Obama and McCain diverge on globalized trade

Ohio has taken some of the worst hits from global economic competition. But look here, also, to see the gains that come from international trade.

What’s most obvious is the pain.

Once-mighty industrial cities have lost many jobs to other nations. And here, far from Mexico, the mid-1990s North American Free Trade Agreement remains a burning political issue.
Kevin Reilley, however, is witnessing the positive side of globalization.

As manager of operations at Columbia Chemical Corp., he’s responding to rising demand for zinc-plating materials from China, Vietnam, and Brazil. After growing from 25 employees in 2005 to about 40 today, the company has just moved into a new, larger headquarters – a tribute to growing exports that are also benefiting the whole state.

Ohio’s experience hints at why trade is an important piece of the presidential campaign puzzle – especially in a state the GOP has always needed to win the White House and where Barak Obama is inching ahead in the most recent polls.

It’s not just a matter of jobs gained or lost. Trade policy also affects the price of mangoes, or even mortgages, and the pace at which living standards rise. And with the economy struggling, many voters feel an elevated anxiety about globalization.

“Where you have a lot of uncertainty in the economy ... people tend to be more risk averse and want stability,” says Robert Atkinson, an economist who heads the Information Technology and Innovation Foundation, a research group in Washington. “You can have the illusion that you can get stability by reducing or restricting globalization.”

Such a retreat is an illusion, in his view, for several reasons. First, an outright pullback from globalization isn’t likely to occur, given the way that trade ties have deepened in recent decades. Just as important, much of the economy’s instability is driven by technological change, not competition with low-wage workers in China.

Help wanted for US workers

Neither Republican John McCain nor Democrat Barack Obama is calling for a pullback from trade. In response to public worries, both men support the idea of more federal help for workers who lose jobs due to foreign competition.

But that still leaves big questions – and important differences between them – about what policy tack to take.

Senator McCain hews closely to the traditional “free trade” doctrine that the US wins, despite any upheavals, when it leads the way toward more global commerce. That may sound like four more years of President Bush, but it’s also a view championed at other times by the likes of Bill Clinton and Franklin Roosevelt.

Senator Obama has aligned himself with the goal of “fair trade” espoused by many labor unions and others worried about globalization’s impact.

He urges tougher enforcement of existing trade laws. He’s skeptical of new trade-promotion treaties unless they contain labor and environmental standards on imported goods – provisions intended partly to level the playing field for US workers against rivals in Asia and elsewhere. Obama also voices support for renegotiating NAFTA with those same goals in mind.
To critics, Obama’s trade philosophy would undercut America’s leadership role at a time when global trade talks have already been floundering.

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