama is very much out of that tradition.

Now, I think his rhetoric is more protectionist than what he believes. If you read his book, what he said, some of the advisers around him, I think he has a more favorable view of trade. But I think, unfortunately, he is captive to certain special interests that oppose trade liberalization.

JUDY WOODRUFF: How well do you think these candidates understand trade issues, Thea Lee?

THEA LEE: I think Senator Obama understands the trade issue pretty well, and I think he’s got a pragmatic approach that he wants to look out for American interests and put American jobs first, which is something which is a little bit unusual.

I think that the two labels of “free trade” and “protectionist” don’t capture the reality and don’t capture the kinds of challenges we face.

How do you negotiate a free trade agreement with another country? Which countries do you choose to negotiate with? Is it solely on foreign policy? Do you negotiate agreements with horrible human rights abusers?

Or do you look out for the economic impact on the United States and look for countries that can really live up to the obligations…

JUDY WOODRUFF: And how well would you say they understand these issues?

DANIEL GRISWOLD: I think pretty well, both of them. But I think for political reasons, Barack Obama has taken a more skeptical view. I think John McCain is sailing true to his convictions and his established record.

Look, trade is one of the good things going for the U.S. economy. While housing has tanked, trade is the one cylinder that keeps pumping away. Exports were up 12 percent last year. Earnings on foreign investment up 20 percent. It’s one of the good things going for U.S. companies.

These free trade agreements give us the level playing field that the politicians say they always want. The goods from Colombia, for example, are already coming in duty-free. The agreement would lower those and make it a two-way proposition.

JUDY WOODRUFF: Well, we could go on, but we are going to leave it there, and we thank you both for coming in. Daniel Griswold, Thea Lee, thank you so much.

THEA LEE: Thank you, Judy.

DANIEL GRISWOLD: Thank you.