- Aug 20, 2000
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There's lot of analysis copy and pasted onto these forums regarding who the best next President of the United States would be for Americans, but how about thoughts on who would align well with the fiscal, social and political interests of the U.S.'s biggest trade partners? Here's one editor's thoughts.
Obama a threat to trade
It's interesting to consider the economic impact that a President Obama would have on the rest of the world. The conservative National Taxpayers Union gave Obama an "F" while big labour unions like the Service Employees International Union (SEIU) gave him a 92% grade - he doesn't seem to be a candidate for smaller government, lesser market interference and the continuance of free trade. McCain, on the other hand, aligns far better with the goals of the NTU. ("To reduce government spending, cut taxes, and protect the rights of taxpayers.")
Obama a threat to trade
With Barack Obama stealing a march over Hillary Clinton in the New Hampshire primary early yesterday, it is worth taking a look at just what an increasingly protectionist United States could mean for Canada and the global economy.
Note to Canadians who, according to a recent poll, would vote four-to-one for the Democrats over the Republicans and are clearly falling under the suave Senator's spell: Barack Obama is no Bill Clinton free-trader.
"There are serious benefits for both the Democrats and the Republicans to play the populist card," said Ian Bremmer, president of Eurasia Group, a political-risk consultancy in New York. "It means looking at NAFTA, pressing the Chinese hard on trade and their reluctance to revalue the renminbi, looking at SWFs (sovereign wealth funds) and throwing up hurdles that facilitate protectionism and being less willing to grease the wheels of the global economy."
For his part, Mr. Obama has said on the campaign trail that he wants to tack labour agreements on NAFTA that "reflect the basic principle that our trade agreements should not just be good for Wall Street but should also be good for main street." He did not elaborate exactly what he would push for but a new deal could perhaps include age requirements, working hour limits and conditions, or maybe even minimum wages. Mexico, more than Canada, would be the prime target.
New free trade deals would have to have similar requirements; Mr. Obama has already rejected CAFTA, the Central America Free Trade Agreement. Hillary Clinton is taking a similar tack and Republican Mike Huckabee is also playing the populist card on an anti-big-business theme.
Free trade has been an undeniable success to Canada, Mexico and the United States, boosting the flow of goods between each country. Many jobs have been lost but many more created. Education and training is the only way out for those who have been displaced.
Since NAFTA went into effect in 1994, trilateral merchandise trade between the three partners doubled from pre-NAFTA levels, reaching $958-billion in 2006. Canadian trade has been U.S. focused but Canada-Mexico trade has also grown dramatically, up 394% to $20.4-billion in 2006, helping both Canadians and Mexicans.
Meanwhile, U.S. consumers have benefitted immensely from the flow of cheap Chinese goods to the United States and now as the greenback has weakened, those in the Rust Belt who have keenly felt the sting of increased global competition, are beginning to ride a wave of exports -- the one bright spot in an economy beset by housing and credit woes.
Although it is early days in the presidential race Republican Senator John Mc-Cain also looked to come up trumps yesterday, pulling ahead of Mitt Romney. He has staunchly resisted the populist tide and has consistently got it right on trade.
Lambasting Ms. Clinton's stance on trade, he has said: "As a student of history I know that every country that has turned to protectionism has ultimately harmeditself. The steady march toward more open global trade has been a critical part of the economic miracle that is the American economy."
Unless Obama sees the light, if he wins, Canada and the global economy face a less open and ultimately less prosperous future.
It's interesting to consider the economic impact that a President Obama would have on the rest of the world. The conservative National Taxpayers Union gave Obama an "F" while big labour unions like the Service Employees International Union (SEIU) gave him a 92% grade - he doesn't seem to be a candidate for smaller government, lesser market interference and the continuance of free trade. McCain, on the other hand, aligns far better with the goals of the NTU. ("To reduce government spending, cut taxes, and protect the rights of taxpayers.")