Obama's protectionism hurts U.S. trade
In retaliation for a ban on Mexican trucks using American highways, Mexico is set to impose tariffs on several U.S. imports. Commentator David Frum says it's the latest sign of the Obama administration's protectionist bias.
David Frum (David Frum)
More on International, Commentaries, Mexico
TEXT OF COMMENTARY
Kai Ryssdal: The Senate confirmed President Obama's nominee for trade representative today: Former Dallas Mayor Ron Kirk was approved 92-5. The president will need all the backing for his trade policies he can get his hands on because commentator David Frum says, so far, they don't get high marks.
DAVID FRUM: President Obama already has wars on his hands in Iraq and Afghanistan. Does he really need to start a trade war with Mexico, too? Monday, Mexico announced its intent to raise tariffs on 90 U.S. products. Mexico is retaliating for a protectionist measure tucked into the omnibus spending bill President Obama signed last week.
The measure shut down a pilot program to open U.S. highways to Mexican trucks. That program honors a commitment to Mexico under the 1994 North American Free Trade Agreement. All Mexican trucks on U.S. highways must meet U.S. regulatory standards, so there are no legitimate safety issues: The truck ban is plain protectionism.
If Mexico litigates under NAFTA, it will surely win. But why litigate? We have immigration problems to solve together and energy resources to develop together. Above all, it is only by working together that we can hope to suppress the violent drug war that has taken 6,300 lives south of the border since last January. This violence increasingly reaches into American cities like Atlanta, Houston, and Phoenix. Phoenix now ranks second among the world's cities for most kidnappings -- behind only first place Mexico City.
The chair of the President's Council of Economic Advisers, Christina Romer, has detailed six lessons from the Great Depression. One of the six: Recovery must be global; protectionism can only prolong misery.
Yet already the Obama administration is showing signs of a dangerous protectionist bias. The president's top trade official, Ron Kirk, says he intends to focus more on enforcement, which many fear is code for protectionist actions.
Democrats compare today's economic crisis to the crash of 1929. President Obama's stimulus and other spending measures are advertised as solutions to avoid the mistakes that transformed the 1929 financial crisis into a global depression. But of course the biggest mistake of all in the 1930s was the raising of barriers to world trade. And that's the mistake the Obama administration is in most danger of repeating.
RYSSDAL: David Frum is a resident fellow at the American Enterprise Institute.
Comments
Comment | Refresh
10/26/2009
I just wanted to respond to the Bryan Ogborn comment on this forum: The first clue was his use of the phrase "security and sovereignty of our nation" He follows up with comments about Hispanic drivers on the docks unable to communicate etc. Well, if there are so many Hispanic drivers around and the safety is still so much better than the trucks that would be allowed to cross the border.... oh, and he is a veteran too, nearly died to protect the rich oops I mean this great nation of ours... do I have to belabor the point. This man is clearly racist and brainwashed. In my book, if you make an agreement then you have to stick with it, not just when it is convenient. Don't talk about the law when all you know about is one side. NAFTA is also law and the agreements made therein require(d) many changes to outmoded and outdated protectionist legislation in all three countries involved. The result has been a significant level of growth attributable to increased North American trade. Tell me, does it make sense to truck goods to the US border and then unload it so you can load it up on the other side of the border with all the handling and paperwork this involves? At the most basic level, this is what this is about.
From Merida, Yucatan, Mexico, 03/26/2009
It's the hypocrisy. While the USA touts its capitalist values and forces them on other nations and cultures, at the first sign of problem what do these 'hands off please' these capitalists who are nothing but socialist wannabes run to the government to bail them out with money, trade barriers and protectionist measures like this one.
It's not about the drivers or the trucks; a lot of these comments smack of racism. The trucks that cross the border are checked to the last detail and are perfectly safe. The DOT says they are safer than American trucks because of all the revisions in place.
I think Americans couldn't handle true capitalism - they'd be on the floor wailing and moaning as soon as inefficient Ford shut down it's factories for good.
From Taylorsville, KY, 03/19/2009
As a professional driver, I take exception to Mr Frum's ill timed and ill informed comments about the illegal pilot program to allow Mexican trucks on U.S. highways. What Mr. Frum fails to talk about is the lack of infrastructure in Mexico to deal with proper identification, truck inspections, required drug testing, compliance with the Federal Motor Carriers Safety Regulations on things such as how long we are allowed to drive and how long a rest break we are required to take. Especially part 395. This is not protectionism. This is the safety, security and sovereignty of our nation at stake here. Did noone pay attention to the story of the drunk Mexican truck driver who hit a tour bus head on near Monterey, mexico this week? Eight of the dead were American citizens. Do you want that type of mayhem on American highways? I am around hispanic drivers on a daily basis. Many of them can barely communicate with the English speakers they have to deal with on the docks. Mr. Frum should educate himself before he decides the elimination of this program is ill timed and protectionist. Personally, I could care less how Mexico's feelings are hurt. I am concerned about how letting them in is going to affect the bottom line of keeping food on the table and a roof over my wife's head. I am a veteran, as well. I didn't swear to protect and defend the Constitution to allow the sovereignty and security of these United States to go down the toilet like this. Just a few thoughts. Thank you.
From Columbia, MD, 03/19/2009
David Frum + Heroes = "Save the world, save ourselves."
From Cambridge, MA, 03/19/2009
I am still not convinced that some level of protectionism would not be beneficial to every country that has natural resources and the ability to manufacture and sell goods in its own market.
As some other reader/listener said, globalization is the best solution for corporations to the extent that labor is exported to countries where it is cheap and unregulated (ie no unions) and we here, in the so called first world are left to buy (on credit) cheap goods and enjoy the results of a "service" economy only. Well, we could see the results every single day now that the credit spigot has dried up.
Globalization has depressed wages everywhere. Look at Europe and the giant scam that the European community is: a way for corporations to set shop wherever they want with very limited tax liability and and effective diminished buying power for pretty much everybody, as wages never increased and are tied to the ratio with which each individual country set its currency to the euro in 2001.
When will we realize that an economy only based on buying stuff produced abroad is not sustainable on the long run? How many people would have a job now, if all the stuff we buy would be produced here at home? Certainly it would cost more, but maybe we would buy what is really necessary and our salaries would be enough. Instead we keep depressing everybody's wages (except bankers) and need credit also to go shopping at Walmart..
From Chicago, IL, 03/19/2009
I think the line, "Phoenix now ranks second among the world's cities for most kidnappings -- behind only first place Mexico City." deserves its own story. Please do a follow up as I found this absolutely shocking.
I travel to Mexico City every 6-8 weeks and hear that much of the violence and kidnapping is done by the Zetas (described to me as a gang of police officers). Who is doing the kidnapping in Phoenix?
03/19/2009
The US should be open to Save Mexican trucks and drivers. World trade is too important for the United States' long term viability. Mexico and Canada are very important friends that have grown with the United States. Anything that the US does to hurt them, hurts us more.
From burnaby B.C., BC, 03/18/2009
It took most of you to get where you
are today.Obama has just started his
first term let him alone to do the
jog that bush couldn't do.I think he'll
do better if he gets the people on his
side and not with their heads in the
sand.
T.S.Sveinson
From Phoenix, AZ, 03/18/2009
What is disturbing is how arguments like this ignore the flagrant protectionism that goes on all the time in the United States. Conservatives, and occasionally liberals, tend to ignore this. For example, remember the huge bailouts of (certain) airlines after 9/11? How about recently of the banks, the "Big 3" auto companies, AIG, etc. What is this if not the most egregious kind of protectionism? Why do we tolerate this?
Conservative like to talk about the free-market and banishing regulation. That is, until they are no longer being profitable. Then they are hat in hand begging for bailouts. Someone once said of this, "privatized profits, socialized losses". Brilliant.
I call it hipocrisy.
From San Diego, CA, 03/18/2009
I think the piece about Mexico and protectionism suffers from over-romanticization. If you truly believe Mexican trucks (and drivers) are safe, come spend a few days navigating rush hour in San Diego. If it's not the truck with the wheel falling off or the underpowered truck driving 32 MPH in the fast lane or the driver that drives like he is still in Mexico, then it's the noxious smoke coming from the tailpipes that gets you. No matter how you slice it, thinking there is no safety issue is simply incorrect. Convenient to pontificate on, but still incorrect.
From Troy, IL, 03/18/2009
David Frum and the relentless offshore and international levelers believe that the only way into the future is to reduce America's standard of living to that of Columbia, Mexico, or Haiti. That's where we are heading with globalization. To the levelers, no American deserves a job. All jobs should be immediately sent to low cost countries.
Actual Americans, of course, like to eat, sometimes more than once a day. We need to keep the incomes and rights of Americans in mind, not just those of the obviously more deserving Mexicans.
From Ann Arbor, MI, 03/18/2009
1) It's not the safety of the trucks I'm concerned about -- it's the abilities of the drivers. I certainly noticed that the discourtesy and lawlessness of truck drivers increased shortly after the "pilot program" went into effect a few years ago. Never mind protecting American truck drivers, worry about protecting the lives of the rest of the motorists on the highways. Remember, these guys have a hard time with simple English -- like Speed Limit 60. 2) I keep hearing that we precipitated The Great Depression by protectionist legislation. I have yet to hear the mmechanism detailed. The real end to the Depression was WWII; there wasn't much international trade during WWII, was there? 3) Yankee traders lose about 15 cents on each dollar of "trade". What's the advantage in that? Certain countries kvetch about the U.S. federal debt. Maybe a 25% import tariff on all imports except raw materials would help fix the deficit. Would the kvetchers like that?
Post a Comment: Please be civil, brief and relevant.
Email addresses are never displayed, but they are required to confirm your comments. All comments are moderated. Marketplace reserves the right to edit any comments on this site and to read them on the air if they are extra-interesting. Please read the Comment Guidelines before posting.
You must be 13 or over to submit information to American Public Media. The information entered into this form will not be used to send unsolicited email and will not be sold to a third party. For more information see Terms and Conditions and Privacy Policy.