A Kerry presidency bad for trade?

Two for­mer mem­bers of VP Cheney’s staff, writ­ing in the Finan­cial Times look pret­ty hard for evi­dence of his trade pol­i­cy in the Ker­ry cam­paign. They con­clude that there’s rea­son to wor­ry. bq. Mr Ker­ry has said US allies in Europe and else­where will wel­come his elec­tion. It might be a good time forthose allies to tell him that trade pol­i­cy is a vital part of a nation’s for­eign pol­i­cy and that, so far, they do not like what they are hear­ing. (“Finan­cial Times”:http://www.ft.com/cms/s/8e95061c-f6ca-11d8-a879-00000e2511c8.html) But their cat­a­logue of Kerry’s faults doesn’t con­tain any real­ly big stinkers. As they acknowl­edge, Ker­ry has backed right away from his ear­li­er com­par­isons of com­pa­nies that out­source to ‘Bene­dict Arnold’. He now rather weak­ly blames his speech­writ­ers (who pre­sum­ably didn’t actu­al­ly speak the words) for get­ting his views wrong. He “still uses the term”:http://www.johnkerry.com/communities/labor/auto.html but, nowa­days, in ref­er­ence to firms that relo­cate man­u­fac­tur­ing abroad for what he says are ‘tax avoid­ance’ rea­sons. Accord­ing to the authors, Ker­ry has also come up with what looks lik a rather con­fus­ing tax-dis­in­cen­tive for US com­pa­nies that move over­seas to man­u­fac­ture for export. He appar­ent­ly plans to exempt US com­pa­nies from US tax­es on income they earn from man­u­fac­ture abroad where sales are made in the coun­try of man­u­fac­ture. But he plans to tax incomes that are due to for­eign man­u­fac­ture for export to the USA or to third coun­tries. If this report is accu­rate, the idea seems half-baked and unlike­ly to make it into law. It would be a sort of reverse “TRIM”:http://www.wto.org/english/docs_e/legal_e/ursum_e.htm#eAgreement (Trade Relat­ed Invest­ment Mea­sure) that would raise the ire of US multi­na­tion­als—most of whom have more employ­ees and more man­u­fac­tur­ing abroad than they do in the USA—as well as for­eign gov­ern­ments. The authors also fault Ker­ry for pay­ing his dues to the Demo­c­rat obses­sion with enforc­ing envi­ron­men­tal and labor laws in trade agree­ments. But was a stan­dard cam­paign plat­form for Clin­ton, too, and has not so far been trans­lat­ed into any harm­ful action. On the whole, I “remain of the view”:http://www.inquit.com/article/300/is-kerry-a-free-trader-does-it-matter that it’s no longer safe to assume that a Pres­i­dent will be able to shape the trade pol­i­cy of the Unit­ed States accord­ing to his/her philoso­phies.  The role of the Con­gress in trade pol­i­cy has grown steadi­ly in the past three decades. Despite the ‘elbow room’ that Con­gress gives the Pres­i­dent by del­e­gat­ing its trade-nego­ti­at­ing author­i­ty, the PACs still have the pow­er to frag­ment deci­sion-mak­ing about trade issues in a way that defies pre­dic­tions based on the White House’s pref­er­ences.

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