The Washington Post / By Sebastian Mallaby
The trade debate on China is about human rights, the rule of law, Taiwan, religious freedom, nuclear proliferation, communism; it is about almost anything, in other words, except trade principles. Even those who champion China's accession to the World Trade Organization would not be caught dead citing the idea of comparative advantage, or reminding Americans that imports from China benefit them.
Charlene Barshefsky, the U.S. trade representative, boasts loudly about the exports that her deal will foster. But imports? She's proud that the agreement creates myriad ways to block them.
There are reasons to oppose China's accession to the WTO, even if you are a committed free trader. You can't exclude the possibility that trade sanctions, which would be problematic under WTO rules, might push the Chinese toward liberal reforms, though on balance it's a long shot. It is possible, what's more, that Chinese entry into the WTO would harm the cause of trade, by allowing an arbitrary dictatorship to undermine a rules-based trading system. Already the WTO has difficulty mediating between America and Europe, and its legitimacy is assailed by assorted protesters. If it has to digest Beijing's government, the WTO may wind up divided and sluggish, much like the United Nations.
So China-WTO is a hard judgment. But there is nothing hard about judging a grand public trade debate that misses the basic economics of the issue. We have descended to the point where even so-called free traders are willing to justify trade only in terms of exports. And, in another context recently, the consequences of this outlook became grimly apparent.
That other context is Congress, which has been putting the final touches on a trade bill for Africa and the Caribbean. The rhetoric around the bill is that America is opening its markets to poor countries, to give them a better shot at implementing the export-led growth strategy that America has urged on them. This ought to be a no-brainer: African and Caribbean countries get jobs; Americans get cheaper shirts and pants and hence a boost to their real incomes and ultimately to their economy. But years of silence on the virtue of imports have made that message a tough sell. As a result, the promise of free trade has been delayed and diluted by protectionist lobbyists.
The way the bill has ended up, Caribbean countries are allowed to export duty-free clothes to the United States, but only if they first import the fabric from America. African countries get a duty-free window too, provided that their shipments of clothing to this country do not expand too quickly. Mercifully, a number of other protectionist restrictions were dropped at the last minute. Even so, nobody thinks to ask what the point of the caps on African exports might be. At present, the continent accounts for a paltry one percent of American apparel imports. What is Congress afraid of?
The only thing worse than watching Congress mock free trade is talking to Sen. Phil Gramm about it. Gramm is as pro-trade as they come; you can imagine him, at the end of long day, blowing holes in cardboard protectionists with the buffalo rifle he keeps in his office. But Gramm seems exhausted by the whole subject. If you ask him what it's like to believe in trade these days, he just says he is "lonely." Aren't there any other senators who back the free-trade line? Gramm pauses, ponders, then mentions Bob Packwood. That would be the Packwood who got kicked out of the Senate five years back for sexual misconduct.
This is an especially dire commentary on free-trade politics, because Gramm is not just anyone. He is smart and tough and chairman of the Banking Committee. In March Gramm was in the news for beating up his colleagues over their budget plans. Too many gimmicks to conceal spending, Gramm complained. And his colleagues duly buckled.
If Gramm saw red at the budget gimmicks, the Africa trade stuff ought to leave him foaming. Two in five Africans live on less than one dollar a day. And yet, in these times of prosperity for America, lawmakers want to keep Africans from getting to $1.50. As Gramm himself testified last year, textile protectionism aimed at the cheaper clothes that poor families buy amounts to a regressive tax. "Why the greatest trading nation in the world would continue textile laws that cost every working American family of four $700 a year is an absolute outrage," he said rightly.
So why can't Chairman Gramm do something to prevent the textile travesty? The textile lobby is powerful, of course, but the real answer is that the case for imports has been neglected for so long that most people have forgotten it. "Trade freedom has never been understood and widely supported," Gramm says. "Comparative advantage is complicated."
Yes, up to a point. But if politicians can sell the idea of paying down the national debt, the principles of free trade need not be beyond them. The idea that you are hurt by foreign imports should be as easily dismissed as the notion that you are hurt by your local food store. Sure, you buy groceries from the store, and the store never reciprocates by buying anything from you. But that doesn't mean you would be helped if the store were hit with a large tax--which is what tariffs amount to.
The writer is a member of the editorial page staff.
c 2000 The Washington Post Company:
