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.
Peter Gallagher is student of piano and photography. He was formerly a senior trade official of the Australian government. For some years after leaving government, he consulted to international organizations, governments and business groups on trade and public policy.
He teaches graduate classes at the University of Adelaide on trade research methods and the role of firms in trade and growth and tweets trade (and other) stuff from @pwgallagher