President Bush has made several bold second-term appointments, among them naming John Bolton as U.S. ambassador to the United Nations and Paul Wolfowitz to head the World Bank. But the president's choice for the nation's top trade office is predictable and represents the administration's allegiance to failed trade policies that have led to the loss of American jobs, record trade deficits, and mounting, unprecedented trade debt.
Instead of recognizing the need to change direction, the president's appointment of Congressman Rob Portman to be the next U.S. trade representative sends a strong signal that our failed so-called free-trade policies will continue through Bush's second term. Portman hails from the state of Ohio, which has lost more than 200,000 jobs over the past four years. Despite the pain inflicted on his home state, he has voted in favor of every major free-trade agreement negotiated by the past two administrations.
Most of those agreements have resulted in the loss of manufacturing and other jobs to cheap foreign labor markets. Portman's votes for the North American Free Trade Agreement, permanent trade relations with China, and all the recent bilateral trade agreements make clear that he is part of the problem, rather than an independent thinker who bases his policy decisions on the overwhelming evidence of the need for a solution.
Albert Einstein defined insanity as "doing the same thing over and over again and expecting different results." Yet the United States continues to enter into similar free-trade agreements with countries and regions that allow corporate America to outsource plant, production, and jobs to other parts of the world. When those products and services are then exported back into our $ 11 trillion marketplace, we only add to our unsustainable trade deficit.
Red ink. The U.S. trade deficit last year soared to a record $ 617 billion, a nearly 25 percent increase over 2003's record deficit and more than 5 percent of our nation's gross domestic product. Sadly, with each new trade agreement, the administration promises more exports and the trade deficit continues to balloon. A broader measure of trade, the current account deficit, is now $ 666 billion. A change in policy is absolutely essential if we are ever to drastically reduce those deficits. There is nothing in Portman's career of public service to suggest that we are going to break from Einstein's definition of insanity.
The Central America Free Trade Agreement heads the top of Bush's and Portman's trade agendas. CAFTA's supporters say the pact will open up free trade with five Central American countries and the Dominican Republic. This agreement, however, represents the same free-trade mentality that has led to a 70 percent rise in our trade deficit since 2001. We're not opening up new markets that have the purchasing power to be significant importers of our products. In fact, the combined wealth of the six CAFTA countries comes to about $ 84 billion, only slightly larger than the size of the economy of New Haven, Conn.
While we may expect CAFTA to turn out differently than did the North American Free Trade Agreement, these six countries possess an even larger pool of cheap labor than Canada and Mexico. American workers have lost nearly 900,000 jobs as a direct result of NAFTA, most of them in the high-paying manufacturing sector, according to the Economic Policy Institute. And since the implementation of NAFTA, the trade deficit with Canada and Mexico has surged from $ 9.1 billion in 1993 to $ 110.8 billion last year.
Wisconsin's Democratic Sen. Russ Feingold says he knows the effects of bad U.S. trade policy all too well. "I would hope that Representative Portman . . . would recognize what has happened to his state, my state, and so many other states in terms of the loss of jobs, especially manufacturing jobs, because of these bad trade agreements that we've approved over the years," he says. "I would hope that as U.S. trade representative he would begin a new era of questioning trade agreements that are unbalanced, and a good place to start would be the Central America Free Trade Agreement."
I would urge Portman to consider another of Einstein's observations: "The significant problems we face cannot be solved at the same level of thinking we were at when we created them." What is now required is an intelligent policy of fair, balanced, and mutually beneficial trade to overcome our trade deficits. Economic markets, whether domestic or international, reward bold and innovative thinking. We've learned that those same markets only punish those who believe that faith in markets is all that's needed to ensure success.U.S. News & World Report
