The New Protectionist Doctrine

By HAROLD FURCHTGOTT-ROTH
March 5, 2008

Yesterday's primaries in Ohio and elsewhere were the first in which America's weakening economy and what can be done to improve it were the focus. Sadly, both Democratic presidential candidates, senators Clinton of New York and Obama of Illinois, could think of little more than to bash free trade. These neo-protectionists call for "renegotiating" the North American Free Trade Agreement, ignoring the sensibilities of hundreds of millions of Americans whose lives have improved because of free trade.

The pollsters explain the situation as follows: The Democratic candidates seek to appeal to voters particularly in Ohio, many of whom blame NAFTA for their economic woes. Uncertain economic times naturally breed anxiety, even though government officials offer words of compassion and encouragement. Yet rabblerousers seek to ascribe blame to any convenient scapegoat in sight. Today, that scapegoat is free trade and NAFTA. Ohio's economy grew at a healthy rate for many years following NAFTA's 1993 ratification, even though for the past few years it lagged the remainder of the American economy. In presidential elections, Ohio has voted for candidates who favored NAFTA and free trade. Ross Perot, an anti-NAFTA candidate in 1996, received less than 11% of the Ohio vote.

Mrs. Clinton and Mr. Obama acknowledge that excessive environmental and labor regulation has repelled businesses from Ohio. Rather than solve Ohio's problems by removing these regulations, the senators want to export our bad regulations to Canada and Mexico — and the dozens of other countries with which we have free trade agreements. The arrogance of this beggar-thy-neighbor policy is not lost on other countries.

Surely our allies around the world will be persuaded by the diplomats of our next administration who will plead: "We Americans want you to adopt the same regulations that helped destroy Ohio's economy. Otherwise, we will abrogate our free trade agreements." The ugly American never had a more compelling message. Neither Mrs. Clinton nor Mr. Obama plan to roll back excess federal regulation that is harming our economy. To the contrary, each has posted platforms calling for expansion of environmental regulations, labor regulations, and other regulations that would discourage business. Our allies would not adopt the regulations we already have in place, much less the imperial regulatory dreams of a new Democratic administration.

For example, both Mrs. Clinton and Mr. Obama support the Employee Free Choice Act, which would be particularly harmful for Ohio. The bill is an example of false advertising, because it would take away workers' rights to secret ballot elections when unions want to organize their workplaces. Rather, it would allow unions to sign workers up for membership without secret ballots, encouraging union intimidation of those who demur.

An examination of the data shows that the states that give workers the flexibility not to join unions have grown more rapidly than states that compel union membership. But don't expect Mrs. Clinton and Mr. Obama to point this out to voters.

They also won't notify Americans that this year's Democratic nominee will be the first major party candidates for president to openly run against free trade since World War II. Free trade has been an optimistic policy galvanized with expectations of a prosperous America today and an even more prosperous one tomorrow. Free trade has been the triumph of the hope of American competitive advantages overpowering the fear of foreign competition. For more than 60 years, hope has defeated fear.

No more. Many of our political leaders today see America as defeated, unable to compete, in need of the artifice of law to protect it from foreigners. They see American prosperity not as the consequence of ingenuity and hard work but as an entitlement that can be written into law. Rather than enable America to compete better with lower taxes and less regulation, they anesthetize citizens with such slogans as "renegotiation" of treaties. These are the same protectionist policies that stunted American economic progress in the 1930s.

Economic progress depends in large part on an unflinching confidence in markets, reliance on property rights, and faith that human decency will triumph. Those views lead to free trade, not protectionism. America can still compete and triumph, but this fall we may choose a president who thinks otherwise.

A former FCC commissioner, Mr. Furchtgott-Roth is president of Furchtgott-Roth Economic Enterprises. He can be reached at hfr@furchtgott-roth.com.

The New Protectionist Doctrine

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