More trade means more jobs

Published 2:20 pm Friday, July 16, 2010

The debate over how to create more jobs has paralyzed the capital. President Obama wants to spend federal dollars to extend unemployment benefits and bolster state budgets. Republicans (and a few conservative Democrats) focus on reducing the deficit and encouraging the private sector. As common ground disappears, the real unemployment rate, including discouraged and underutilized workers, approaches 17 percent.

This is the central issue facing the country. And in the middle of all the partisan posturing, there is actually one job-producing measure advanced by the White House that most Republicans support: a free-trade pact with South Korea that has stalled on Capitol Hill since it was negotiated by the Bush administration in 2007.

Seoul is Washington’s seventh-largest trading partner, and the administration argues that the deal could boost American exports by $10 billion a year — a small but useful step. In a surprise move last month, Obama vowed to work out lingering issues with the Koreans and have the pact ready for congressional consideration early next year.

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Republicans, who usually oppose just about anything the president supports, reacted with enthusiasm. The Korean deal, said Rep. Dave Reichert of Washington state, “has the potential to create thousands of American jobs and continue a partnership with a democratic ally.” A bipartisan group of lawmakers called the pact “the most commercially significant agreement the U.S. has negotiated in 15 years.”

Obama and Republicans like Reichert are right on this one. Freer trade is — and always has been — a critical component of economic growth and job creation. So what’s the catch? A big one. The labor movement and its key allies in Congress remain adamantly opposed. No matter that most economists agree on the enormous benefits of increased trade. Union leaders hold firm to their fantasy that they can preserve manufacturing jobs that no longer exist and will never return. As Richard Trumka, president of the AFL-CIO, insisted, “This flawed agreement is the last thing working people need.”

Well, the last thing Obama — and “working people” — need is to listen to reactionaries like Trumka. Protectionism is always the wrong answer, especially at a time of sputtering job growth. The real question is whether the president will actually follow through on his promise, defy the unions, and push the pact on Capitol Hill.

As a candidate, Obama railed against “special interests” that distort and dominate the debate in Washington, but as president, he has often caved in to forces that contribute heavily to Democrats. During the healthcare debate, he shelved any serious discussion of medical-malpractice reform under pressure from the trial lawyers. And when labor opposed proposals to tax expensive “Cadillac” healthcare plans, he accepted a deal that eviscerated the whole concept.

Now the president has another chance to show that he actually meant what he said about opposing “special interests” that favor a narrow constituency over a broader public benefit.

The trade deal is not perfect. Obama should demand more access to the Korean market for American automobiles and beef. On balance, however, it will create jobs and lower prices for the “working people” Trumka professes to care so much about.

There’s a larger point here as well. Economic stress always creates protectionist pressures. As the Global Trade Alert, an international monitoring service, recently reported, since the economic downturn started in November 2008, “the governments of the world have together implemented 496 beggar-thy-neighbor policy measures; that is, more than one for every working day.” Promoting — and passing — the Korean deal will send a clear signal to other countries that Washington is ready to reject that trend and lead the fight for freer trade.

Korea is only the beginning. Obama should then push for congressional approval of bilateral agreements the Bush administration negotiated with Colombia and Peru. He should also get behind a bill, recently passed by the House Agriculture Committee, that would pry open Cuban markets for American farm products. And he should use his voice and visibility to help restart the Doha round of negotiations on a sweeping overhaul of the world’s trading rules.

Right now, the United States is not leading but falling behind. As the Colombia trade deal languishes, other South American countries are forging their own arrangements with Bogota and slashing America’s share of that import market. Europeans and Canadians are eagerly pursing trade talks with Seoul, and posing yet another threat to American products.

More trade means more jobs. Obama clearly understands that. Now he needs the guts to act on his convictions.

(Steve Roberts’ new book, “From Every End of This Earth” (HarperCollins), was published this fall. Steve and Cokie Roberts can be contacted by e-mail at